Car accessories retailer Halfords said today it was planning a summer flotation valuing the business at £847 million.

The group and its private equity backer CVC said the group would seek a stock market listing with an indicative price range of 250p to 300p per share, valuing the group's equity at £626.8 million. It has debts of £220 million.

Halfords said it would use the expected £282.1 million proceeds of the offer to repay its debts.

Despite current turbulent stock market conditions, the group said it was confident that the listing would help it build on improvements made since CVC funds bought it in August 2002.

Halfords increased turnover by 10% to £578.6 million in the last year and operating profits before goodwill and one-off costs by 56% to £79.2 million.

The group claims to be the UK's leading retailer by turnover in the sale of car maintenance products, car accessories, cycling products and travel goods.

It had 387 stores in the UK at April 2 and employs some 9,000 staff, of which about 6,000 work full-time.

The group said the total estimated size of its market was about £3 billion in 2003, having grown by 3% per year between 2001 and 2003.

It said it plans to target extra sales growth and improved operating margins by converting existing stores and opening new outlets in its new format, building on its new product ranges and increasing efficiency.

The group sold its garage services business, which made operating losses of £1.2 million in the year to March 2002, in August 2001.

Following the flotation, about 45% of Halfords ordinary shares are expected to be held by private investors, with CVC funds and management owning 45.6% and 7.3% respectively.

Chief executive David Hamid said: "The decision to seek a listing for Halfords will enable us to build upon the success we have achieved to date and to secure the future growth of our company."

Wednesday May 19, 2004