Better than expected final quarter boosts floorcovering group Headlam

FLOORCOVERINGS group Headlam has said it expects preliminary results to be ahead of revised market expectations following a strong final quarter.

The Coleshill-based group had said last month that it was on course to beat expectations and in a pre-close update said business for the remainder of the month had been better than expected.

“As such, the company now expects to report preliminary results before non-recurring items ahead of the revised consensus market expectations,” it said.

The company-compiled consensus was predicting normalised pre-tax profit for 2016 to be about £37.6m.

Headlam, which last month agreed new banking facilities with Barclays and HSBC, said total revenue for the year was up 6.0% against 2015 – approximately 4.5% in constant currency, with a strong performance from both the UK and Continental Europe.

“The UK continued to account for approximately 88% of total revenue and UK like-for-like growth was 4.7%, a significant outperformance of the 3.8% growth in the market,” it said.

“Continental Europe, which accounted for approximately 12% of total revenue, grew by 3.6% in constant currency strongly reversing the decline of 3.8% in 2015.”   
 
The company said it had benefited from price increases implemented from August 2016 to mitigate cost inflation due to the weakening of sterling, and the increased revenue led to an improved operating performance as a result of operational gearing.
 
Headlam is Europe’s largest distributor of floorcoverings having grown significantly via acquisition and organic growth since 1992.
 
The company currently comprises more than 60 wholly-owned floorcoverings distribution businesses in the UK and Continental Europe each operating under their own trade brand.

The group is set to announce its full year results for 2016 on March 7.