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Headlam Group (HEAD) investor relations material
Headlam Group H1 2025 earnings summary
Complete event summary combining all related documents: earnings call transcript, report, and slide presentation.
Executive summary
Market conditions remain challenging, with a 3.8% revenue decline year-over-year and a 25% volume reduction in the flooring market since pre-COVID, though recent months show a flattening trend and some positive lead indicators.
Transformation plan is progressing, including full integration of 32 businesses, network simplification, and customer-centric initiatives, with an upgraded annual profit improvement target of at least £35m by end of 2026.
Decision made to exit/sell Continental European businesses, focusing solely on the UK market.
Board and management are aligned with shareholders, increasing personal investment and accelerating the path to profitability.
Financial highlights
Revenue declined 3.8% on a same-day basis year-over-year for the first half, with UK revenue at £244.7m.
Gross margin improved slightly to 30.8% from 30.4%, despite a mix shift to lower-margin larger customers.
Operating costs rose 2.4%, mainly from trade counter investments, but underlying costs declined due to transformation benefits.
Loss before tax was £19.9m; discontinued operations (Continental Europe) contributed a £2.1m loss.
Non-underlying items totaled £11.9m, including £5.8m in transformation costs and £3.2m goodwill impairment.
Outlook and guidance
Market remains weak with bumpy consumer demand, but housing transactions and wage growth are positive indicators for future recovery.
Transformation plan benefits upgraded to at least £35m, with consensus expecting break-even by end of 2026 into 2027 and at least £10m profit benefit in 2025.
Focus remains on creating a sustainable, profitable business model independent of market recovery timing.
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