Profits on a roll for floorcoverings group

Midlands floorcovering group Headlam has seen a major improvement in first half revenue and profits.

The Coleshill group, Europe’s largest distributor of floorcoverings, said that in six months to June 30, total increased 4% to £341.9m (H1 2016: £328.7m), with pre-tax profit rising 11% to £16.8m (H1 2016: £15.1m).

Steve Wilson, chief executive, said: “The first half of 2017 represented another period of both financial and operational growth, and it is particularly pleasing that that our concerted efforts on more effective organisation and efficiency initiatives have resulted in enhanced profitability for the period.”

He said the commercial sector summer refurbishment revenue was currently above the level of the comparable period in 2016 and trading in the first few weeks of the second half had been to expectations, with continued growth in the UK and Continental Europe.

Based on this, the board has forecast that it will meet expectations for the full year.

The UK accounted for 85.9% of the group’s total revenue (87% in constant currency) with like-for-like revenue growth of 2.1% (H1 2016: 3.4%), which it said reflected a positive performance from both the residential and commercial sectors – up 2.8% and 0.5% respectively, with the residential sector accounting for 70.5% of UK revenue (H1 2016: 70.1%).

Continental Europe, which accounted for 14.1% of total revenue (13% in constant currency), showed like-for-like revenue growth of 3% (H1 2016: 2.8%).  The residential sector delivered strong growth of 6.7% to account for 50.7% of revenue (H1 2016: 49%) whilst the commercial sector declined by 0.5% as the positive performance from both the Dutch and French businesses was offset by the Swiss business.

In the UK, it implemented further price increases in January 2017 averaging approximately 3% across the majority of its residential sector products purchased from Continental Europe. These mirrored the cost increases levied by suppliers as a consequence of the continuing low sterling exchange rate and the upward movement in raw material prices.

It said a further price increase would be implemented in September to reflect continued supplier price inflation.