Headlam has seen its share price plunge by 10% after revealing a huge fall in trading and that it is looking at selling off its head office.
The flooring distributor says sales were 21% lower in the four months to the end of April.
The group ‘has continued to experience challenging trading,’ it says and has blamed ‘in part’ its move away from opening trade counters and low-margin higher volume retailers, ‘coupled with the continuation of difficult end market conditions. As a result, the group continues to incur significant underlying operating losses.’
The group is scheduled to hold a general meeting on 2 June at which 11% shareholder First Seagull is seeking to remove three of its non-executive directors, including chairman Stephen Bird.
Headlam says it is looking at selling and leasing back its Coleshill head office – where the general meeting will be held – in order to raise funds to improve its balance sheet.
‘Under the leadership of the new management team who have now been in place for eight weeks, certain operational improvements have already been implemented. In addition, the group has put through a price increase in May and targeted surcharges reflecting recent higher raw material input prices, which are being passed onto customers. The company will continue to monitor any further impact from macro-economic and geopolitical issues and act accordingly. The team remains focused on delivering further significant operational and commercial improvements and will report on progress in more detail with our interim report,’ it says ahead of its AGM.
‘It has been a busy couple of months since joining. The board remains of the view that, while there is lots to do on multiple fronts, there is a pathway to return to profitability during 2027. To deliver this we need to act with speed and decisiveness, and this is the focus of my team,’ says Rob Barclay, Headlam ceo.
