Headlam has warned that although recent trading has been as expected, ‘economic and industry headwinds’ will continue into next year.
‘Trading in July and August 2023 has been broadly in line with expectations. Furthermore, we have made good progress in implementing mitigations. As such, management’s expectations for the full year are unchanged,’ says Chris Payne, Headlam chief executive.
‘Looking ahead, the ongoing macroeconomic and industry headwinds are likely to prevail into 2024, with suppressed residential consumer spending continuing. However, the medium-term market outlook is strong: annual volumes are currently around 20% lower than in 2019 and we expect volumes to improve significantly over the coming years. This, combined with the increasing benefits as the strategic initiatives mature, provides opportunities for material profit improvement over the medium term including as a consequence of high operational gearing. Furthermore, the cash requirement, albeit relatively modest, from the strategic initiatives is anticipated to reduce, providing a further boost to cash generation.
‘The group is well positioned despite the market backdrop, with ongoing expansion of its market leading position, broadening of its market presence, increased revenue streams, and ongoing efficiencies. All of which will support future financial performance, particularly as volumes return and as upfront strategic investment moderates,’ he says.
