REG - Headlam Group PLC - Property Disposals Completion

HeadlamAnnouncement

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RNS Number : 3612F  Headlam Group PLC  22 May 2026

22 May 2026

 

Headlam Group plc

('Headlam' or the 'Company')

Property Disposals Completion
 

Headlam (LSE: HEAD), the UK's leading floor coverings distributor announces
the Company has completed the disposal of two surplus properties¹, which as
announced in the Company's Trading Update on 20 May, results in c.£15.3m net
of proceeds across these two disposals and the disposal announced earlier this
week. The proceeds will strength the balance sheet and be used to invest in
working capital. The Company continues to evaluate the potential sale and
leaseback of our Coleshill property and will update the market in due course.

 

 Enquiries

Headlam Group plc                                        Tel: 01675 433 000
 Rob Barclay, Chief Executive Officer                     Email: headlamgroup@headlam.com (mailto:headlamgroup@headlam.com)
 Richard Jones, Interim Chief Financial Officer

 Alison Hughes, General Counsel & Company Secretary

 Panmure Liberum Limited (Corporate Broker)               Tel: 020 3100 2000
 Tom Scrivens / Atholl Tweedie

 Houston (PR advisers)                                    Tel: +44 (0)20 4529 0549 / +44 (0)7733 032695

 Kate Hoare / Charlie Barker                              Email: Headlam@houston.co.uk

 

 Notes to Editors

 Operating for over 30 years, Headlam is the UK's leading floorcoverings
 distributor. The Group works with suppliers across the globe manufacturing the
 broadest range of products, and gives them a highly effective route to market,
 selling their products into the large and diverse trade customer base. The
 Group has an extensive customer base, providing them with a market leading
 service through the largest product range, in-depth knowledge, ecommerce and
 marketing support, and nationwide delivery service. To maximise customer reach
 and sales opportunity, Headlam operates businesses, trade brands and product
 brands across the UK and in the Netherlands, which are supported by the
 group's network, central resources and processes.

 ¹On 21 May 2026, the Group completed the sale of its Nottingham and Rochester
 properties  to Carter Investment One Limited for £7.55million plus VAT,
 which constitutes a significant transaction under the Listing Rules. This
 footnote, together with the main body of the announcement, sets out the
 further information that is required to be disclosed. (A) Material Contracts -
 The sale agreement between the Group and Carter Investment One Limited is
 subject to standard commercial property terms and there are no conditions
 outstanding.  At the same time, the Group also entered into a short leaseback
 agreement for the Rochester property with the new buyer until 19 June 2027 at
 a market rate rent, (the lease is contracted outside the Landlord and Tenant
 Act 1954 and has customary provisions dealing with removing the Group's
 fixtures and fittings and making good any applicable dilapidations on expiry
 of the lease).  (B) Risks - Headlam shareholders should carefully consider,
 together with all other information contained in this announcement, the
 specific factors and risks described below. The Company considers these to be
 the known material risk factors relating to the significant transaction.
 There may be other risks of which the Board is not aware or which it believes
 to be immaterial which may be connected to the transaction and have a
 material and adverse effect on the business, financial condition, results of
 operations or future prospects of the Group.   The risks disclosed below are
 those which the Company considers: (i) are material risks related to
 the transaction; (ii) will be material new risks to the Group as a result of
 the transaction; or (iii) are existing material risks for the Group which
 will be impacted by the transaction. The risks described below are not set
 out in any order of priority, assumed or otherwise: (i) The Group may incur
 liability under the sale contract and leaseback; (ii) The sale contract is
 based on standard commercial property contract terms and also includes
 customary provisions. Both the Group and Carter Investment One Limited
 carried out a customary due diligence and disclosure process to minimise the
 liability under these provisions. (iii) The short lease agreement is based on
 customary provisions and dealing with removing the Group's fixtures and
 fittings and making good any applicable dilapidations on expiry of the lease;
 (iv) The market price of shares in the Group may fluctuate on the basis of
 market sentiment surrounding the transaction; (v) The shares in the Group are
 quoted and the price which investors may realise their shares are influenced
 by a number of factors, some specific to the Group and its operations and some
 which may affect flooring distributors or publicly traded companies as a
 whole, or other comparable companies; (vi) The sentiments of the stock market
 regarding the transaction will be one such factor and this, together with
 other factors including actual or anticipated fluctuations in the financial
 performance of the Group and its competitors, market fluctuations, and
 legislative or regulatory changes for the flooring sector, could lead to the
 market price of the Group's shares going up or down.  (C) Impact of the
 transaction on the Company's earnings, assets and liabilities - The Group has
 de-recognised the £1.95million book value for the Nottingham property and the
 £1.33million book value for the Rochester property from its balance sheet and
 recognised the receipt of £7.55million (excluding VAT) for both properties
 less costs associated with both transactions, plus a further £1.51million of
 cash collected in respect of VAT to be paid over to HM Revenue & Customs
 in the next quarterly VAT payment. The Group will use the cash proceeds for
 general working capital purposes, and a profit on disposal of the property
 will be recognised. The amount of profit on disposal is subject to the
 accounting requirements of IFRS16 with regard to sale and leaseback
 transaction and will be calculated prior to finalising, and subsequently
 disclosed within, the Group's results for the year ended 31(st) December
 2026.  The profit on the disposals will be classified as a non-underlying
 item in the Group's income statement due to its size and one-off nature.  A
 right-of-use asset and lease liability will be recognised on the Group's
 balance sheet in respect of the Rochester property being leased back. These
 amounts will be calculated prior to finalising, and subsequently disclosed
 within, the Group's results for the year ended 31(st) December 2026.  (D)
 Use of proceeds - The proceeds will be used for general working capital
 purposes.  (E) Additional Disclosures - The Board of the Company unanimously
 voted in favour of the transaction and in its opinion the transaction is in
 the best interests of the Company's shareholders as a whole, as well as its
 colleagues, suppliers and customers. This assessment is on the basis of the
 transaction further strengthening the Group's financial position.  There are
 no related party transactions or material litigation to disclose.  The
 information required by UKLR Annex 2.2(2) and 2.2(3) is not available.  As
 referenced above, the value of the consideration for the Company's last market
 property valuation for the Nottingham property is £1.95million, and for the
 Rochester property is £1.33million. A profit on sale will be generated, which
 will be recognised as non-underlying income.  As such, the Board considers
 the consideration for the properties is fair as far as the shareholders of the
 Group are concerned.

