Business
Pre-Close Trading Update
Pre-Close Trading Update.
About this update from Headlam Group Plc
[{"type":"text","content":"\n\n27 July 2023\nHeadlam Group plc\n('Headlam' or the 'Company')\n \nPre-Close Trading Update\n \nHeadlam Group plc (LSE: HEAD), the UK's leading floorcoverings distributor, is providing a Pre-Close Trading Update in respect of the first six months of the year to 30 June 2023 (the 'Period') ahead of announcing interim results on 5 September 2023.\n \nRevenue in H1 2023 was 2.5% above that of H1 2022 at £332 million (H1 2022: £323 million). This was despite residential trading volumes being down nearly 7% H1 2023 versus H1 2022 due to the documented weakness in consumer RMI spend, and reflects good progress made under the Company's revenue growth strategy. Revenue contributions from larger customers and the trade counter roll-out were up 26% and 9% respectively against the same period last year, and the Company continues to broaden its offering and demonstrate market share gains*.\n \nHowever, recent residential trading volumes are weaker than expectations, with recovery now expected to take place over a more prolonged period. Rolling 12-month volumes are around 20% lower than 2019, with recent independent data showing that DIY / Home Improvement spend particularly for larger items is the most affected non-essential category in terms of reduced spend. This backdrop will more than offset the Company's positive strategic performance and mitigating actions in the near term. Accordingly, and taking a prudent view, it is now anticipated that the Company's underlying profit before tax for the year will be significantly below current market expectations**.\n \nAs previously announced, as well as lower residential volumes, gross margin and profit in H1 2023 were also impacted by a reduction in manufacturer led price increases and increased operating costs versus H1 2022. Combined people and energy costs were up almost £5 million in H1 2023 against H1 2022 due to inflationary pressures, despite headcount being reduced in line with volume reduction during the Period. Underlying profit before tax in H1 2023 was therefore lower at £6 million (H1 2022: £17 million), which also reflects strategic related investment to support future growth. Stra...