Headlam says revenue trend improving

Headlam, a leading UK floorcoverings distributor, has provided a scheduled update in respect of trading in the six months to the end of June 2025, ahead of announcing half year results on 16 September.

In the final two months of H1, the group has reportedly seen a continuation of the positive trends set out in its previous trading update on 22 May. The sequential improvement in revenue continued through the rest of the period, with group revenue down 0.6% in June compared to a 6.6% decline in January. In the UK, the company achieved revenue and volume growth in the month of June for the first time since early 2022. For the period, group revenue declined 3.8%, with the UK down 3.8% and Continental Europe down 3.9%.

Reflecting the delayed market recovery and resultant revenue decline in the period, particularly in Q1, the underlying loss before tax is expected to be approximately £20m.

The company says strong progress continues to be made on the transformation plan. It’s reportedly made good progress on the transition of operations from its Nottingham distribution centre into other sites; with this property on track to be closed by the end of August. In June, the company launched fully centralised procurement for stock purchases, which is expected to bring cost savings and working capital improvements. During the period, the company engaged Alvarez & Marsal as transformation advisers to help identify significant further opportunities to enhance profitability and cash generation through gross margin improvements and cost efficiencies.

At the group’s FY24 full year results announcement in March this year, Headlam set out a target of £25m profit improvement from the transformation plan (with benefits starting to be realised during 2025 and fully achieved by the end of 2027). “We have now identified opportunities to increase that and will provide a detailed update in our half year results announcement in September,” the company says.

Based on an ongoing improving revenue profile, building on the trajectory achieved in H1, combined with the additional transformation plan benefits identified, the Board expects results for the full year to be in line with expectations.