Floorcoverings group Headlam recovers after difficult start to year

WARWICKSHIRE floorcoverings group Headlam has said a strong March and April helped the business recover from a poor start to the year as bad weather forced customers to stay at home.

The momentum from March and April has been carried forward into the current month giving the Coleshill group optimism it can maintain performance for the remainder of the year.

In a trading update covering the period to the end of April, Headlam said group revenue increased by 0.1% during the first four months compared with the corresponding period last year. By the end of the period, on a like-for-like basis, trading was down 1.1% on 2012.

Revenues from the group’s Continental European businesses, measured on a constant currency basis, reduced by 2.3% during the first four months.

In the UK, it said the home market could best be described as lacking sustained growth and remained highly competitive.

It said its European operations were also experiencing testing markets, none more so than the Netherlands where the market is said to have contracted sharply.

However, it said notwithstanding these difficult trading environments, group businesses had managed to improve or sustain their gross margins.  In the UK, this has resulted in a reversal of the 50 basis points decline that was evident during the first four months of 2012 and on the Continent, overall gross margin has improved by 30 basis points.

Tony Brewer, Headlam’s Group Chief Executive, said: “The improvement in UK trading, evident during March and April, has continued into May with revenue up on last year whilst on the Continent, the performance in May is broadly consistent with the previous four months.

“The revenue deficit at the start of the year has increased the challenges associated with delivering the group’s 2013 financial objectives but our businesses remain focused on improving the group’s trading position across its various markets.”