Headlam Share Discussion Threads

[jimmywilson612] 06/3/2018 08:48

Good results - the worry is as stated January/Feb 2018. Can't imagine the recent cold spell has helped.

I'm invested here but will wait till adding to my holding as I think the share might go lower.

PE less than 10 which is fantastic long term buy for a well run business and Continental Europe offers the growth. £35M cash in the bank makes it even stronger.

No special dividend due to opening up the £25M distribution centre seems sensible.

[my retirement fund] 06/3/2018 08:44

I dont think this is the bottom yet.

[kevph] 06/3/2018 08:39

Bang on expectations though top and bottom line. If the UK deteriorates any further it'll be interesting to see how much Europe can soak up

[essentialinvestor] 06/3/2018 08:20

Marked deterioration in recent UK l4l.

[essential] 06/3/2018 08:10

Nibbled some more on this weakness..

[walbrock82] 18/1/2018 19:14

Headlam Group results showed a drastic slowdown in the UK with LFL growth of 0.5% vs. Europe’s 4.2%. This is a sharp reversal in UK growth of 4.7%. But management is optimistic about the future and says earnings are in-line with expectations.

I think the recent acquisition in Domus will help plug any earnings shortfall in 2018.
Overall, I think Headlam is a progressive dividend payer and a much better business to hold in your investment portfolio than Carpetright, Topps Tiles and United Carpet Group.

The phrase “Europe biggest floorcovering distributor” tells you it is a simple business to understand.
For further details on Headlam, click

[kevph] 10/1/2018 20:08

Curious as to why. It's a decent sized company so surprised as well

[deadly] 10/1/2018 16:32

very volatile these last few days; 7% swings and over 1m shares traded today.

[essentialinvestor] 08/1/2018 13:29

May be a valid observation, however they also supply laminates etc,
I can't remember the differential % breakdowns without checking.

[eeza] 07/1/2018 20:33

Underfloor heating becoming more popular. No carpets in my house - all stone or brick, conducts heat better - never needs replacing. Nice and warm in winter and nice and cool in summer.

[essentialinvestor] 10/12/2017 08:04

What's positive is an increasing focus on margin improvement,
driven by efficiency savings.

That bodes well for the longer term IMV.

[rhomboid] 10/12/2017 07:50

Thanks Thorpematt
All good points, but with Headlam as a wholesaler it’s more important to understand what the average cost including fitting is to consumer surey? and that is v much into the mid to high hundreds for single rooms or thousands for larger areas. That makes it v much in the deferral category when the consumer sector is feeling the cosh. I think Headlam will prosper but I’m now 2/3 non U.K. and looking to increase that % as and where I can so for me HEAD is a watchlist only candidate pending elections

[thorpematt] 08/12/2017 22:33

Doom and Gloom I see. Probably time to buy I suppose?

On cyclicality:

HEAD is a bout 2/3 residential and 1/3 commerical.

Commercial floors tend to be either via a necessity (worn out, trip -hazard!)/ planned RMI, or part of a wider re-furbs and new builds and thus a "non-discretionary" by default ...but still cyclical with tie-in to construction.

Residential is of course linked to housing starts* or moves, but also simple discretion by nature. BUT interstingly the residential spend on flooring is remarkably low by average as indicated by the following quote from 2016 Annual Report:-

"... the Company's average order cut value for residential carpet and residential vinyl was 127.44 and 68.03 respectively in 2016, representing a more affordable purchase than other RMI (Repair, Maintenance & Improvement) expenditure. "

... making it slightly less of a "budget issue" than one might imagine.


Also interesting is that the (UK) LFL fall in latest TS was mainly attribritable to commercial (-2.6%):-

"While the first half of 2017 delivered total revenue growth of 4.0%, the first four months of the second half was characterised by weaker markets as evidenced by modest revenue growth of 1.5% (0.6% in constant currency). In this four-month period, UK like-for-like revenue decreased 1.1%, with the commercial sector declining by 2.6% and the residential sector marginally down by 0.4%. Continental Europe, however, saw more robust growth with like-for-like revenue* growth of 6.6%, and the residential sector increasing by 11.3%. "

*I would also note that I'd perceive that housing starts (new builds) are likely to fit into the commercicial distribution network not the residential.

[essentialinvestor] 07/12/2017 19:18

Also on second reading the defered consideration element is modest imv,
would have preferred a larger % payable dependent of future financial targets.

[rhomboid] 07/12/2017 18:55

🙂point taken but I guess it depends on how much like Venezuela the UK becomes

[essentialinvestor] 07/12/2017 18:52

.. Headlam will survive .. thanks for those reassuring words ).

It's a cyclical industry, they stayed robustly profitable during the financial
crisis, so would also hope survival is on the cards.

My main concern, some of us will remember what happened last time Headlam decided
to diversify from their core market... that did not progress as planned, understatement!.
This acquisition is closer to their current offering than last time around.

I'm not filled with confidence about this one either, hopefully wrong on that.

My concern is this business may be more cyclical than their existing products,
and they are acquiring in very benign conditions, towards peak cycle.

How the profitability of the new business looks over the next 18 months
will be interesting.

[rhomboid] 07/12/2017 18:39

I agree re Domus acquisition, it looks a great fit at an attractive price however the reason I sold a while back is floor coverings are the epitome of discretionary spend, nobody replaces a carpet when it’s worn out , they always do it as either part of a new property purchase or a ‘feeling flush lets splash out’ refurb. If we have consumers reigning in expenditure Headlam will survive..but suffer imho

[blueflex2] 07/12/2017 10:11

Good acquisition especially on commercial sector

[jeffian] 07/12/2017 08:28

Crikey! That would be setting their sights a bit high, wouldn't it?!

[runthejoules] 07/12/2017 07:46

God acquiisition?

[3rd eye] 05/10/2017 17:29

Robbie Burns comment......

Headlam (HEAD) was suggested at the follow up seminar. This floor coverings outfit looks pretty cheap.

Profits are rising and a great dividend of more than 5%. With the market at highs looks like a safeish choice as a tuckaway with potential for good capital growth maybe back up to near highs of 700p.

I managed to buy them at the then sell price live at the seminar. It's hard to find value as we sit near highs but there may be some here. The spread is the only issue and that's why I bought it on direct access.

[sphere25] 05/10/2017 17:13

Yes, tipped by Naked Trader - looking for about £7.

Chart is winding itself up for one of those vicious spikes higher also. Very illiquid this one, nightmare to buy in size when it starts shifting.

[standish11] 05/10/2017 17:01

Breakout may have attracted Robbie Burns' attention as he has bought in per his latest bulletin. I