Headlam flags "softening" sales as inflation bites

Headlam Group has reported a small drop in residential sales and warned that consumer spending is likely to be impacted further by inflationary pressures as the year goes on.

In a trading update ahead of its AGM, the leading European flooring distributor said its overall performace was still in line with market expectations but that residential sector revenue was down 0.5% for the first four months of this year compared to last year.

"Q1 2022 revenue was broadly in line with plan, followed by a slightly weaker performance in April 2022 due to overall softening in the residential sector and some delayed orders," says Headlam's statement.

"The continuing inflationary environment is likely to impact consumer spending during the year, thereby suppressing underlying volumes and revenues in the industry," it said.

Profits are holding up well though as Headlam builds on its higher margin portfolio and the group said the  commercial sector continued to show recovery from its severely impacted position during the COVID-19  restrictions. In the four months so far this year, commercial sector revenue for the group was up 5.8% against the prior year period on a like-for-like basis.

Chris Payne, Chief Executive, said: "With our comprehensive growth focused strategy which is demonstrating progress, we believe we are well positioned despite the expected weakening in the residential sector of the marketplace. We look forward to the busier trading months ahead."

Headlam reported "encouraging progress" in gaining new customers and in growing sales trough its online channels and its expanding trade counter network.