REG - Headlam Group PLC - ESG and Trading Update

HeadlamAnnouncement

25/11/2021 07:00

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RNS Number : 5106T  Headlam Group PLC  25 November 2021

25 November 2021

Headlam Group plc

('Headlam' or the 'Company')

 

Trading and ESG Update

 

On track to deliver profit marginally ahead of expectations

 

Headlam Group plc (LSE: HEAD), Europe's leading floorcoverings distributor, is
pleased to provide an update on trading, and Environmental, Social and
Governance ('ESG') actions.

 

Trading Update

 

Revenue for the year to date is tracking broadly in line with current market
expectations* which were significantly upgraded in July 2021. A robust
performance in the residential sector has helped to offset a persisting
subdued commercial sector, with other features of the market being the ongoing
industry wide supply issues, and associated inflationary pressures, all of
which the Company has been largely able to mitigate.

 

Profit performance has been pleasing and reflects the previous and ongoing
actions to improve operating efficiency and margin. As a consequence, the
Company expects to deliver underlying profit before tax for the year ending 31
December 2021 marginally ahead of current market expectations*.

 

The Company will announce its Pre-Close Trading Update on 27 January 2022
ahead of announcing final results for the year ending 31 December 2021 in
early March 2022.

 

ESG Update

 

Introduction

 

Following the publication of the Company's first ESG Strategy Report in May
2021, which set out initial focuses and broader ambitions in sustainability
and ESG, the Company is pleased to provide an update on its recent actions.

 

Through collaborating and working with its employees and external
stakeholders, the Company is focused on:

 

i)     reducing its contribution to Greenhouse Gas ('GHG') emissions and
climate change;

ii)    becoming a more sustainable business, including through cultural
development and increasing oversight of ESG related risks and opportunities;
and

iii)   increasing the sustainability of the overall floorcoverings industry
through engagement and example, and supporting the future transition to a
circular economy.

 

Environmental

 

GHG emissions from its transportation activities (both commercial and
non-commercial fleet) are the Company's most material direct impact on the
environment and therefore an area of immediate focus. The Company's Transport
Integration project centred around more efficient delivery fleet utilisation
has thus far resulted in a 35 reduction in fleet number to 353.

 

In relation to its non-commercial fleet, the Company has this month introduced
a plug-in hybrid vehicle for drivers so that during 2022 over 50% of the
non-commercial fleet will be plug-in hybrids. Currently there are no viable
options to move the commercial fleet to electric powered vehicles, but the
Company will continue to actively monitor the situation.

 

In support of promoting sustainable products into the industry and increasing
awareness by the end consumer, the Company recently launched a sustainable
'Wool Britannia' product range, with other launches planned as part of an
ongoing campaign.

 

Social

 

The Company's current focus in this area is on improving the support to its
workforce, including through cultural development, engagement, and review of
rewards and benefits. During the last few months, 'Values and Behaviours' and
'Leading through Change' workshops have been rolled-out across the group, as
well as conferences and training being held on strategic projects. In
addition, enhancements to rewards and benefits are being implemented from the
beginning of 2022 along with a locally focused community programme, which will
be detailed within the 2021 Annual Report being published in March 2022.

 

Governance

 

One of the material issues identified through consultation with stakeholders
was 'Supply Chain Risk', and it forms an area of key near-term focus. Actions
to mitigate risk in this area include the commencement of an engagement
programme with key suppliers on industry sustainability issues, including on
any changes to regulation and potential sustainability partnerships.
Additionally, the Company has recently signed a contract with an independent
party to conduct a full Supply Chain Risk Assessment.

 

Disclosure, Targets and Measurement of Progress

 

The Board of Headlam is committed to developing the Company's ESG Strategy,
and has oversight and overall responsibility for the ESG Strategy and
performance. To provide a tool to measure progress, KPIs and targets will be
introduced for certain environmental related and other actions within the 2021
Annual Report which will incorporate a full form ESG Report aligned with both
the Task Force on Climate-related Financial Disclosures ('TCFD') and the
Sustainability Accounting Standards Board ('SASB'). The 2021 Annual Report
will also articulate the Company's initial strategy in relation to Diversity
and Inclusion.

 

*Company compiled consensus market expectations for 2021 revenue and
underlying profit before tax are £684.8 million and £35.0
million respectively (on a mean and post IFRS 16 adoption basis).

 

Enquiries:

 

 Headlam Group plc                                Tel: 01675 433 000

 Chris Payne, Interim Chief Executive             Email: headlamgroup@headlam.com (mailto:headlamgroup@headlam.com)

 Catherine Miles, Director of IR and ESG
 Investec Bank plc (Corporate Broker)             Tel: 020 7597 5970

 David Flin / Alex Wright

 Panmure Gordon (UK) Limited (Corporate Broker)   Tel: 020 7886 2500

 Erik Anderson / Edward Walsh / Ailsa MacMaster
 Alma PR (Financial PR)                           Tel: 020 3405 0205

 Susie Hudson / Harriet Jackson / Faye Calow      headlam@almapr.co.uk

 

Notes for Editors:

 

Headlam is Europe's leading floorcoverings distributor, providing the channel
between suppliers and trade customers of floorcoverings.

 

Headlam works with suppliers across the globe manufacturing a diverse range of
floorcovering products, and provides them with a cost efficient and effective
route to market for their products into the highly fragmented customer base.
Alongside long established processing and distribution expertise, suppliers
benefit from Headlam's marketing and customer servicing into the most
extensive customer base.

 

To maximise customer reach, Headlam operates 66 businesses across the UK and
Continental Europe (France and the Netherlands). Each business operates under
its own trade brand and utilises individual sales teams while being supported
by the Company's network and centralised resources.

 

The Company's customer base covers both the residential and commercial
sectors, with the principal customer groups being independent retailers and
smaller flooring contractors alongside other groups such as larger retailers,
housebuilders, specifiers, and local authorities.

 

Headlam is focused on providing customers with a market leading service
through:

 

·    the broadest product offering;

·    unrivalled product knowledge and tailored solutions;

·    sales team and marketing support;

·    ecommerce support; and

·    nationwide delivery and collection service.

 

www.headlam.com (http://www.headlam.com)

 

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