City briefs: Trakm8; Headlam
Telematics and data insight firm Trakm8 has reported a £2m revenue loss as it continues to battle against a struggling insurance market.
Headquartered in Coleshill near Birmingham, the group supplies the fleet, optimisation, insurance and automotive sectors with many well-known customers in the UK and internationally including the AA, Stark, EON, Iceland Foods, Sainsbury’s, GSF, Direct Line Group, Ticker and Freedom Group.
In a half-year report, Trakm8 said the prospect of new device sales in the insurance and automotive markets not ramping up until Q4 of 2025 means that expectations were lower for the division.
The lack of new device sales has resulted in a £2m loss of revenue compared to its expectations in early 2024.
However it sees a strong pipeline of opportunities in its fleet and optimisation business and remains confident of improving revenues.
Revenues for H1 2024 were modestly lower in comparison to the the same period last year at £8.31m (H1 2023: £8.54m).
Profit after tax for the period was £140k compared to £110k for H1 2023.
Flooring distributor Headlam is expecting its full-year performance to be in line with the first half against a challenging backdrop for the industry.
With weak consumer confidence and ongoing declines in spending, sales were driven in part by larger customers, including the exit of Carpetright from the market.
Headlam has moved forward with an ambitious two-year transformation plan aimed at streamlining its operations and increasing profitability.
It’s consolidated 32 separate businesses into a unified operation under the Mercado brand and simplified in logistics network.
The company’s new distribution centre in Rayleigh, Essex, is almost ready to open in early 2025, making its Ipswich facility surplus to requirements. In Scotland, two sites have been consolidated into a single distribution centre near Glasgow.
The company aims to release at least £70m in cash through the sale of surplus properties and more efficient working capital management.
Resulting profit improvements of at least £20m are expected to start in 2025, with the full benefits realised by 2026.
The UK flooring sector has shown little sign of recovery, with year-on-year declines of 10-15% continuing through the second half of 2024.
While Headlam has slowed its own revenue decline, group revenue for the five months to November 2024 fell by 7.3%, an improvement from the 11.8% drop in the first half.
Chris Payne, chief executive officer, said: “The challenges impacting the UK flooring market have continued to weigh on our trading performance in the short term. However, the Board remains encouraged by the significant progress we are making against our strategy and transformation plan to simplify our operations and improve our customer offering.
“In light of the additional market headwinds, we are extending this programme to target greater benefits over the next two years. This progress remains critical to ensuring the business is positioned for long-term success given the wider current macroeconomic uncertainty and its impact on consumer confidence and our markets in the near-term.”
