Floorcoverings distributor Headlam Group plc has reported revenue growth despite ‘suppressed residential volumes’.

According to its latest trading update for the first four months of the year and ahead of its Annual General Meeting, sales are up 3.4% above the same period in 2022 despite volumes in the residential sector market being down due to the current economic environment and in particular weak consumer confidence.

“There was also limited contribution from manufacturer-led price increases which were prevalent in 2022”, Headlam added.

New and increased revenue contributions from its larger customers and trade counters growth strategies have helped offset lower underlying core residential trading volumes. Additionally, the commercial sector has ‘performed well’ and continues to be ‘buoyant’ ahead of the traditionally busy summer trading period.

“Notwithstanding the overall positive year on year revenue performance, the lower residential volumes coupled with the moderation in price increases has reduced gross margin in the first four months of the year,” Headlam said.

“However, the Company is deploying several mitigating actions. These include undertaking further cost control, reviewing prices, in particular where prices have previously been held despite the inflationary environment, and launching/relaunching products under the own product brands strategy ahead of the busier second half trading period.

“Many of these actions have already been successfully implemented and are starting to contribute to overall business performance, albeit the benefits are mostly second half weighted and overall profit performance remains dependent on consumer sentiment in the residential market.”