coverage of the commercial market in FY22. ? Continued to invest in our technology:

? PACE into McConechy's

? Tyres on The Drive (ToTD) integrated into our Group website

? WeCheck app launched in Retail stores ? Launched our first Group motoring services campaign, contributing to increased awareness and a +28% uplift in

consideration scores for our Services offer. ? Implemented a new labour operating model in our Retail stores, designed to significantly increase our scale and

capability in motoring and cycling services. We completed consultations with over 5,500 colleagues, with 88%

ultimately retained in the business.

Enhancing our Group web platform and digital customer experience, to create an even more differentiated and specialist proposition ? Launched over 160 new customer enhancements to our group website, including 'email me when in stock', guided

selling, local store stock availability, and personalisation. ? Transferred inbound phone and digital customer-contact from all 404 retail stores to a centralised, specialist

team. With the pandemic driving contact volumes to at least four times higher than normal, caused by accelerated

online adoption and a buoyant cycling market, this initiative enabled a significant improvement in call answer

rates, to over 95%, improved service speed and query resolution, and the liberation of store-based colleagues to

focus on those customers in front of them. ? With an ongoing focus on improving the customer experience, Retail NPS improved by +1.8 YoY and Autocentres NPS by

+3.8 YoY, a proud achievement in such a challenging year.

A focus on cost and efficiency, creating a leaner and more profitable business ? Cycling profitability improvements of +680bps, far exceeding the targeted +300bps. ? Sustainable working capital improvement of GBP20m ? In line with our plans announced in November 2019, we closed 80 low-returning stores and garages where we were

confident of trade transfer to neighbouring locations. This includes the exit of 22 Cycle Republic stores,

announced in FY20. ? Negotiated 19 lease renewals in Retail, achieving an average rent reduction of -30%. ? Secured GNFR annualised cost savings of GBP7m.

Invest in our Colleagues' welfare, engagement and development ? Colleague safety and wellbeing was our number one priority throughout FY21:

? We invested GBP11m in PPE and COVID-19 protocols across the Group.

? We invested a further GBP4m in direct financial support, including a Frontline Colleague Support Scheme and the

Halfords Here to Help fund.

? We launched a Wellbeing hub to support colleagues on a range of issues affecting their mental and physical

health. ? We commenced our Services skills intervention, significantly increasing our colleagues' ability to provide a broad

range of motoring and cycling services to customers and providing them with development opportunities to help

further their careers.

FY22 strategy focus

The last 12 months have proven the resilience of our business and the ongoing relevance of our strategy to focus on the growth of motoring services and B2B. Although we expect the volatile and uncertain trading patterns to continue, the period of optimisation we have undertaken has strengthened the core business and it is now well-placed to withstand future challenges. Although we will continue to optimise the business, we will now accelerate the process of transformation that was paused during the pandemic.

By the end of FY22 we expect to see a different business beginning to emerge, with our areas of focus next year as follows:

Inspire ? Project Fusion remains an exciting opportunity and we will trial between two and three towns in FY22. We think of

Fusion as 'a customer experience seamlessly, consistently, & conveniently executed across all of our assets in a

town'. It will encompass a destination retail store, an updated Autocentre garage, and a Halfords Mobile Expert

offer, all operating together in conjunction with centralised customer support channels and an online and home

delivery proposition across a major town or city. Focussed primarily on improving the customer experience and

understanding the potential of combining all Halfords services in the most compelling way, the trial will also test

whether a reinvigorated in-store & garage design, focused more heavily on the delivery of services, can further

stimulate sales across the Group. ? We will continue to invest heavily in our digital proposition, whether online through the Group web platform, or

enabling the wider transformation agenda. ? Through Project 'Peloton 2', we will significantly improve our PACs ("parts, accessories and clothing") offering in

Cycling, through better ranging, improved merchandising, and most importantly enabling our colleagues to provide

customers with complete solutions to their needs.

Support ? We will increase our Halfords Mobile Expert van network to at least 200, bringing this popular service to more

parts of the UK and giving us over 80% national coverage. ? We will increase the number of Autocentres garages, bringing us closer to our medium-term goal of 550 in the UK and

ROI. ? We will continue to expand our B2B channel, in particular building on the commercial business we established

through our acquisitions of McConechy's and Universal Tyres. ? We will lead the transition to an electric future by investing in training, technology and introducing new products

and services, positioning Halfords as the leading voice of E-mobility. This will include a commitment to train over

2,000 Retail and Autocentres colleagues in Electric servicing in FY22.

Lifetime ? We will launch a unique and market-leading motoring services club, rewarding loyal customers with preferential

terms and offers. ? The additional value of customers that shop across our Group remains an exciting and valuable opportunity. Although

the pandemic caused normal shopping behaviours to be interrupted, we will continue to focus on this and our digital

customer experience. ? Our focus on ESG matters will accelerate, centred on four priority areas in which Halfords can make a real

difference: Electrification, our Net Zero commitment, Diversity & Inclusion, and Product, Packaging and Waste

management.

Underpinned by: ? Cost and efficiency will remain a focus and although we do not foresee any further large-scale property closures in

the near-term, we will retain flexibility in our estate and seek to negotiate further rental savings. ? Our frontline colleagues will benefit from the biggest investment in skills to-date, further enhancing our

super-specialist expertise. By the close of H2 we will have completed our skills intervention, resulting in our

skills base increasing from 16,000 to over 40,000, with every colleague trained in all core services. ? We will transition to a new Group operating and reward model, better aligned to our Group strategy and our One

Halfords Family values.

In addition to these strategic priorities, we will continue to optimise the business to further strengthen our foundations. As mentioned in our Outlook statement above, one key initiative in FY22 will be an investment in core pricing in our motoring products business. The dramatic acceleration in online shopping and a more challenging economic picture have brought value into sharp focus and so we believe this is the right time to make this investment, providing customers with greater value and providing a strong foundation for our services business.

Graham Stapleton Chief Executive Officer, June 2021

Halfords Group Plc 1. Group Services includes revenues across both Retail and Autocentres and includes associated products 2. B2B includes revenues from C2W, Commercial, Fleet and product sales to businesses in both Retail and Autocentres

Chief Financial Officer's Report

Halfords Group plc ("the Group" or "Group")

Reportable Segments

Halfords Group operates through two reportable business segments: ? Retail, operating in both the UK and Republic of Ireland; and ? Autocentres, operating solely in the UK.

All references to Retail represent the consolidation of the Halfords ("Halfords Retail") and Cycle Republic businesses, Boardman Bikes Limited and Boardman International Limited (together, "Boardman Bikes"), and Performance Cycling Limited (together, "Tredz and Wheelies") trading entities. All references to Group represent the consolidation of the Retail and Autocentres segments.

The "FY21" accounting period represents trading for the 52 weeks to 2 April 2021 ("the financial year"). The prior period "FY20" represents trading for the 53 weeks to 3 April 2020 ("the prior year"). To ensure a meaningful comparison with the prior year, all commentary, unless otherwise stated, is against the 52-week period ended 27 March 2020 and is before non-underlying items. Most of our commentary on profit and cost measures is before the impact of IFRS 16, which is stated where relevant. The impact of IFRS 16 is shown in the table below and further details of this impact are provided later within this report.

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