Headlam warns ‘market weakness continued into January and February’

Flooring distributor Headlam has told shareholders that sales volumes remain well down on 2023, despite a recent improvement.

The group says that volumes have fallen at is UK and Continental European operations ‘despite continued growth in Larger Customers and Trade Counters.’ Sales in February were 6% lower than 2023, but higher than January 2024.

The falls compare with a 1.1% drop in sales to £656.5 in 2023. The UK sector was flat, despite large customer increases of 26% and trade counters of 8.5% respectively. It says UK sales volumes were down by 5% but it had invested £6.3m in cutting tables, sortation units and other warehouse and transport equipment ‘to improve the customer proposition for independent retailers.’

Underlying pre-tax profits dropped from £37.1m to £11m.

The group says that year-on-year decline in profit was ‘principally driven by the macro and industry headwinds, including: £11m profit impact from lower volumes, £10m from operating cost inflation, a £5m unwind of manufacturer-led price benefits in the prior year and £4m from strategic investments; partially mitigated by £10.3m of efficiencies and cost savings.’

It says that 38% of sales are now through digital channels.

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