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| Share Name | Share Symbol | Market | Type | Share ISIN | Share Description |
|---|---|---|---|---|---|
| Headlam Group Plc | LSE:HEAD | London | Ordinary Share | GB0004170089 | ORD 5P |
| Price Change | % Change | Share Price | Bid Price | Offer Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
|---|---|---|---|---|---|---|---|---|---|---|
| 1.00 | 0.56% | 179.00 | 178.00 | 181.00 | 180.00 | 180.00 | 180.00 | 62,568 | 16:35:30 |
| Industry Sector | Turnover | Profit | EPS - Basic | PE Ratio | Market Cap |
|---|---|---|---|---|---|
| Floor Covering Stores | 656.5M | 7.7M | 0.0953 | 18.89 | 145.4M |
From May 2019 to May 2024
TIDMHEAD
RNS Number : 5796G
Headlam Group PLC
05 March 2015
5 March 2015
Headlam Group plc
Preliminary Results for the Year Ended 31 December 2014
Headlam Group plc ("Headlam"), Europe's leading floorcoverings distributor, announces its preliminary results for the year ended 31 December 2014.
Financial highlights
-- Revenue up 5.3% at GBP635.2 million (2013: GBP603.1 million) -- Underlying Operating Profit up 13.7% at GBP 31.5 million (2013: GBP27.7* million) -- Underlying Earnings Per Share up 16.7% at 28.6 pence (2013: 24.5* pence) -- Earnings Per Share up 58.9% at 28.6 pence (2013: 18.0 pence) -- Dividends paid and proposed up 14.4% at 17.50 pence (2013: 15.30 pence)
-- The group repays GBP10.0 million on its committed facilities reducing the drawdown to GBP20.0 million on a facility of GBP40.0 million and ended the year with net funds of GBP24.7 million (2013: GBP14.0 million)
*There are no non-underlying items in 2014. The non-underlying items in 2013 relate to the impairment of intangible and tangible fixed assets, totalling GBP5.4 million. The underlying measures have been used to provide a better understanding of the business performance.
Operational highlights
-- Further gains achieved in UK market share with like for like revenues increasing by 5.9% exceeding the estimated market growth of 2.4%
-- Continental European markets remain weak and the trading environment for our Continental businesses continues to be difficult
-- Final dividend up 15.5% from 10.65 pence to 12.30 pence
-- Further bolt-on acquisitions during the year and early 2015 and the service centre network is extended to 27 with the addition of sites in Stoke, Norwich, Hayes and Leicester
Tony Brewer, Headlam's Group Chief Executive, said:
"The momentum created in the UK through the final quarter of 2014, has continued into January and February 2015 with 3.1% like for like growth over the two month period.
As we enter March, our UK businesses are well placed to take advantage of improving market conditions with a comprehensive array of product launches and marketing initiatives.
Whilst our businesses in Continental Europe continue to experience difficult markets, we are confident that the Group, overall, will achieve further progress during the year."
Enquiries:
Headlam Group plc
Tony Brewer, Group Chief Executive Tel: 01675 433000
Stephen Wilson, Group Finance Director
Buchanan Tel: 020 7466 5000
Mark Court / Helen Chan
For further detail on our business please visit:
www.headlam.com
Notes for editors
About Headlam
Headlam is involved with the marketing, supply and distribution of an extensive range of floorcovering products. The group's activities and facilities are located throughout the UK, France, Switzerland and the Netherlands.
The group's operations are focused on providing customers, principally independent floorcovering retailers and contractors, with a comprehensive and up to date range of competitively priced floorcovering products supported by a next day delivery service.
The approach provides Headlam's suppliers with an opportunity to achieve extensive and, in some territories, unparalleled market access backed by cost effective distribution.
In order to offer this level of service to its customers and suppliers, Headlam has developed a diverse and autonomous operating structure that includes 55 businesses across the UK and a further five in continental Europe.
The autonomous operating structure is a key contributor to the group's success, presenting experienced management teams with an opportunity to develop the individual identity, market presence and profitability of the business for which they are responsible.
Each business is supported by the group's continuing commitment to investment in people, product, operating facilities and IT. This commitment has underpinned the group's overall development and enabled Headlam to establish itself as Europe's leading floorcovering distributor.
Chairman's Statement
It is pleasing to be able to report that the group has made good progress during the year, delivering a further increase in revenue and improvement in profitability.
Overview
In the UK, the trading momentum established during the first half of the year continued through the second half with the improvement in organic growth supplemented by the fine full year performances from the businesses acquired during the previous year. Of particular satisfaction was the manner in which the UK businesses responded during the final quarter of the year, with like for like growth of 3.9%, delivering another strong performance on top of the impressive result achieved during the final quarter of 2013.
