Headlam's (HEAD) half-year results contained few surprises - the floor coverings specialist warned in July that earnings would be lower than last year and guided down analysts' full-year forecasts. The difficult trading has continued into the second half - though management said August showed "a degree of improvement".
Half-year operating profit slumped 9.5 per cent to £9.7m, with like-for-like sales down 0.8 per cent in the UK and 5.2 per cent in Europe. Both the commercial and residential flooring sectors in Britain remained subdued, but management believes it has increased its share of commercial markets and maintained share in the housing sector. Self-help initiatives included product launches, staff training and acquisitions - Headlam completed the buy-out of Hall's Flooring in March. The extension of the Coleshill distribution hub is on track and will be operational at the beginning of 2014, boosting efficiency.
Meanwhile, conditions in Europe were exacerbated by the housing slump in Holland. Europe accounts for 16 per cent of group turnover but just 5 per cent of earnings, so profitability is modest.
Shore Capital expects pre-tax profit for the full year of £24.5m, giving EPS of 22.5p, rising to £26.4m and 24.3p in 2014.
| HEADLAM GROUP (HEAD) | ||||
|---|---|---|---|---|
| ORD PRICE: | 380p | MARKET VALUE: | £318m | |
| TOUCH: | 375p-390p | 12-MONTH HIGH: | 415p | LOW: 295p |
| DIVIDEND YIELD: | 3.9% | PE RATIO: | 15 | |
| NET ASSET VALUE: | 202p | NET CASH: | £4.8m | |
| Half-year to 30 Jun | Turnover (£m) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
|---|---|---|---|---|
| 2012 | 279 | 10.1 | 9.11 | 4.65 |
| 2013 | 280 | 9.08 | 8.40 | 4.65 |
| % change | - | -10 | -8 | - |
Ex-div: 4 Dec Payment: 2 Jan | ||||
