Slide 1: Interim Results Presentation
INTERIM RESULTS PRESENTATION For the six months ended 30 June 2019 28 August 2019
Slide 2: Company Overview
COMPANY OVERVIEW Europe’s leading floorcoverings distributor • Distribution channel between suppliers and trade customers of floorcoverings • Linking together a global manufacturing supply base and most extensive customer base across the UK and Continental Europe • Suppliers receive an unparalleled
Slide 3: H1 2019 Financial Highlights
H1 2019 FINANCIAL HIGHLIGHTS¹ • Total revenue increased 3.3% to £348.7 million (H1 2018: £337.5 million), with both the residential and commercial sectors in the UK and Continental Europe all contributing positively • Like-for-like² revenue increased 1.8% and 3.2% in the UK and Continental Europe re
Slide 4: H1 Financial Track Record (5 Years)
H1 FINANCIAL TRACK RECORD (5 YEARS) Revenue (£million) Underlying* Operating Profit (£million) Underlying* Profit Before Tax (£million) £348.7m £18.1m £17.0m +3.3% (H1 2018: £337.5m) 0.0% (H1 2018: £18.1m, not restated) -4.3% (H1 2018: £17.7m, not restated) 2019 348.7 2019 18.1 2019 17.0 2018 337.5
Slide 5: H1 2019 Operational Highlights
H1 2019 OPERATIONAL HIGHLIGHTS • Resource focused on evaluating and implementing various constituents of the operational efficiency programme to improve operating performance, the customer service proposition and margin • Early contributors to performance include the roll-out of a group procurement
Slide 6: UK Distribution Businesses Daily Sales
UK DISTRIBUTION BUSINESSES DAILY SALES £k Sales 2800 2600 2400 2200 2000 2015 1800 2016 2017 1600 2018 2019 1400 Jan Feb Mar Apr May Jun July Aug Sep Oct Nov Dec 5
Slide 7: H1 Income Statement
H1 INCOME STATEMENT H1 2019 H1 2018 (not restated) Variance £000 £000 Revenue 348,660 100.0% 337,489 100.0% 3.3% Cost of sales (235,448) 67.5% (227,695) 67.5% 3.4% Gross profit 113,212 32.5% 109,794 32.5% 3.1% Distribution costs (68,376) (19.6%) (66,090) (19.6%) 3.5% Administrative expenses (26,699)
Slide 8: H1 2019 Revenue Movement
H1 2019 REVENUE MOVEMENT Continental UK Europe Total £000 £000 £000 Revenue for six months ended 30 June 2018 286,600 50,889 337,489 Split % 84.9% 15.1% Items contributing to annual growth to six months ended 30 June 2019 Like-for-like organic growth 5,210 1,248 6,458 LFL % 1.8% 3.2% 2.0% Acquisitio
Slide 9: Adjustments Recognised on IFRS 16 Adoption
ADJUSTMENTS RECOGNISED ON IFRS 16 ADOPTION Income Statement Impact H1 2019 Under new standard Under previous standard £000 £000 Costs charged to operating profit 7,603 8,028 Interest expense 836 - Total costs charged to the income statement 8,439 8,028 Net impact 411 Balance Sheet Impact Impact as a
Slide 10: H1 2019 Underlying Operating Profit Movement
H1 2019 UNDERLYING OPERATING PROFIT MOVEMENT £000 Underlying operating profit 2018 18,142 Gross margin improvement Volume benefit 1,674 Pricing benefit (388) Effect of acquisitions 2,132 Total change in gross profit 3,418 Expense movement Distribution (1,214) Administration (599) Effect of acquisiti
Slide 11: H1 Cash Flow Movement
H1 CASH FLOW MOVEMENT 2019 2018 2017 £000 £000 £000 Net cash flow from operating activities Profit before taxation 15,968 16,418 16,767 Depreciation, amortisation and impairment 3,385 3,229 3,203 Depreciation of right of use asset 7,603 - - Profit on sale of property, plant and equipment (13) (24) (
Slide 12: Balance Sheet as at 30 June
BALANCE SHEET AS AT 30 JUNE 2019 2018 £000 £000 Non-current assets PPE 107,363 101,836 Right-of-use assets 46,116 - Intangible assets 50,218 50,085 Deferred tax assets 572 460 204,269 152,381 Current assets Inventory 142,463 136,743 Receivable 125,928 129,560 Cash 60,721 52,560 329,112 318,863 Total
Slide 13: UK Sterling Net Debt Daily Balances
UK STERLING NET DEBT DAILY BALANCES Average net debt of £1.6 million in H1 2019 (H1 2018: average net £ debt of £13.5 million) 60,000,000 50,000,000 40,000,000 30,000,000 20,000,000 10,000,000 0 (10,000,000) (20,000,000) (30,000,000) (40,000,000) (50,000,000) 05-Feb 12-Feb 19-Feb 26-Feb 04-Mar 11-Ma
Slide 14: Operational Efficiency Programme
OPERATIONAL EFFICIENCY PROGRAMME GNFR Fleet Continued roll-out of a group procurement approach to Extended vehicle leasing contracts entered into upon Goods Not For Resale (‘GNFR’) to leverage group purchasing renewal or replacement to deliver reduced lease costs to deliver cost savings and service
Slide 15: Operational Efficiency Programme Continued
OPERATIONAL EFFICIENCY PROGRAMME CONTINUED Inventory Management Delivery Fleet Utilisation A stock re-ordering and management algorithm to i) Consolidation of geographic specific deliveries, whereby improve stock-turn and increase warehouse capacity; ii) deliveries from different Headlam businesses
Slide 16: Construction of Ipswich Distribution Centre
CONSTRUCTION OF IPSWICH DISTRIBUTION CENTRE
Slide 17: Current Trading & Outlook
CURRENT TRADING & OUTLOOK Brexit Preparations Continued Growth Expectations Maintained Preparations made around Continued growth post the Ahead of proceeding further potential impact of Brexit, Period-end, with a small into the traditionally stronger including maintaining a overall like-for-like rev
Slide 18: Contact Details
CONTACT DETAILS Headlam Group plc Tel: 01675 433000 PO Box 1 Fax: 01675 433030 Gorsey Lane E-mail: headlamgroup@headlam.com Coleshill Sat Nav: B46 1JU Birmingham B46 1LW www.headlam.com