Floor coverings group benefits from improving UK market

COLESHILL-based floorcoverings group Headlam has seen a hike in its UK business in the first four months of the year.

The company, Europe’s leading floorcoverings distributor, said that in the period between January 1 and April 30 revenue had increased by 5% with the UK operation growing its market share.

However, the firm was hit by the increasing economic turmoil in the Eurozone and its Continental European operations took a near 4% hit during the same period.

Businesses in the UK saw absolute revenue increasing by 7.5% and underlying like for like performance improving by 4.9%.

In Continental Europe, revenue measured in constant currency, reduced by 3.9%.  On translation, this reduction increased to 6.4% due to the rising strength of sterling, compared with the euro and Swiss franc, over the four month period.

The firm said the competitive nature of the UK market had continued to intensify during the period while on the Continent, notwithstanding the contraction in revenue, its businesses saw a slight improvement in gross margin performance.

But as a consequence of the increasing competition in the UK, the group’s gross margin has declined during the first four months compared with the equivalent period last year.
 
“We anticipate this softening to continue during May and June resulting in a gross margin for the first six months down on last year by approximately 50 basis points,” it said.

Tony Brewer, Headlam’s Group Chief Executive, added: “The trading trend highlighted in March, in conjunction with the release of the 2011 full year results, has been maintained with the UK continuing to make progress on last year.

“Whilst markets remain challenging and increasingly competitive, at this stage of the year, we remain confident that our businesses will continue to outperform the market.”