24th Aug 2015 07:48
LONDON (Alliance News) - Floor coverings distributor Headlam Group PLC on Monday said its pretax profit rose in the first half of the year on the back of strong revenue growth in the UK, prompting it to hike its dividend and say it expects to slightly outpace its forecasts for the full year.
Headlam said its pretax profit rose to GBP12.3 million in the first six months of 2015, up from GBP10.8 million in the corresponding period a year earlier, pushed up by a 4.0% rise in revenue to GBP313.5 million from GBP301.6 million. The group said it will pay an interim dividend of 6.00 pence per share, up 15% from the 5.20 pence paid a year earlier.
The group said it made further market share gains in the UK in the half, with like-for-like revenue rising by 5.4%, outperforming the 3.4% growth of the wider market. The number of UK businesses the company operates increased to 56 in the half following the acquisitions of Matty's Carpets. The group also opened a new showroom in Clerkenwell in London in order to target the specified commercial flooring market.
Headlam said sales growth in the first half in the UK was tilted towards the commercial market, which contributes 31% of its revenue compared to the 69% from residential markets.
Headlam's European operations, covering the Netherlands, France and Switzerland, however, continue to contend with tough market conditions, and revenue fell to GBP39.0 million from GBP43.8 million in the half. While some signs of recovery emerged in the Netherlands in the half, trading in France and Switzerland remains tough and Headlam expects that to remain that way for the rest of 2015.
The company said the solid trading in the first half has continued into the first eight weeks of the second, and the group anticipates its full-year results will come in slightly ahead of its expectations.
"The first half results underline the growing momentum in the UK market and particularly in our business. The group's UK residential business has performed well and the slightly stronger like-for-like growth across our commercial activities points towards improving confidence in the wider business community," said Chief Executive Tony Brewer.
Headlam shares were up 1.0% to 474.76 pence on Monday morning.
By Sam Unsted; [email protected]; @SamUAtAlliance
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