On the Continent, when measured in local currency, the revenue performance from our French business was slightly ahead of last year whilst our Dutch businesses achieved reasonable progress in what continues to be a difficult market. The businesses in both territories registered an improvement in underlying earnings. However, the market weakness evident in the first half in Switzerland continued during the second half resulting in a further reduction in annual revenue and profit. As was the case during the first half, the decline in the Swiss performance was sufficient to weaken the collective result from our Continental businesses which was down quite markedly on the previous year.
Whilst the result from our Continental businesses in recent years has been disappointing, the group's overall result for the year, once again, provides further evidence in support of the board's decision to commit to additional investment to expand and improve our facilities as exemplified by the project to extend the Coleshill national distribution hub which was completed and became fully operational in January 2014.
The commitment to investment, along with the decision to continue with our strategy and maintain our structure, has positioned the group in a place where it can quickly and profitably take advantage from an improvement in market activity.
Earnings and dividend
Earnings per share increased by 16.7% to 28.6p compared with last year's underlying result of 24.5p mainly as a result of the group's profit before tax of GBP30.3 million improving by 14.6% on last year's underlying profit before tax of GBP26.4 million.
The board is proposing to increase the final dividend by 15.5% from 10.65p to 12.30p resulting in a total dividend for the year of 17.50p, which represents an increase of 14.4% on 2013. The final dividend, if approved by shareholders at the Annual General Meeting ("AGM"), will be paid on 1 July 2015 to shareholders on the register at close of business on 5 June 2015.
Governance and board
We continue to promote a culture of openness and transparency and encourage participation and contribution from all our board members. The board recognises the value derived from good governance and the setting of high standards and the confidence it brings to our shareholders, management, employees, suppliers and customers.
Employees and Shareholders
Once again, our employees' attitude, determination and focused contribution has been pivotal to the continued success of the group.
Thank you to all our employees across the group for their dedication and hard work and our shareholders for their insightful observations and continuing support.
Dick Peters
Chairman
5 March 2015
Chief Executive's Review
Our Strategy
The group continues to follow a strategy focused on developing its floorcovering distribution business in the UK and continental Europe and improving the all round service offering it provides to its customers.
The group's size and structure provides a unique competitive advantage allowing it to deliver a range of benefits, including continuous product development, wide product diversity, extensive marketing support and next day distribution services, all of which are aimed at supporting and enhancing its customers' market position.
The development of the group's overall business is achieved by operating each individual business on an autonomous basis and encouraging the managers of each individual business to develop their own individual trading style, albeit within a well developed and consistently applied framework of operational and financial control.
This diverse business structure, particularly in the UK, covering the retail and commercial sectors, gives the group substantial reach across floorcovering markets and provides suppliers with a flexible channel for the sales, marketing and distribution of their products.
In addition, the structure has allowed the group to be active with a wide and diverse product portfolio across a significant proportion of the floorcovering market and has, to a degree, insulated the business from the downside risk arising from contracting or static markets.
Each individual business is supported by the group's commitment to continued investment in people, product, marketing, distribution facilities, service centres and IT. This structural investment, in conjunction with the development of the identity of each individual business, has enabled us to bring together the benefits of a market facing culture delivering the latest selling, marketing and product initiatives with a comprehensive and sophisticated logistics operation.
Ultimately, the total investment has underpinned the growth and performance of each business thus enabling the group to establish itself as Europe's leading floorcovering distributor.
Performance
One of the group's key performance objectives is aimed at achieving growth in market share. We drive this growth by setting each of our individual businesses, in conjunction with the businesses' management team, an annual growth parameter, which is collectively set to outperform the anticipated underlying growth in the market.
Once again, it is pleasing to record that the growth in UK revenue during 2014, as has consistently been the case for a number of years, outperformed growth in the UK floorcovering market with the like for like growth of 5.9% exceeding the estimated market growth of 2.4%.
The increases in like for like revenue derived from our residential and commercial product in the UK was broadly similar with residential up by 5.8% on the previous year and commercial up by 6.2%. The revenue mix between residential and commercial floorcoverings in the UK has generally remained at the same level for a number of years and 2014 maintained the balance at 68% and 32% respectively.
On the Continent, adverse economic headwinds continue to influence performance and the overall trading result has registered further decline during the year. However, we still believe that more can be made of the opportunities to develop each individual business notwithstanding the market issues in each individual territory. On a brighter note, gross margins are being protected and costs managed diligently. As ever, additional revenue would transform the operating fortunes of these businesses.
