REG - Headlam Group PLC - Trading Update

HeadlamAnnouncement

Tue 07:00

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RNS Number : 9415R  Headlam Group PLC  22 July 2025

22 July 2025

Headlam Group plc

('Headlam', the 'Company', the 'Group')

 

Pre-close trading update

 

Improving revenue trend; expectations unchanged

 

Headlam (LSE: HEAD), the UK's leading floor coverings distributor, provides
the following scheduled update in respect of trading in the six months to the
end of June 2025 (the 'Period' or 'H1'), ahead of announcing half year results
on 16(th) September.

 

In the final two months of H1, the Group has seen a continuation of the
positive trends set out in the Group's previous trading update on 22(nd) May.
The sequential improvement in revenue continued through the rest of the
Period, with Group revenue down 0.6% in June compared to a 6.6% decline in
January. In the UK, we achieved revenue and volume growth in the month of June
for the first time since early 2022. For the Period, Group revenue declined
3.8%, with the UK down 3.8% and Continental Europe down 3.9%.

Reflecting the delayed market recovery and resultant revenue decline in the
Period, particularly in Q1, the underlying loss before tax for the Period is
expected to be approximately £20 million.

 

Strong progress continues to be made on the transformation plan. We are well
progressed in the transition of operations from our Nottingham distribution
centre into other sites; this property is on track to be closed by the end of
August. In June, we launched fully centralised procurement for stock
purchases, which is expected to bring cost savings and working capital
improvements. During the Period, we engaged Alvarez & Marsal as
transformation advisers to help us identify significant further opportunities
to enhance profitability and cash generation through gross margin improvements
and cost efficiencies.

 

At the Group's FY24 full year results announcement in March this year, we set
out a target of £25 million profit improvement from the transformation plan
(with benefits starting to be realised during 2025 and fully achieved by the
end of 2027). We have now identified opportunities to increase that and will
provide a detailed update in our half year results announcement in September.

 

Based on an ongoing improving revenue profile, building on the trajectory
achieved in H1, combined with the additional transformation plan benefits
identified, the Board expects results for the full year to be in line with
expectations.

 

At the end of June, net debt was £24 million and, as announced yesterday, the
Group has subsequently completed the sale and leaseback of its Tamworth
distribution centre for a sale price of £22 million (excluding VAT); the
proceeds of which will be used to reduce the Group's drawdown on its revolving
credit facility. The Group's robust balance sheet has continued to be
supported by headroom on its £72 million borrowing facilities and a property
portfolio valued at £80 million(2).

 

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 UK in the Period compared to
2024

2.   Based on the market valuation undertaken in January 2023. Excludes the
Tamworth distribution centre that was sold after the end of the Period

 

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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