Floorcoverings group Headlam heads out on the acquisition trail
COLESHILL floorcoverings group, Headlam has said it will continue to expand the business through acquisitions as it looks to capitalise on potential growth opportunities.
The group’s UK business did well but overall, it was partially dragged down by a sluggish performance from its Continental European operations.
The growth pledge came as the company announced in its annual results statement that group revenue for the year ended December 31, 2015 increased by £18.9m from £635.2m to £654.1m.
Operating profit during 2015 increased by 16.9% compared with 2014 with the operating margin improving from 5.0% to 5.6%, which it said reflected the increase in gross margin and operational gearing generated on the higher revenue base.
The group’s UK organic growth of 3.9% outperformed the annual market growth, which for 2015 was forecast to be 3.4%. The contribution from the UK acquisitions completed during 2014 in addition to the acquisition of Matty’s Wholesale Carpets, completed during 2015, amounted to £5.4m bringing the total revenue increase in the UK to 4.9%, an improvement of £26.9m on the previous year.
This was significant because the combined revenue performance from the Continental European businesses showed further contraction during the year, declining by 3.8% on a like for like basis which, once translated into sterling, showed a reduction of 9.3% for the year.
Tony Brewer, Group Chief Executive, Headlam said: “We intend to continue to utilise our capital resource to augment the group’s growth with further acquisitions.
“We have a history of quickly and successfully integrating small bolt-on acquisitions into our existing infrastructure, achieving overhead synergies and an earnings enhancing performance.
“During the year, we acquired Matty’s Wholesale Carpets, and integrated its operations into our distribution facility in Coleshill. The acquisition has been immediately earnings enhancing and the group has also benefited in 2015 from acquisitions completed in the prior year.”
The group said trading in the current year had started well, with like for like growth in the UK of 6.3% during the first eight weeks of the year.
“We are confident that the group will continue to perform well during the year ahead,” added Mr Brewer.
