Headlam Group PLC Trading Update (6249Q)
01 December 2016 - 6:00PM
UK Regulatory
TIDMHEAD
RNS Number : 6249Q
Headlam Group PLC
01 December 2016
1 December 2016
Headlam Group plc
("Headlam" or "the Company")
Trading Update
Headlam Group plc (LSE: HEAD), Europe's largest distributor of
floorcoverings, is pleased to provide a trading update ahead of
announcing its preliminary results for the year ended 31 December
2016 in March 2017.
Following the interim results announcement on 24 August 2016,
the Company has continued to experience no discernible impact on
trading following the EU referendum in June 2016, with only August
slightly weaker than expected because of a softer commercial market
in the UK. Furthermore, and as announced on 24 August 2016, the
Company sought to mitigate cost inflation due to a weakening of
sterling by implementing price increases for the residential
floorcoverings imported from Continental Europe. The price
increases which, when fully implemented, averaged 3.5% have
remained in place since their introduction in August 2016 and,
pleasingly, appear to have had no adverse impact on residential
sector revenue. As a result of this, and due to continued
volatility in foreign exchange rates, it is the Company's intention
to keep these price increases in place going forward.
For the ten-month period to 31 October 2016, total revenue was
up approximately 5.2% against the same period in the prior year,
reflecting a continued strong performance from both the UK and
Continental European businesses albeit with the Continental
European businesses seeing a slight softening in performance when
measured in local currency.
UK revenue, which accounted for approximately 88% of total
revenue in the ten-month period, has continued to track above the
3.2% growth forecast by AMA Research Ltd for the UK market in 2016,
demonstrating the Company's continued outperformance of a market
which has shown, and continues to show, steady growth. UK
like-for-like revenue in the second half of the year to 31 October
2016 was up approximately 4.8% (of which 0.8% relates to the price
increases introduced since August) against the same period in the
prior year, and is comparable with the outperformance achieved in
the first half of 2016. Trading during November 2016 has maintained
this trend.
The Continental European businesses achieved combined revenue
growth of approximately 2.6% for the ten-month period to 31 October
2016 against the comparable prior period when measured in constant
currency, which increases to approximately 13.8% when translated
into sterling. Whilst representing a very marginal softening
compared with the half year revenue growth of 2.8%, the result
represents sustained improvement on prior periods.
Trading in the fourth quarter, traditionally Headlam's busiest
trading period and characterised by a high volume of small
residential orders, is continuing well. Subject to trade continuing
as anticipated during the remaining important weeks of the year,
the Company expects to report preliminary results before
non-recurring items* ahead of current consensus market
expectations.
*The non-recurring items predominately relate to personnel
changes arising during the second half of the year.
The information contained within this announcement is deemed to
constitute inside information as stipulated under the Market Abuse
Regulations (EU) No. 596/2014. Upon the publication of this
announcement, this inside information is now considered to be in
the public domain.
Enquiries:
Headlam Tel: 01675 433000
Steve Wilson, Chief Executive
Officer
Investec Bank plc (Joint Tel: 020 7597 4000
Corporate Broker)
Garry Levin / David Flin
/ Alex Wright
Arden Partners plc (Joint Tel: 0121 423 8900/020
Corporate Broker) 7614 5900
Jonathan Keeling / Steve
Douglas / Catherine Miles
Buchanan (Financial PR and Tel: 020 7466 5000
IR)
Mark Court / Sophie Cowles
/ Catriona Flint
Notes for Editors:
Headlam is Europe's largest distributor of floorcoverings having
grown significantly via acquisition and organic growth since
1992.
The Company comprises 61 wholly-owned distribution businesses,
56 in the UK and five in Continental Europe (France, Switzerland
and Netherlands). Each business is integrated into and supported by
the Company's platform while operating under their own trade brand
which allows a much greater reach into the Company's customers.
Headlam's customers are in the residential and commercial sectors
and comprise principally independent retailers, and also multiple
retailers and flooring contractors.
Headlam sources an extensive range of floorcoverings (including
carpet, vinyl, wood and laminate) covering a wide price range
sourced principally from manufacturers located across 12 countries,
and Headlam's extensive network of distribution hubs, distribution
centres and service centres allows for cost effective distribution
and next day delivery to customers.
This information is provided by RNS
The company news service from the London Stock Exchange
END
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