Headlam Group (HEAD) investor relations material

Trading performance and transformation

• Revenue for continuing operations fell 21% year-on-year due to challenging market conditions and a strategic shift to focus on core customers.

• Significant underlying operating losses continue, but operational improvements have begun under new management.

• Price increases and targeted surcharges were implemented in May to offset higher raw material costs.

• Management remains focused on further operational and commercial improvements, aiming for a return to profitability in 2027.

Balance sheet and liquidity actions

• Recently completed the sale of one surplus property, with two more disposals imminent, generating approximately £15.3m in net proceeds for working capital and liquidity.

• Considering a sale and leaseback of the Coleshill property to further strengthen liquidity.

• Net debt increased to £40.3m at period end, up from £31.4m at 2025 year-end, due to operating losses and transformation costs.

• The Rochdale distribution centre was sold for £8.0m, with a short leaseback agreement until January 2028.

• Profit on disposal of Rochdale property will be recognised as a non-underlying item in 2026 results.

Board and governance updates

• Two new Non-Executive Directors joined the Board, enhancing leadership experience.

• Board remains confident in its composition and recommends rejecting resolutions in the upcoming vote.