During the year, we have maintained our investment in people, marketing, infrastructure and the promotion, support and development of each of our individual business identities. We continue to provide extensive marketing support to our customers and through our well trained and knowledgeable sales teams, seek to gain an increasing share of their business. In addition, our teams are also focused on prospecting for new customers and business opportunities.
Investments
Over the five year period from 2010 to 2014, we have used the group's balance sheet strength allied with its positive cash flow, to invest GBP36.2 million in property, plant and equipment with a further GBP18.0 million expenditure forecast for 2015 and 2016. This level of capital expenditure has been running, on average, at a rate of 1.5 times depreciation.
The investment in infrastructure has been and is aimed at supporting our expansion plans, as illustrated by our intention to construct a new distribution facility in Ipswich, and enables us to manage our supply chain and inventory requirements more efficiently, as demonstrated by the recent extension to the Coleshill distribution hub.
Once the Ipswich distribution facility is fully operational, the group will have a well invested portfolio of four national distribution hubs and 14 regional distribution centres in the UK as well as four distribution centres on the Continent. These facilities should be able to satisfy the group's capacity requirements and growth expectations for a number of years and the requirement for further investment in additional or replacement distribution facilities ought to fall away.
During recent years, we have supplemented our distribution network in the UK with a number of service centres with the aim of improving customer service by making product more readily available. This type of investment is particularly helpful for customers who prefer to collect their product needs as opposed to relying on our delivery service.
During the year, we continued to expand the number of service centres we operate across the UK and they now number 27. The provision of a customer collection point is also offered within our distribution centres thereby bringing the number of collection points, or trade counters, in the UK to 42. There are still some locations, where we do not currently have a presence and that would benefit from the opening of a service centre and we anticipate expanding our coverage in the future, subject to the availability of suitable sites.
Acquisitions
We intend to continue to utilise our capital resource to augment the group's organic growth with further acquisitions. We have a history of quickly and successfully integrating small bolt-on acquisitions into our existing structure, achieving overhead synergies and an earnings enhancing performance.
During the year, we completed the acquisition of two small bolt-on businesses one of which, RPS, was transferred into our existing distribution facility in Nottingham and the other, Myttons, has provided us with the opportunity to establish a service centre in Norwich. During January 2015, we added another business, Matty's Wholesale Carpets, and integrated its operations into our distribution facility in Coleshill. Unlike a number of recent acquisitions where the businesses acquired have been losing market position, Matty's Wholesale Carpets has been a very successful business and should prove to be immediately earnings enhancing.
The acquisitions completed during 2013 are now operationally integrated and contributing an earnings enhancing performance to the group's profitability.
Prospects
The momentum created through the final quarter of 2014 has continued into January and February 2015 with 3.1% like for like growth over the two month period.
As we enter March, our UK businesses are well placed to take advantage of improving market conditions with a comprehensive array of product launches and marketing initiatives.
Whilst our businesses in Continental Europe continue to experience difficult markets, we are confident that the Group, overall, will achieve further progress during the year.
Tony Brewer
Group Chief Executive
5 March 2015
Financial Review
Revenue
During the year, group revenue increased by GBP32.2 million to GBP635.2 million. As shown in the table below, UK turnover comfortably outperformed the underlying market which was estimated to have grown by 2.4%. The Continental performance was a story of further contraction, which when translated into sterling amounted to a 7.3% decline during the year albeit when measured in constant currency, the reduction was less severe at 2.2%.
Hot Features
Premium
2014 2013 Change
GBP000 GBP000 GBP000 %
UK 548,393 509,340 39,053 7.7
Continental
Europe 91,606 93,711 (2,105) -2.2
Translation
affect (4,757) - (4,757) -
Group 635,242 603,051 32,191 5.3
-------- -------- -------- -----
The UK growth was attributable to a solid like for like performance amounting to 5.9% during the year coupled with a contribution from acquisitions, which in total amounted to GBP14.9 million of which GBP9.2 million was an incremental increase on the previous year.
Gross margin
The group's gross margin declined during the year from 30.1% to 30.0%. Whilst pricing competition continues to be a factor in all our markets, the characteristics of this competitive environment have not changed appreciably compared with the prior year. Product mix remains broadly constant from one year to the next and the slight decline in the year is more a factor of the Continental European businesses, which collectively enjoy a slightly higher margin compared with the UK, contributing less to the 2014 performance compared with 2013.
