Headlam acts on margins

Headlam says it is taking action to restore margins after lower residential sales.

The group says it has seen market share gains in the past four months and lifted sales by 3.4%, helped by ‘new and increased revenue contributions from larger customers and trade counters growth strategies’ which have ‘helped offset lower underlying core residential trading volumes. Additionally, the commercial sector has performed well and continues to be buoyant ahead of the traditionally busy summer trading period.’

However, the lower residential volumes coupled with the moderation in price increases has reduced gross margins.

It says it is acting to restore margins by ‘undertaking further cost control; reviewing prices, in particular where prices have previously been held despite the inflationary environment; and launching/relaunching products under the own product brands strategy ahead of the busier second half trading period.’

It says many of these actions have already been successfully implemented and are starting to contribute to overall business performance, but ‘the benefits are mostly second half weighted and overall profit performance remains dependent on consumer sentiment in the residential market.’



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