16th May 2014 11:55
LONDON (Alliance News) - Headlam Group PLC, the floor-coverings distributor, Friday said it has enjoyed a good start to the new year, with group revenues up 8.9% in the first four months of the year, boosted by a strong performance in the UK floorcovering market.
However, while the group reported good revenue growth in the period on the back of a more positive trading environment, it said gross margins continue to be hit by a highly competitive UK market, and weaker performance in some of its continental Europe businesses, notably in Switzerland.
"The board are cautiously optimistic that the group's internal financial objectives for 2014 could be exceeded. The cautious sentiment is due to a demanding second half objective and a need for floorcovering markets to show continued improvement," said Group Chief Executive Tony Brewer in a statement.
In the four months to April 30, UK revenues rose 11%, with like-for-like revenues up 8.9%, helped by weaker comparables due to lacklustre markets and unfavourable weather during those months last year. Its UK gross margin fell by 50 basis points during the period.
"Whilst the weaker comparatives are a flattering factor... there is no doubt that the UK business has continued to grow market share during this period," the company said.
Headlam said that trading remains difficult in continental Europe, as revenue growth in its French and Dutch bushiness, up 2.3% and 3.2% respectively, were almost offset by weakness in its Swiss business, which recorded a 3.6% decline in revenues. Overall revenues across the three businesses were up 0.5% on a constant currency basis, while they saw a collective fall in gross margin by 30 basis points during the period.
The group said its financial position during the first four months of the year has not changed significantly from where it was at the end if last year.
The company said it expects to release its half-year results on August 22.
Headlam shares were up 3.2% at 488.00 pence before midday Friday.
By Rowena Harris-Doughty; [email protected]; @rharrisdoughty
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