Expenses
Distribution and administrative expenses increased by GBP151,000 during the year. However, as illustrated below, when the non-underlying items arising in 2013, relating to the impairment of intangible and tangible fixed assets, which totalled GBP5,352,000, are added back, the year on year increase amounts to GBP5,503,000 or 3.6%.
GBP000
Expenses for the year ended 31 December
2014 159,078
Expenses for the year ended 31 December
2013 158,927
Less: Non-underlying items (5,352)
Adjusted 2013 expenses 153,575
--------
Year on year increase excluding
non-underlying items 5,503
--------
The two key components of the increase were the incremental expenses arsing because of the acquisitions, which amounted to GBP1,807,000 and a GBP4,438,000 rise in employee costs occurring primarily as a result of performance related incentive awards.
Operating profit
Operating profit for 2014 increased by 13.7% compared with the operating profit for 2013 after adjusting for the non-underlying items. The operating margin for 2014 increased to 5.1% compared with 4.6% achieved in the prior year after adjusting for the non-underlying items.
GBP000
2014 operating profit 31,462
2013 operating profit 22,328
Add back: Non-underlying items 5,352
Adjusted 2013 operating profit 27,680
--------
Year on year operating profit increase
excluding non-underlying items 3,782
--------
Earnings and Dividend
Basic earnings per share for 2014 of 28.6p improved by 16.7% on the underlying basic earnings of 24.5p for 2013. The result was derived from a 14.6% increase in profit before tax augmented by a reduction in the effective tax rate during the year which reduced from 23.25% to 21.5%.
Total dividends paid and proposed for 2014 have increased by 14.4% from 15.3p to 17.5p. Dividend cover remains at just above 1.6 times.
Employee benefits
The liability attaching to employee benefits is as follows:
2014 2013
GBP000 GBP000
Current liabilities 2,933 2,842
Non-current liabilities 18,803 12,780
Total 21,736 15,622
------- -------
The year on year increase in the deficit of GBP6,114,000 represents 39.1% deterioration over the course of twelve months. The key driver behind the change is the escalation of liabilities in both the UK and Swiss defined benefit pension plans which, in both arrangements, have been driven by falling bond yields.
Cash Flow
Net cash flow from operating activities
Net cash flow from operating activities increased during the year by GBP3.2 million from GBP24.0 million to GBP27.2 million with the contributory factors shown in the table below.
GBP000
2013 net cash flow from operating
activity 24,027
Operating profit 3,782
Depreciation 115
Profit on asset disposals 147
Share based payments 404
Working capital (1,274)
Interest paid 88
Taxation (13)
Additional pension contributions (83)
27,193
--------
As can be seen from above, the two principal contributors to the year on year movement are the increase in operating profit of GBP3.8 million and the additional working capital investment of GBP1.3 million.
During the year, the additional pension contributions, which fund the UK defined benefit pension plan, amounted to GBP3.0 million. Following the triennial actuarial valuation of the UK plan at 31 March 2014, the additional contributions for 2015 will be GBP3.0 million but for 2016 they will fall to GBP2.1 million and thereafter, increase annually at a rate of 3.3% until further review as part of the triennial valuation in 2017.
Cash flows from investing and financing activities
The table below summarises the cash flow movements from investing and financing activities during the year. Whilst the overall cash outflow from the activities was broadly the same in 2013 and 2014, the difference amounting to GBP0.5 million, the emphasis in the two years was quiet different. During the year, investing activity was considerably reduced compared with 2013 giving rise to a positive cash flow variance of GBP9.1 million. However, financing activity centred on the reduction of borrowings giving rise to an increased cash outflow of GBP9.6 million.
GBP000
2013 cash flows from investing
activity (14,149)
2013 cash flows from financing
activity (12,280)
---------
(26,429)
Movement in investing activity:
Net investment in tangible
fixed assets 7,212
Interest received 233
Acquisitions 1,643
---------
9,088
Movement in financing activity:
Treasury share issues 785
Repayment of borrowings (9,987)
Dividends paid (389)
---------
(9,591)
Net movement (503)
2014 cash flows from investing
activity (5,061)
2014 cash flows from financing
activity (21,871)
(26,932)
---------
In isolation, 2014 is an illustration of the group's capacity to reduce its requirement for debt as the need for investment in large capital projects comes to the end of its current cycle.
Net debt
Group net funds at the end of the year increased by GBP10.5 million compared with the previous year, from GBP14.0 million to GBP24.5 million, as detailed in the table below.
