REG - Headlam Group PLC - Trading Update

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RNS Number : 6793J  Headlam Group PLC  22 May 2025

22 May 2025

Headlam Group plc

('Headlam' or the 'Group')

 

Trading Update

 

Headlam (LSE: HEAD), the leading floorcoverings distributor, provides a
trading update in respect of the first four months of the year ("Period")
ahead of its Annual General Meeting later today.

 

The Group's year-on-year revenue has sequentially improved through the Period,
from a decline of 6.6% in January to a decline of 1.4% in April. Group revenue
for the four months overall declined by 4.7%. Revenue from the strategic
growth initiatives of Larger Customers and Trade Counters continued to grow,
with the latter benefitting from maturity of existing sites as well as the
addition of new locations in the Period. Revenue in Regional Distribution
declined, albeit also sequentially improving through the Period.

 

Good progress continues to be made on the transformation plan. Following the
successful network optimisation initiatives in the South East of England and
in Scotland, we have commenced optimisation in the Midlands, with the closure
of our Nottingham distribution centre expected to be completed in Q3, with
operations being consolidated into our nearby Coleshill and Tamworth
distribution centres.

 

There are some encouraging signs of the market conditions improving and we are
also seeing early signs of the benefits of the changes we have been making to
our sales organisation. In the residential side of the business we have
relaunched our Lifestyle brand, including a major rollout of display stands
alongside incentives, to support our independent retailer customers. In the
commercial market, we have won a number of contracts and projects, which will
add to revenue over the coming months. However, as the market is taking longer
than expected to improve, we are accelerating and increasing the scale of the
transformation plan to grow revenue and reduce costs. We will provide more
detail on this in our pre-close trading update in July.

 

Notwithstanding the cautiously improving market outlook, due to the weaker
than expected market performance year-to-date, we expect the underlying loss
before tax for 2025 to be significantly weighted towards H1, with H2 supported
by an improving market backdrop and the impact of the transformation plan.
Looking beyond 2025, we have confidence these tailwinds, in conjunction with
the strength of Headlam's market position and proposition, will underpin a
substantial recovery in Headlam's profitability.

 

The Group's robust balance sheet has continued to be supported by significant
headroom on its borrowing facilities, unencumbered stock and receivables, and
a property portfolio valued at £94 million.

 

 

Footnotes

 

1.   All year-on-year revenue figures are presented on a same working day
basis. There has been one less working day in the first four months of 2025
compared to 2024

2.   The property valuation of £94 million is at the market valuation
undertaken in January 2023

 

Enquiries

 

 Headlam Group plc                            Tel: 01675 433 000
 Chris Payne, Chief Executive                 Email: headlamgroup@headlam.com (mailto:headlamgroup@headlam.com)
 Adam Phillips, Chief Financial Officer

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

 Peel Hunt LLP (Corporate Broker)             Tel: 020 7418 8900
 George Sellar / Finn Nugent

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 spanning independent and multiple
retailers, small and large contractors, and housebuilders. It provides its
customers with a market leading service through the largest product range,
in-depth knowledge, ecommerce and marketing support, and nationwide next day
delivery service. To maximise customer reach and sales opportunity, Headlam
operates businesses, trade brands and product brands across the UK and
Continental Europe (France and the Netherlands), which are supported by the
group's network, central resources and processes.

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