 

Notes to Editors

Operating for over 30 years, Headlam is the UK's leading floorcoverings
distributor. The Group works with suppliers across the globe manufacturing the
broadest range of products, and gives them a highly effective route to market,
selling their products into the large and diverse trade customer base. The
Group has an extensive customer base, providing them with a market leading
service through the largest product range, in-depth knowledge, ecommerce and
marketing support, and nationwide delivery service. To maximise customer reach
and sales opportunity, Headlam operates businesses, trade brands and product
brands across the UK and in the Netherlands, which are supported by the
group's network, central resources and processes.

 

¹On 21 May 2026, the Group completed the sale of its Nottingham and Rochester
properties  to Carter Investment One Limited for £7.55million plus VAT,
which constitutes a significant transaction under the Listing Rules. This
footnote, together with the main body of the announcement, sets out the
further information that is required to be disclosed. (A) Material Contracts -
The sale agreement between the Group and Carter Investment One Limited is
subject to standard commercial property terms and there are no conditions
outstanding.  At the same time, the Group also entered into a short leaseback
agreement for the Rochester property with the new buyer until 19 June 2027 at
a market rate rent, (the lease is contracted outside the Landlord and Tenant
Act 1954 and has customary provisions dealing with removing the Group's
fixtures and fittings and making good any applicable dilapidations on expiry
of the lease).  (B) Risks - Headlam shareholders should carefully consider,
together with all other information contained in this announcement, the
specific factors and risks described below. The Company considers these to be
the known material risk factors relating to the significant transaction.
There may be other risks of which the Board is not aware or which it believes
to be immaterial which may be connected to the transaction and have a
material and adverse effect on the business, financial condition, results of
operations or future prospects of the Group.   The risks disclosed below are
those which the Company considers: (i) are material risks related to
the transaction; (ii) will be material new risks to the Group as a result of
the transaction; or (iii) are existing material risks for the Group which
will be impacted by the transaction. The risks described below are not set
out in any order of priority, assumed or otherwise: (i) The Group may incur
liability under the sale contract and leaseback; (ii) The sale contract is
based on standard commercial property contract terms and also includes
customary provisions. Both the Group and Carter Investment One Limited
carried out a customary due diligence and disclosure process to minimise the
liability under these provisions. (iii) The short lease agreement is based on
customary provisions and dealing with removing the Group's fixtures and
fittings and making good any applicable dilapidations on expiry of the lease;
(iv) The market price of shares in the Group may fluctuate on the basis of
market sentiment surrounding the transaction; (v) The shares in the Group are
quoted and the price which investors may realise their shares are influenced
by a number of factors, some specific to the Group and its operations and some
which may affect flooring distributors or publicly traded companies as a
whole, or other comparable companies; (vi) The sentiments of the stock market
regarding the transaction will be one such factor and this, together with
other factors including actual or anticipated fluctuations in the financial
performance of the Group and its competitors, market fluctuations, and
legislative or regulatory changes for the flooring sector, could lead to the
market price of the Group's shares going up or down.  (C) Impact of the
transaction on the Company's earnings, assets and liabilities - The Group has
de-recognised the £1.95million book value for the Nottingham property and the
£1.33million book value for the Rochester property from its balance sheet and
recognised the receipt of £7.55million (excluding VAT) for both properties
less costs associated with both transactions, plus a further £1.51million of
cash collected in respect of VAT to be paid over to HM Revenue & Customs
in the next quarterly VAT payment. The Group will use the cash proceeds for
general working capital purposes, and a profit on disposal of the property
will be recognised. The amount of profit on disposal is subject to the
accounting requirements of IFRS16 with regard to sale and leaseback
transaction and will be calculated prior to finalising, and subsequently
disclosed within, the Group's results for the year ended 31(st) December
2026.  The profit on the disposals will be classified as a non-underlying
item in the Group's income statement due to its size and one-off nature.  A
right-of-use asset and lease liability will be recognised on the Group's
balance sheet in respect of the Rochester property being leased back. These
amounts will be calculated prior to finalising, and subsequently disclosed
within, the Group's results for the year ended 31(st) December 2026.  (D)
Use of proceeds - The proceeds will be used for general working capital
purposes.  (E) Additional Disclosures - The Board of the Company unanimously
voted in favour of the transaction and in its opinion the transaction is in
the best interests of the Company's shareholders as a whole, as well as its
colleagues, suppliers and customers. This assessment is on the basis of the
transaction further strengthening the Group's financial position.  There are
no related party transactions or material litigation to disclose.  The
information required by UKLR Annex 2.2(2) and 2.2(3) is not available.  As
referenced above, the value of the consideration for the Company's last market
property valuation for the Nottingham property is £1.95million, and for the
Rochester property is £1.33million. A profit on sale will be generated, which
will be recognised as non-underlying income.  As such, the Board considers
the consideration for the properties is fair as far as the shareholders of the
Group are concerned.

 

 

 

 

 

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