‘Soft’ UK sales causes floorings giant to forecast weaker results
A poor performance in the UK has led floorings business Headlam Group to predict its 2018 performance will be “towards the lower end” of expectations.
Headlam is Europe’s largest distributor of floorcoverings and it believes the “softness” in the UK market will continue for the rest of the year.
The Coleshill-based group is introducing price increases of up to 10% from September 1 in the UK, to reflect inflation of its raw material costs.
Like-for-like sales in the UK were down 5.2% in the six months to June. However a 1.7% increase in Continental Europe, plus the impact of acquisitions, pushed total revenues up 1.0% to £337.5m while underlying pre-tax profits rose 0.9% to £17.7m.
Headlam’s chief executive Steve Wilson said the business had recorded “further growth and an increase in our market position” during the first half of 2018.
He added: “However, given the current softness in the UK floorcovering market and the associated trading impact on the company’s UK businesses coupled with the current indications that these conditions are likely to continue during the second half of the year, the board now expects that the full year outcome, whilst ahead of the full year 2017, will be towards the lower end of current market expectations.”
Headlam’s share price fell 30% in four weeks earlier this year, reaching a three-year low, and is yet to recover most of that fall.
