REG - Headlam Group PLC - Pre-Close Trading Update

HeadlamAnnouncement

27/01/2022 07:00

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RNS Number : 7843Z  Headlam Group PLC  27 January 2022

27 January 2022

Headlam Group plc

('Headlam' or the 'Company')

 

Pre-Close Trading Update

 

Profit slightly ahead of expectations, with strong cash generation

 

Headlam Group plc (LSE: HEAD), Europe's leading floorcoverings distributor, is
pleased to provide a Pre-Close Trading Update in respect of the year ended 31
December 2021, and ahead of announcing final results on 9 March 2022.

 

In line with the November 2021 Trading Update, the Company anticipates
announcing 2021 revenue¹ of £667.2 million (2020: £578.1 million) with
underlying² profit before tax expected to be slightly ahead of market
expectations³. Both the UK and Continental Europe performed well, up 16.5%
and 15.1% respectively against 2020 on a like-for-like(4) revenue basis.

 

Actions taken under the business change programme helped to improve operating
efficiency and operating margin during the year, with strong cash generation.
Closing net funds was in excess of £53 million, with this being comfortably
above the Company's current capital requirements, which includes increased
investment to drive revenue growth and optimise operating performance. Given
this, the Company's ongoing strong cash generation profile, and having
reference to previously published Capital Allocation Priorities, the Company
is considering a potential surplus return, the mechanism and quantum of which
are expected to be announced within the final results in March 2022 alongside
the proposed 2021 final ordinary dividend.

 

Early trading in 2022 has been encouraging, and the Company has continued to
be able to largely mitigate the persisting industry wide supply issues and
associated inflationary pressures.

 

Outside of trading, the Company has this month completed the refinancing and
extension of its banking facilities to October 2026 at a minimum, providing a
flexible capital structure, and is in the latter stages of the independent
search process for the appointment of the Chief Executive.

 

¹All financials given represent continuing operations only, and exclude the
contribution from the Swiss business Belcolor AG in 2021, and the comparator
years, following its disposal in May 2021.

 

²Underlying is before non-underlying items, which includes amongst other
items i) amortisation of acquired intangible assets, ii) impairment of
goodwill and intangible assets, iii) property disposal profit, and iv)
business restructuring and non-recurring people costs.

 

³Company compiled consensus market expectations for 2021 revenue, underlying
profit before tax, 2021 total ordinary dividend and net funds at year-end
are £680.7 million, £35.0 million, 14.4 pence and £51.3 million
respectively (on a mean and post IFRS 16 adoption basis, where appropriate).

 

(4)Like-for-like revenue is calculated based on constant currency from
activities and businesses that made a full contribution in both the 2021 and
2020 periods and is adjusted for any variances in working days.

 

Company Presentation

 

The Company will be presenting live via the Investor Meet Company platform
on 1 February 2022 at 2:00pm GMT (www.investormeetcompany.com
(http://www.investormeetcompany.com) ). The presentation is open to all
existing and potential shareholders. Questions can be submitted pre-event via
the Investor Meet Company dashboard up until 9.00am the day before the meeting
or at any time during the live presentation. Investors can sign up to Investor
Meet Company for free and add to meet HEADLAM GROUP PLC via:

 

https://www.investormeetcompany.com/headlam-group-plc/register-investor
(https://protect-eu.mimecast.com/s/_BF8CznV0UYK38sKCW1F?domain=investormeetcompany.com)

 

Investors who already follow HEADLAM GROUP PLC on the Investor Meet Company
platform will automatically be invited.

 

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

 Erik Anderson / Edward Walsh / Ailsa MacMaster
 Peel Hunt LLP (Corporate Broker)                 Tel: 020 7418 8900

 George Sellar / John Welch / Andrew Clark
 Alma PR (Financial PR)                           Tel: 020 3405 0205

 Susie Hudson / Lily Soares Smith / Faye Calow    Email: headlam@almapr.co.uk

 

 

Notes for Editors:

 

Operating for 30 years, 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 trade 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 group's distribution network, central teams and resources.

 

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

 

Headlam provides customers with a market leading service through:

 

·    the broadest product offering;

·    unrivalled product knowledge;

·    tailored service propositions and solutions;

·    sales team and marketing support;

·    ecommerce support and digital applications;

·    nationwide delivery; and

·    trade counter and collection service.

 

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

 

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