At
At 1 January Foreign 31 December
2014 Cash exchange 2014
GBP000 flows Translation GBP000
GBP000 GBP000
-------------------------- --------------- --------- -------------- -------------
Cash at bank and in hand 47,477 261 (149) 47,589
-------------------------- --------------- --------- -------------- -------------
Debt due within one year (218) - 14 (204)
-------------------------- --------------- --------- -------------- -------------
Debt due after one year (33,239) 10,210 211 (22,818)
-------------------------- --------------- --------- -------------- -------------
14,020 10,471 76 24,567
-------------------------- --------------- --------- -------------- -------------
Funding and going concern
The group maintains sufficient banking facilities to fund its operations and investments and, as at 31 December 2014, the utilisation of the group's total facilities was as shown in the table below. 73.2% of the group's facilities were undrawn.
Total
Drawn Undrawn facility
GBP000 GBP000 GBP000
---------------------------------------- --------- ---------- ----------
Less than one year - 42,883 42,883
---------------------------------------- --------- ---------- ----------
Over one year and less than five years 21,019 20,000 41,019
---------------------------------------- --------- ---------- ----------
Over five and less than seven years 2,003 - 2,003
---------------------------------------- --------- ---------- ----------
23,022 62,883 85,905
---------------------------------------- --------- ---------- ----------
Having reviewed the group's resources and a range of likely out-turns, the directors believe there are reasonable grounds for stating that the group has adequate resources to continue in operational existence for the foreseeable future and it is appropriate to adopt the going concern basis in preparing the group's financial accounts.
Steve Wilson
Group Finance Director
5 March 2015
Consolidated Income Statement
for the year ended 31 December 2014
Non-underlying
Items
Underlying * Total
2014 2013 2013 2013
GBP000 GBP000 GBP000 GBP000
Revenue 1 635,242 603,051 - 603,051
Cost of sales (444,702) (421,796) - (421,796)
---------------------------------- ---------- ------------- --------------- ----------
Gross profit 190,540 181,255 - 181,255
Distribution expenses (117,458) (115,067) - (115,067)
Administrative expenses (41,620) (38,508) (5,352) (43,860)
---------------------------------- ---------- ------------- --------------- ----------
Operating profit 1 31,462 27,680 (5,352) 22,328
Finance income 819 629 - 629
Finance expenses (1,981) (1,870) - (1,870)
---------------------------------- ---------- ------------- --------------- ----------
Net finance costs (1,162) (1,241) - (1,241)
---------------------------------- ---------- ------------- --------------- ----------
Profit before tax 30,300 26,439 (5,352) 21,087
Taxation (6,515) (6,146) - (6,146)
---------------------------------- ---------- ------------- --------------- ----------
Profit for the year attributable
to the equity shareholders 23,785 20,293 (5,352) 14,941
---------------------------------- ---------- ------------- --------------- ----------
Dividend paid per share 3 15.30p 14.85p
Earnings per share
Basic 2 28.6p 24.5p - 18.0p
---------------------------------- ---------- ------------- --------------- ----------
Diluted 2 28.5p 24.3p - 17.9p
---------------------------------- ---------- ------------- --------------- ----------
* Included within administrative expenses in the results for the year ended 31 December 2013 are non-underlying items that relate to the impairment of intangible and tangible fixed assets, totalling GBP5,352,000.
All group operations during the financial years were continuing operations.
