Headlam has shelved a computer system designed to integrate core functions across the group after spending more than £8m on it.
The move comes as it continues to search for savings in a face of a £30m increase in pre-tax losses as it looks to turnaround its fortunes.
‘Reflecting the amount, and pace, of change in the business, we have decided to pause the implementation of the new ERP. The development work performed to date has been “mothballed” in readiness for the project recommencing at the appropriate time,’ says the flooring distributor.
£5.6m was spent on the cloud-based system in the past year and £2.6m in 2024. ‘The decision was taken to temporarily pause the ERP replacement programme whilst the business focuses on the transformation plan.’
The group says it is making progress with the turnaround plan, which has involved reducing staff numbers as part of right-sizing measures, lining-up property sales and concentrating on its core independent retailer and contractor operations rather than chasing higher volumes – which had low margins – to fill its distribution network.
‘Our new core customer strategy, combined with the ongoing benefits of our transformation programme, provides a clear road map to profitability in 2027 and beyond. Current cost saving initiatives are progressing as anticipated with milestones being met. Whilst our current trading environment remains challenging, this should provide reassurance to all stakeholders that Headlam is delivering and will be able to capitalise on its position as the preeminent distributor of flooring products in the UK,’ says Stephen Bird, Headlam interim executive chair.
‘The independent retailers and contractors we serve are resilient. The market will recover and when it does, we will be well placed to support them – initially smaller, but stronger, more focused, and more profitable. I would like to thank all employees for their commitment and in ensuring this is a business model that can weather market cycles and deliver consistent returns.’
Sales dropped, partly through the turnaround plan, by 4.6% to £498.7m in 2025, with pre-tax losses growing from £38.1m to £69.6m.
EBTIDA losses rose from £5m to £12.5m.
