Headlam Group PLC AGM Trading Update (5720A)

TIDMHEAD

RNS Number : 5720A

Headlam Group PLC

25 May 2023

Headlam Group plc

('Headlam' or the 'Company')

AGM Trading Update

Revenue growth despite suppressed residential volumes

Headlam (LSE: HEAD), the UK's leading floorcoverings distributor, is releasing the following trading update for the first four months of the year ahead of its Annual General Meeting being held later today.

Effective delivery of the strategy has led to a robust revenue performance and continued market share gains* so far this year. Revenue for the first four months was 3.4% above the same period in 2022 despite volumes in the residential sector market being down due to the current economic environment and in particular weak consumer confidence. There was also limited contribution from manufacturer-led price increases which were prevalent in 2022.

New and increased revenue contributions from the larger customers and trade counters growth strategies have helped offset lower underlying core residential trading volumes. Additionally, the commercial sector has performed well and continues to be buoyant ahead of the traditionally busy summer trading period.

Notwithstanding the overall positive year on year revenue performance, the lower residential volumes coupled with the moderation in price increases has reduced gross margin in the first four months of the year. However, the Company is deploying several mitigating actions. These include undertaking further cost control, reviewing prices, in particular where prices have previously been held despite the inflationary environment, and launching/relaunching products under the own product brands strategy ahead of the busier second half trading period. Many of these actions have already been successfully implemented and are starting to contribute to overall business performance, albeit the benefits are mostly second half weighted and overall profit performance remains dependent on consumer sentiment in the residential market.

*Source: commissioned specialist research from MTW Research

Enquiries:

 
 Headlam Group plc                        Tel: 01675 433 000 
 Chris Payne, Chief Executive             Email: headlamgroup@headlam.com 
 Adam Phillips, Chief Financial 
  Officer 
 Catherine Miles, Director of IR 
  and ESG 
 Panmure Gordon (UK) Limited (Corporate   Tel: 020 7886 2500 
  Broker) 
 Tom Scrivens / Atholl Tweedie 
 Peel Hunt LLP (Corporate Broker)         Tel: 020 7418 8900 
 George Sellar / John Welch

Notes to Editors:

Operating for over 30 years, Headlam is the UK's leading floorcoverings distributor. The Company 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 Company 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 and trade counter collection sites.

To maximise customer reach and sales opportunity, Headlam operates 67 businesses and trade 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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May 25, 2023 02:00 ET (06:00 GMT)

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