Consolidated Statement of Comprehensive Income
for the year ended 31 December 2014
2014 2013
GBP000 GBP000
Profit for the year attributable to the equity
shareholders 23,785 14,941
Other comprehensive income:
Items that will never be reclassified to profit
or loss
Remeasurement of defined benefit plans (8,900) 450
Related tax 1,789 (529)
---------------------------------------------------- --------- ---------
(7,111) (79)
Items that are or may be reclassified to profit
or loss
Foreign exchange translation differences arising
on translation of overseas operations (742) 397
Effective portion of changes in fair value of
cash flow hedges (177) 115
Transfers to profit or loss on cash flow hedges 132 137
Related tax 18 (65)
---------------------------------------------------- --------- ---------
(769) 584
--------------------------------------------------- --------- ---------
Other comprehensive (expense)/income for the
year (7,880) 505
Total comprehensive income attributable to the
equity shareholders for the year 15,905 15,446
Statements of Financial Position
at 31 December 2014
2014 2013
Note GBP000 GBP000
Assets
Non-current assets
Property, plant and equipment 103,461 103,079
Intangible assets 10,013 10,013
Deferred tax assets 2,726 2,388
116,200 115,480
Current assets
Inventories 116,569 115,678
Trade and other receivables 118,816 119,488
Cash and cash equivalents 47,589 47,477
282,974 282,643
Total assets 1 399,174 398,123
------------------------------------------------ ------- ---------- ------------
Liabilities
Current liabilities
Other interest-bearing loans and borrowings (204) (218)
Trade and other payables (166,266) (164,519)
Employee benefits (2,933) (2,842)
Income tax payable (6,073) (7,022)
(175,476) (174,601)
Non-current liabilities
Other interest-bearing loans and borrowings (22,818) (33,239)
Employee benefits (18,803) (12,780)
(41,621) (46,019)
------------------------------------------------ ------- ---------- ------------
Total liabilities 1 (217,097) (220,620)
Net assets 182,077 177,503
------------------------------------------------ ------- ---------- ------------
Equity attributable to equity
holders
of the parent
Share capital 4,268 4,268
Share premium 53,512 53,512
Other reserves (1,786) (4,742)
Retained earnings 126,083 124,465
-------------------------------- ------------------------ ---------- ----------
Total equity 182,077 177,503
-------------------------------- ------------------------ ---------- ----------
These financial statements were approved by the board of directors on 5 March 2015 and were signed on its behalf by:
Tony Brewer Steve Wilson Director Director
Company Number: 460129
Statement of Changes in Equity
for the year ended 31 December 2014
Capital Cash
Share Share redemption Translation flow Treasury Retained Total
capital premium reserve reserve hedging reserve earnings equity
GBP000 GBP000 GBP000 GBP000 reserve GBP000 GBP000 GBP000
GBP000
Balance at
1 January
2013 4,268 53,512 88 5,768 (339) (11,329) 121,361 173,329
Profit for the
year
attributable
to the equity
shareholders - - - - - - 14,941 14,941
Other
comprehensive
income - - - 397 252 - (144) 505
--------------- ---------- ---------- ------------ ------------- --------- ----------- ----------- -----------
Total
comprehensive
income for
the
year - - - 397 252 - 14,797 15,446
--------------- ---------- ---------- ------------ ------------- --------- ----------- ----------- -----------
Transactions
with equity
shareholders,
recorded
directly
in equity
Share-based
payments - - - - - - 288 288
Share options
exercised by
employees - - - - - 421 (178) 243
Deferred tax
on share
options - - - - - - 497 497
Dividends to
equity
holders - - - - - - (12,300) (12,300)
--------------- ---------- ---------- ------------ ------------- --------- ----------- ----------- -----------
Total
contributions
by and
distributions
to equity
shareholders - - - - - 421 (11,693) (11,272)
--------------- ---------- ---------- ------------ ------------- --------- ----------- ----------- -----------
Balance at
31 December
2013 4,268 53,512 88 6,165 (87) (10,908) 124,465 177,503
--------------- ---------- ---------- ------------ ------------- --------- ----------- ----------- -----------
Balance at
1 January
2014 4,268 53,512 88 6,165 (87) (10,908) 124,465 177,503
Profit for the
year
attributable
to the equity
shareholders - - - - - - 23,785 23,785
Other
comprehensive
income - - - (742) (45) - (7,093) (7,880)
--------------- ---------- ---------- ------------ ------------- --------- ----------- ----------- -----------
Total
comprehensive
income for
the
year - - - (742) (45) - 16,692 15,905
--------------- ---------- ---------- ------------ ------------- --------- ----------- ----------- -----------
Transactions
with equity
shareholders,
recorded
directly
in equity
Share-based
payments - - - - - - 692 692
Share options
exercised by
employees - - - - - 3,808 (2,780) 1,028
Current tax on
share options - - - - - - 183 183
Deferred tax
on share
options - - - - - - (545) (545)
Dividends to
equity
holders - - - - - - (12,689) (12,689)
--------------- ---------- ---------- ------------ ------------- --------- ----------- ----------- -----------
Total
contributions
by and
distributions
to equity
shareholders - - - - - 3,808 (15,139) (11,331)
--------------- ---------- ---------- ------------ ------------- --------- ----------- ----------- -----------
Balance at
31 December
2014 4,268 53,512 88 5,423 (132) (7,100) 126,018 182,077
--------------- ---------- ---------- ------------ ------------- --------- ----------- ----------- -----------
Cash Flow Statements
for the year ended 31 December 2014
2014 2013
GBP000 GBP000
Cash flows from operating activities
Profit before tax for the year 30,300 21,087
Adjustments for:
Depreciation, amortisation and impairment 4,900 10,136
Finance income (819) (629)
Finance expense 1,981 1,870
Profit on sale of property, plant and
equipment (30) (177)
Share-based payments 692 288
Operating cash flows before changes
in working
capital and other payables 37,024 32,575
Change in inventories (1,514) 1,967
