Floor coverings distributor Headlam has reported a decline in sales as market conditions continue to be weak.
According to its latest trading update for the six months to the end of June 2024, ahead of announcing its half year results in September, trading has been in line with expectations with revenues down 11.8% year-on-year.
UK sales are down 11.3% and Continental Europe slipped 15.9%. This reflected the “ongoing weakness” in the floor coverings market throughout the first half of this year, driven by continued decline in consumer spending on home improvements.
The Group is expected will deliver an underlying loss before tax for the Period of approximately £16m, consistent with its previous trading update earlier this year.
In May, Headlam announced that the Group was accelerating its strategy to make the company a more effective organisation and to simplify its offer to customers, whilst also investing in the proposition across all of its customer groups in order to maintain and grow market presence.
“The planning phase of this programme of initiatives is progressing well and in line with the timetable and we will provide a more detailed update in September, alongside the Group’s half year results,” Headlam said.
“These initiatives are expected to deliver simplification in customer engagement, enhancement to customer service, operational efficiencies, material profit improvement and significant one-off cash benefits from the disposal of surplus property and working capital reduction, the majority of which will be realised in 2025.”
Looking ahead, Headlam said it expects to see an improvement in trading in the second half of the financial year assuming market conditions gradually improve, although it does not anticipate the market returning to growth until 2025.
Chris Payne, Chief Executive, added: “While current market conditions remain challenging, we are pleased with the early progress we have made on accelerating our simplification and integration of the business together with the development of exciting improvements to our customer offer and service.
“We remain confident that our strategy, and the changes we are making, will strengthen Headlam over the medium term, ensuring that we are well placed to take the opportunity when the market recovers.”
