Headlam is racing to secure funding which it admits is hitting its ‘ability to trade effectively’, just months after securing revise banking arrangements. It has ruled out putting itself up for sale, but is considering all other options.
The group is suffering from lack of stock on key products and has added the UK’s hot weather to reasons why business continues to be almost a quarter down on last year.
Talks on refinancing its debts are ‘progressing at pace’ which would ‘advance additional liquidity’ to the distributor. In January it secured a facility of up to £85m from Barclays and Wells, depending on the value of its assets.
The group’s net debt at 30 June was £36.2m up from £31.4m at the end of 2025 – despite £15m of property sales. It has warned that H1 losses are higher than a year ago. Headlam says it is looking at ‘further support from its existing lenders, the sale and leaseback of the Coleshill HQ, further property disposals, a wider group refinancing, new partnerships and other broader corporate actions. A refinancing process for the group’s debt package is progressing at pace and financing offers have been received that would, if completed as currently proposed, advance additional liquidity to the group.
‘The Strategic Review does not include seeking potential offers for the company. At this stage there can be no certainty that the group will be successful in implementing any of these options, or any alternative solution to improve the group’s financial position, within a reasonable timeframe, or at all.
‘With a strengthened balance sheet, the board believes it would be able to alleviate the current liquidity issues that are negatively impacting its ability to trade effectively and allow time to accelerate the transformation programme with the aim of returning Headlam to a profitable and cash generative business as quickly as possible.’
During its efforts to outs three Headlam directors, major shareholder First Seagull said it was willing to provide funds to the group, but it is unknown if talks
took place.
Sales for the six month period are down 22.8% to £188.8m, and the decline has continued into July.
‘The revenue decline partly reflects the planned reduction in low margin revenue as the business implements its core customer strategy to refocus on independent retailers and flooring contractors. Revenue has been further impacted by weak market conditions, poor inventory availability on core product lines, competitor dynamics and unseasonably warm weather late in the period, impacting enquiry levels.’
‘The revenue decline partly reflects the planned reduction in low margin revenue as the business implements its core customer strategy to refocus on independent retailers and flooring contractors. Revenue has been further impacted by weak market conditions, poor inventory availability on core product lines, competitor dynamics and unseasonably warm weather late in the period, impacting enquiry levels.’