Change in trade and other receivables (143) (9,114)
Change in trade and other payables 2,656 9,421
Cash generated from the operations 38,023 34,849
Interest paid (1,477) (1,565)
Tax paid (6,357) (6,344)
Additional contributions to defined
benefit plan (2,996) (2,913)
Net cash flow from operating activities 27,193 24,027
----------------------------------------------- -------------- --------- ---------
Cash flows from investing activities
Proceeds from sale of property, plant
and equipment 92 479
Interest received 846 613
Acquisition of subsidiaries, net of
cash acquired (331) (1,974)
Acquisition of property, plant and equipment (5,668) (13,267)
Net cash flow from investing activities (5,061) (14,149)
----------------------------------------------- -------------- --------- ---------
Cash flows from financing activities
Proceeds from the issue of treasury
shares 1,028 243
Repayment of borrowings (10,210) (223)
Dividends paid (12,689) (12,300)
Net cash flow from financing activities (21,871) (12,280)
----------------------------------------------- -------------- --------- ---------
Net increase/(decrease) in cash and
cash equivalents 261 (2,402)
Cash and cash equivalents at 1 January 47,477 49,798
Effect of exchange rate fluctuations
on cash held (149) 81
Cash and cash equivalents at 31 December 47,589 47,477
----------------------------------------------- -------------- --------- ---------
Notes
1 Segment reporting
The group has 55 operating segments in the UK and 5 operating segments in Continental Europe. Each segment represents an individual trading operation, and each operation is wholly aligned to the sales, marketing, supply and distribution of floorcovering products. The operating results of each operation are regularly reviewed by the Chief Operating Decision Maker, which is deemed to be the Group Chief Executive. Discrete financial information is available for each segment and used by the Group Chief Executive to assess performance and decide on resource allocation.
The operating segments have been aggregated to the extent that they have similar economic characteristics, with relevance to products and services, type and class of customer, methods of sale and distribution and the regulatory environment in which they operate. The group's internal management structure and financial reporting systems differentiate the operating segments on the basis of the differing economic characteristics in the UK and Continental Europe and accordingly present these as two separate reportable segments. This distinction is embedded in the construction of operating reports reviewed by the Group Chief Executive, the board and the executive management team and forms the basis for the presentation of operating segment information given below.
UK Continental Total
Europe
2014 2013 2014 2013 2014 2013
GBP000 GBP000 GBP000 GBP000 GBP000 GBP000
Revenue
External revenues 548,393 509,340 86,849 93,711 635,242 603,051
-------------------- ---------- ---------- --------- --------- ---------- ----------
Reportable segment
operating profit 30,695 26,877 1,183 1,678 31,878 28,555
-------------------- ---------- ---------- --------- --------- ---------- ----------
Reportable segment
assets 256,274 233,913 34,444 35,708 290,718 269,621
Reportable segment
liabilities (151,566) (148,457) (14,568) (15,975) (166,134) (164,432)
-------------------- ---------- ---------- --------- --------- ---------- ----------
During the year there are no inter-segment revenues for the reportable segments (2013: GBPnil).
Reconciliations of reportable segment profit, assets and liabilities and other material items:
2014 2013
GBP000 GBP000
Profit for the year
Total profit for reportable segments 31,878 28,555
Impairment of intangibles and
assets - (5,352)
Unallocated expense (416) (875)
------------------------------------------------------------------------------- -------- ----------
Operating profit 31,462 22,328
Finance income 819 629
Finance expense (1,981) (1,870)
------------------------------------------------------------------------------- -------- ----------
Profit before taxation 30,300 21,087
Taxation (6,515) (6,146)
------------------------------------------------------------------------------- -------- ----------
Profit for the year 23,785 14,941
------------------------------------------------------------------------------- -------- ----------
Notes continued
1 Segment reporting - continued
2014 2013
GBP000 GBP000
Assets
Total assets for reportable
segments 290,718 269,621
Unallocated assets:
Properties, plant and
equipment 91,493 93,883
Deferred tax assets 2,726 2,388
Cash and cash
equivalents 14,237 32,231
Total assets 399,174 398,123
------------------------- ---------- --------- ------------ ------ --------------- --------------
Liabilities
Total liabilities for reportable
segments (166,134) (164,432)
Unallocated liabilities:
Employee benefits (21,736) (15,622)
Other interest-bearing loans and
borrowings (23,022) (33,457)
Income tax payable (6,073) (7,022)
Derivative liabilities (132) (87)
Total liabilities (217,097) (220,620)
------------------------- ---------- --------- ------------ ------ --------------- --------------
Reportable
Continental segment Consolidated
UK Europe total Unallocated total
GBP000 GBP000 GBP000 GBP000 GBP000
Other material items
2014
Capital expenditure 2,586 421 3,007 2,661 5,668
Depreciation 2,260 567 2,827 1,998 4,825
Amortisation - - - 75 75
Other material items
2013
Capital expenditure 3,043 649 3,692 9,847 13,539
Depreciation 2,171 666 2,837 1,797 4,634
Amortisation - - - 150 150
Impairment of assets - - - 2,155 2,155
Impairment of intangible
assets - - - 3,197 3,197
-----------
In the UK the group's freehold properties are held within Headlam Group plc and a rent is charged to the operating segments for the period of use. Therefore the operating reports reviewed by the Group Chief Executive show all the UK properties as unallocated and the operating segments report a segment result that includes a property rent. This is reflected in the above disclosure.
