Headlam Group (HEAD) Trading Update summary

Trading performance

• Revenue declined 11.8% year-on-year for the six months to June 2024, with UK down 11.3% and Continental Europe down 15.9%, reflecting weak consumer spending on home improvements.

• Underlying loss before tax for the period is approximately £16 million, consistent with previous guidance.

• Revenue from Larger Customers and Trade Counters continued to grow, with Trade Counters exceeding £100 million on a rolling 12-month basis.

Financial position and liquidity

• Net debt at the end of June was £28 million, with over £70 million of cash and undrawn facilities available.

• Sale of surplus property in Stockport completed for £7.5 million, about 10% above recent market valuation.

• Group owns property valued at £142.1 million and has agreed a new covenant package with lending banks for financial flexibility.

Strategic initiatives and outlook

• Acceleration of strategy aims to simplify customer engagement, enhance service, and improve operational efficiency.

• Planning phase of strategic initiatives is on track, with further updates expected in September.

• Initiatives are expected to deliver profit improvement and significant one-off cash benefits, mainly in 2025.

• Improvement in trading is expected in the second half of 2024 if market conditions gradually improve, but market growth is not anticipated until 2025.

• Full-year trading is expected to be in line with current market expectations.