Delayed market recovery, says Headlam

The residential flooring market is facing a prolonged period of tough trading as the market weakness of last year continues into 2024 says Headlam, the UK's top flooring distributor.

But a strong recovery is forecast for the years ahead.

Announcing its full year results to investors, Headlam saw overall revenue decline 1% but with UK sales volume down 5%, "reflecting reduction in residential property transactions (which declined 20% in 2023) and cost of living crisis reducing consumer spending on home improvements."

The Group's statement added: "The market weakness observed at the end of 2023 has continued into the first few weeks of 2024. We have seen negative volumes across our UK and Continental European businesses."

Overall sales for February this year were 5% below the 2023 performance, said the statement.

"External data on housing transactions and consumer spending on home improvements, and latest projections for RMI (repair, maintenance, improvements) and flooring spend in 2024, indicate a delayed market recovery," it concluded.

However, on a more positive note, Headlam forecast: "The medium-term market outlook remains strong; flooring market volumes in 2023 were around 20% lower than in 2019 and we expect volumes to improve significantly over the coming years as the market recovers."

While underlying profit before tax was £11.0 million compared to £37.1 million in 2022 and debt has increased to £30m after a period of sustained investment, Headlam remains bullish.

A major success is the group's 26% growth in its business with "large customers" – including retailer groups, homeware retailers, builders' merchants, house-builders and online retailers. It also saw sales through its enlarged trade counter network increase by 8.5%.