Each segment is a continuing operation.
The Group Chief Executive, the board and the senior executive management team have access to information that provides details on revenue by principal product group for the two reportable segments, as set out in the following table:
Notes continued
1 Segment reporting - continued
Revenue by principal product group and geographic origin is summarised below:
UK Continental Total
Europe
2014 2013 2014 2013 2014 2013
GBP000 GBP000 GBP000 GBP000 GBP000 GBP000
Revenue
Residential 378,910 350,020 43,415 47,608 422,325 397,628
Commercial 169,483 159,320 43,434 46,103 212,917 205,423
------------- -------- -------- -------- -------- -------- --------
548,393 509,340 86,849 93,711 635,242 603,051
------------- -------- -------- -------- -------- -------- --------
2 Earnings per share
2014 2013
GBP000 GBP000
Earnings
Earnings per underlying basic and underlying
diluted earnings per share 23,785 20,293
Earnings for basic and diluted earnings per
share 23,785 14,941
------------------------------------------------- ------------- -------------
2014 2013
Number of shares
Issued ordinary shares at 31 December 85,363,743 85,363,743
Effect of shares held in treasury (2,053,036) (2,383,937)
Weighted average number of ordinary shares
for the purposes of basic earnings per share 83,310,707 82,979,806
------------------------------------------------- ------------- -------------
Effect of diluted potential ordinary shares:
Weighted average number of ordinary shares
at 31 December 83,310,707 82,979,806
Dilutive effect of share options 264,178 646,209
Weighted average number of ordinary shares
for the purposes of diluted earnings per share 83,574,885 83,626,015
------------------------------------------------- ------------- -------------
Notes continued
3 Dividends
2014 2013
GBP000 GBP000
Interim dividend for 2013 of 4.65p paid 2 3,856 -
January 2014
Final dividend for 2013 of 10.65p paid 1 July 8,833 -
2014
Interim dividend for 2012 of 4.65p paid 2
January 2013 - 3,850
Final dividend for 2012 of 10.20p paid 1 July
2013 - 8,450
12,689 12,300
----------------------------------------------- -------- --------
The final proposed dividend of 12.30p per share (2013: 10.65p per share) will not be provided for until authorised by shareholders at the forthcoming AGM. There are no income tax consequences.
Interim dividends of 5.20p per share (2013: 4.65p per share) are provided for when the dividend is paid. The dividend was paid on 2 January 2015 and totalled GBP4,355,000.
The total value of dividends proposed but not recognised at 31 December 2014 is GBP14,655,000 (2013: GBP12,689,000).
4. Additional information
The financial information set out above does not constitute the company's statutory accounts for the years ended 31 December 2014 or 2013 but is derived from those accounts. Statutory accounts for 2013 have been delivered to the registrar of companies, and those for 2014 will be delivered in due course. The auditors have reported on those accounts; their reports were (i) unqualified, (ii) did not include a reference to any matters to which the auditors drew attention by way of emphasis without qualifying their report and (iii) did not contain a statement under section 498 (2) or (3) of the Companies Act 2006.
We anticipate that the company's statutory accounts will be posted to shareholders during April 2015 and will be displayed on the company's website at www.headlam.com early April 2015. Copies of the statutory accounts will also be available from the company's registered office at Headlam Group plc, PO Box 1, Gorsey Lane, Coleshill, Birmingham, B46 1LW.
This preliminary announcement of results for the year ended 31 December 2014 was approved by the board on
5 March 2015.
This information is provided by RNS
The company news service from the London Stock Exchange
END
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