Headlam has seen its sales decline slow since the turn of the year.
The country’s largest flooring distributor says sales in January and February were down by 6%, compared by a 9.7% drop in 2024. Then UK sales fell by 8.9% and continental Europe by 14.9%.
It says it was able to maintain market share during the year, while revenue growth in trade counters and larger customers ‘more than offset by decline in regional distribution.’
As previously announced, the underlying pre-tax loss £34.3m was ‘impacted by market decline and cost inflation, with a second consecutive year without price inflation in the core distribution market.’
The group says it has upgraded the targeted benefits of its accelerated transformation plan: targeting profit improvement of £25m (from an original £15m plus) and a cumulative one-off cash inflow of at least £90m (previously £70m plus) from property disposals and working capital optimisation, with one-off cash costs of £30m (previously £25m).
It says product simplification has started to deliver working capital efficiency through higher stockturn and centralisation of back-office processes and support functions are substantially complete.
‘In the face of ongoing market weakness, 2024 has seen Headlam accelerate a major strategic restructuring of the group. At its heart, this transformation plan will simplify our customer offer, simplify our network and simplify our operations, positioning the group to increase market share, structurally improve profitability and reduce the capital intensity of the business. We have made strong early progress on our plan and, today, upgrade the expected financial benefits from it,’ says Chris Payne, Headlam chief executive.
‘Flooring is a discretionary big ticket purchase and has been one of the weakest performing categories for consumer spending and the impact of the challenging trading conditions is evident in the group’s performance for 2024. Nevertheless, the board is encouraged by the significant amount of strategic progress that has already been driven against our plans and we remain focussed on delivering further momentum to ensure the business is positioned for market recovery and long-term success.’
