Headlam LFL sales drop amid soft UK market
Floor coverings distributor Headlam reported a rise in full-year revenue and profit but a drop in like-for-like sales amid a soft UK market.
In its results for the year to the end of December 2018, the company said underlying pre-tax profit pushed up £0.3m to £43.4m on revenue £708.4m, up 2.3%. However, LFL sales declined 4.2% and 1.8% , respectively, in the UK and Continental Europe, with the softer market being more keenly felt in the UK.
The group highlighted a noticeable weakness in the UK residential sector where its distribution business is more heavily weighted. This particular weakness resulted in the percentage of total revenue attributable to the residential sector declining to 64.6% from 67.9% in 2017.
The company said UK LFL sales improved in the second half of the year compared with the first as the commercial sector reversed a small decline in the first half to end the year up 0.6%, and the full-year residential sector decline of 6.2% represented an uplift on the first half. However, the second-half performance in Continental Europe was weaker than the first, moving from a modest positive like-for-like position to a decline.
Headlam said it has seen a positive start to the year, with both the UK and Continental Europe up on a like-for-like revenue basis.
Chief executive Steve Wilson said: "Despite the generally softer trading backdrop that was evident throughout 2018, it was pleasing that total revenue and underlying profit increased in the year.
"Our focus for 2019 and 2020 is operational and financial improvement through the pursuit of efficiency initiatives. These will help mitigate against any future weaker trading backdrops and enable the delivery of an improved performance going forward. We have had a positive start to the year and I would like to thank all our people for their hard work and dedication."
The group said it still expects profits for 2019 to be lower than last year amid general market weakness in the UK and economic and political uncertainty.
"This situation serves to reinforce our concerted commitment to pursuing multiple efficiency initiatives aimed at improving operational and financial performance, developing the business, and providing a more robust platform for future growth," it said.
At 1515 GMT, the shares were up 1% to 422.05p.