Floorcoverings group Headlam has reported a decline in UK sales following a weak residential sector performance.
According to its interim results for the six months ended 30 June 2022, total sales fell to £323.8m from £329.9m against the same period last year.
Within its Continental Europe (France and The Netherlands) division, sales rose 5.2% helping to offset a 2.9% decline in the UK related to weakness in the residential sector. The UK and Continental Europe accounted for 86.3% and 13.7% of total revenue respectively.
Within the UK, the commercial sector was a positive contributor, up 4.8%, as it showed recovery from mainly COVID-19 related issues in the prior two years. Conversely the residential sector declined 6.3% as it was particularly affected by the inflationary impact on consumer spending.
Statutory profit before tax resulted at £21.6m, up from £14m, an uplift on underlying profit due to proceeds received as part of an ongoing insurance claim creating a net profit from non-underlying items.
During the period, Headlam said it is making ‘good progress’ in demonstrating and delivering on the revenue growth and operational efficiency strategy, while new and improved trade counter sites are demonstrating strong KPIs against uninvested sites. It is on track to have a total of 59 sites (of which 28 invested) by year end towards the 90 target by 2025.
Furthermore, Headlam added that new customers were gained in the multiple retailer / larger customer space, including recent contracts signed with a top 10 UK housebuilder and Homebase.
On current trading, the group said revenue performance for the year to date is continuing to be only marginally below the prior year period and remains on track to meet market expectations for the year, although trading remains challenging and operational cost inflation continues.
Chris Payne, Chief Executive, said: “The financial performance in the Period was pleasing given the economic environment and inflationary impact on consumer spending. Underlying profitability improved year on year, and revenue was only marginally below the prior year period despite a weak residential sector. Commissioned specialist research indicated that the Company improved its market share in the Period, and new customers have also been secured within the multiple retailers / larger customers space.
“All of this provides a high degree of confidence that the Company’s strategy of driving additional revenue opportunities from a more efficient and modernised operating base and improving the service offering to all customers is the right one. Headlam should be set fair for when the current headwinds ease, and the Company is focused on long term success.”