Headlam Share Discussion Threads

[hawaly] 24/8/2017 15:36

Strong move up on - breakout.

[the big fella] 22/8/2017 14:50

I agree. These look decent value at this level. I reckon we will be north of £7 by the next figures.

[thorpematt] 21/8/2017 08:21

Yes the profitability surprised me to the upside. Of course most of the earnings are 2nd half weighted but it certainly augers well.

LFL sales UK and europe were tidier than I had expected or what most others are reporting (flat at best).

I think the forecast EPS growth is fairly modest here and whilst I am not necessarily expecting HEAD to out-perform these significantly I do think that the continuation of strong dividends is significant in terms of measuring shareholder returns. HEAD is something of a cash machine really with some steady growth tied in.

Future growth via acquisitions (no dilution) and increase in treade counters looks likely IMO. Nice time to buy in / top on the chart I'd say.

[hawaly] 21/8/2017 07:20

Encouraging comments.

[sphere25] 19/7/2017 14:23

Chart has turned up nicely now.

Another quiet board - bodes well :-D

[thorpematt] 18/7/2017 19:25

Positive update for sure. Certainly not seeing much cause for concern. The margin growth is welcome too especially as it is driven by lowering of costs which is always preferable to price hikes.

The share price has lost momentum of late but in turn the value has grown and I do think companies of this quality are hard to find at these prices.

This company does not dilute stock for acquistions etc. historically (rare these days). Despite this, there is quite a bit of net cash. This gives rise to the possibility of additional acquisitions to fire growth, or a return to shareholders to supplement the already hefty yield.

[sphere25] 18/7/2017 10:25

AGM update:
"Total revenue for the first four months of the year to 30 April 2017 was GBP221.2 million, up 2.2% compared with the same period in the prior year"

Todays update:
"Total revenue for the six months ended 30 June 2017 increased by 4.0% to GBP341.9 million compared with the same period in the prior year"

There are variations in sectors, but this bump up in growth (as well as meeting forecasts) isn't consistent with the stock having fallen away significantly from its highs.

Plenty of 50k buys hitting the book at 560p, chart turning up and a nice near 5% yield for holders here whilst the stock recovers some of its losses so I've bought.

Time to start buying and stop selling you institutional fund manglers.

[rhomboid] 20/6/2017 09:01

Good post Matt
I agree with all you say but sold out recently as I cannot see how they and their customers can avoid being impacted by any future consumer spending weakness. I'm sure they'll be resilient and acquiring bolt on businesses will help but imho headwinds are increasingly strong

[thorpematt] 19/6/2017 23:07

Well absolutely a different league indeed. I also see them as FAR less consumer/ retail facing. A recent TS highlighted the ease at which price hikes were passed on to its clinets (indicating good pricing power).

From the perspective of value here I see a company with an EV of circa £400 eith PBT abilities of around £40/ yr. I see those valuation s on stocks with flat growth prospects only. Adding into the mix that it does grow (EPS) and adding in further that its yield is generous and has been for a while leads us on to look at its cover (not that tidy)...but not at all at risk because the simplicity of the business dicates that cap-ex is always pretty low and that caash conversion is from operating to FCV is again very good - hence WHY we have historic growth, good yield AND no debt.

All of that above is a good sign of a quality company.


Recently the broker forecasts have been cut to a level which is closer to those predicted at the start of the year and I think it this which dictates that the Market must price this as a stock with moderate growth valuations for PER etc. The previous 3 years have seen EPS growth in the teens % wise. The next 2 have rather moderate predictions and this of course effects PEG and other ration upon which growth investors in particular base decisions. What I believe we have seen the last few days is some churn with respect o the investor-base.


Personally I have been buying stock this week since I think, as explained above, that this is a very good company with good mid- long term prospects, nice yield at a very reasonable price.

[essentialinvestor] 19/6/2017 12:49

My own take fwiw is Headlam is in a different quality league to DFS.

[essentialinvestor] 19/6/2017 10:32

As any long term holders know only to well Headlam is a cyclical business.

[jeffian] 19/6/2017 10:23

I think it's probably a read-across from the DFS profit warning last week -

"The trading environment has however recently weakened beyond our expectation, with significant declines in store footfall leading to a material reduction in customer orders. We believe these demand effects are market-wide, in line with industry indicators, and are linked to customer uncertainty regarding the general election and the uncertain macroeconomic environment."

[essentialinvestor] 19/6/2017 10:07

Cycle turning?

[essentialinvestor] 19/6/2017 09:12

Support ebbing away atm.

[jimmywilson612] 01/6/2017 17:11

Nice timing by me buying the day before the announcement :(

[martinthebrave] 01/6/2017 11:20

Topped up on recent weakness.

[effortless cool] 01/6/2017 10:31

Top line growth for the first four months of 2017 per the latest update was slightly disappointing, hence the fall.

I consider this an excellent business, however, and it is starting to look like very good value at these levels.

[jeffian] 01/6/2017 10:28

True, but the final is 15.85p, the 'special' is 8p............but we're 65.5p down on the month, 52.5p of which was in the last week!

[joonas] 01/6/2017 10:09

Ex dividend today

[jeffian] 01/6/2017 10:06

Is this profit-taking or has something spooked the market?

[jeffian] 13/5/2017 19:25

I have quite a lot of Headlam shares and have held for ages. I intend to hold on. I'm not particularly worried about it as Headlam's business isn't financially complex. I just thought it was interesting to pick someone with a bit of a cloud over his CV rather than someone with a clean bill of health (particularly as the Headlam business model includes growth by acquisition of small independent carpet distributor - just the accounting area that tripped up Mitie!).

[pugugly] 13/5/2017 18:11

jeffian: Thanks for above info - Market reaction was interesting - has been a long term hold but only recently started to out perform - will have to have another look especially if City start to associate with Mitie problems.

[jeffian] 12/5/2017 22:48

"Finance Director for Mitie's technical services division - led the financial integration of the Dalkia FM acquisition"

Still Hmmmmm!


"Investors such as Mr Steer say that they were sceptical about the way in which Mitie accounted for goodwill associated with its acquired businesses.....

....distrust of Mitie’s accounting was widespread in the City....

.....Investors such as Mr Steer say that they were sceptical about the way in which Mitie accounted for goodwill associated with its acquired businesses"

[effortless cool] 12/5/2017 21:36

jeffian,

I had the same thought. At least he seems not to have been involved with the two divisions mentioned in that article.

From his linkedin:

"Led the commercial, financial and legal function for Mitie's decentralised energy solutions division. Also Chairman of Mitie's pension governance committee".

"Finance Director for Mitie's technical services division - led the financial integration of the Dalkia FM acquisition increasing Divisional revenue to over £500m".