28th Aug 2019 11:42
(Alliance News) - Flooring distributor Headlam Group PLC on Wednesday reported a modest first-half revenue rise, but its profit fell after recording a depreciation of its assets.
In the six months to June 30, revenue rose by 3.3% to GBP348.7 million from GBP337.5 million a year before, but pretax profit fell by 2.7% to GBP16.0 million from GBP16.4 million. The decline was primarily due taking a GBP7.6 million depreciation of right-of-use assets. Right-of-use assets include properties and motor vehicles.
On an underlying basis, pretax profit fell by 4.3%, in line with the company's guidance that underlying profit will fall year-on-year due to inflationary pressure on distribution costs and administrative expenses.
The Residential sector delivered revenue growth of 2.0% to GBP222.9 million from GBP218.5 million, while the Commercial sector posted a rise of 5.7% to GBP125.8 million from GBP119.0 million.
The company's interim dividend was unchanged at 7.55 pence per share.
Although the second half of the year is traditionally stronger, the company said it was "mindful of political uncertainty" and maintains its expectations for the full-year.
Headlam also added that it has maintained a "modest level" of contingency stock to mitigate any potential impact from Brexit.
Chief Executive Steve Wilson said: "The company delivered a reassuring performance during the period in what remained relatively restrained markets, with growth on an absolute and like-for-like basis in both the UK and Continental Europe. Growth has continued into the second half of the year to-date, and we currently maintain our overall expectations for the full year."
Shares in Headlam were down 1.8% at 412.00 pence each in London on Wednesday morning.
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