Profits dip 10% for floorcoverings group Headlam
WARWICKSHIRE floorcoverings group Headlam has seen interim profits dip more than 10% due to continued fragility in its main markets.
The company, based in Coleshill, said pre-tax profits for the first six months of the year were £9.076m (2012: £10.092m), a fall of 10.1%. This was despite a small increase in revenue to £280.4m (2012: £279.4m); although UK like-for-like revenues were down 0.8%.
The bigger problem was in Continental Europe, where the slump in demand across the region saw revenues fall 5.2% compared with H1 last year.
Basic earnings per share reduced by 7.7% from 9.1p to 8.4p compared with the first six months of 2012.
Since the beginning of July, it said UK like-for-like revenue had been broadly flat compared with the same month last year, while the combined monthly performance from its businesses on the continent were down by 4.8% on the previous year.
While trading patterns in August have shown a degree of improvement, the group said the situation was “a further illustration the variable trading pattern experienced during the eight months of the year so far”.
“Furthermore, the underlying fragility in the group’s markets combined with the lack of visibility on forward revenue streams is undermining the board’s ability to provide guidance on second half trading,” it added.
However, the board has said it remains confident that subject to the group achieving a reasonable performance during the second six months of the year, the 2013 dividend will not be less than last year.
The group’s UK activities are comprised of 53 businesses, operating from 18 distribution centres and 24 service centres, with each business focused upon one of five market sectors; regional multi-product, national multi-product, regional commercial, residential specialist and commercial specialist.
It said it continued to review this structure in order to ensure sales and marketing initiatives of the autonomous businesses were optimised and its logistics and distribution was being conducted in the most cost effective manner.
The commercial flooring sector remained subdued over the period; while the residential market was subject to sever fluctuations, especially during the cold winter months.
