Headlam Share Discussion Threads

[northerngrowler] 27/7/2023 15:29

I can never see them disappearing but I think the days of Headlam being easily the market leader in flooring distribution is seriously under threat. They have continued their consolidation of resources over the last few years and are rolling out more currently so that will help.

However traditional retailers seem very unhappy - the trade counters are open to anyone and Headlam are selling at the same price to all. The smaller to mid sized commercial flooring contractors seem unhappy as Headlam are selling direct to any trade plus end users (councils, main contract builders, etc). It maybe a a recipe for disaster or triumph but time will tell.

The strategy is all in the AGM report and is being rolled out now in a fairly serious way but I do not think they expected the ferocity of the backlash from their existing customers who do have viable alternatives to turn to (Likewise, Trade Choice, Kellars, etc).

[elsa7878] 27/7/2023 14:42

With its freehold properties and huge inventory that dwarfs the market cap it looks bullet proof unless as you suggest their traditional customers are leaving. Why would they be unhappy?

[northerngrowler] 27/7/2023 11:20

Hi - for Headlam the trade counter push and other direct selling to builders and large retailers has to work otherwise I think there will be a rocky road ahead for them, as my anecdotal evidence shows their traditional customer base are leaving them in droves due to this strategy. There are a lot of unhappy Headlam customers out there........

[thelongandtheshortandthetall] 27/7/2023 10:17

Hi Jffian.
Yes I think lots of people did that.

It's actually not as bad an update as it first appears, IMO.
hence why I bought. They'll emerge from the current malaise in a very strong position.
The trade counter push is akin to howdens business strategy.
You have to go back to 2009 to find the share price at todays level - I'll say it's over sold.

Onward and upward.

[jeffian] 27/7/2023 10:07

Ah! Thanks for that. When I read it, I missed the word "cover".

[thelongandtheshortandthetall] 27/7/2023 08:28

'the Company intends to temporarily lower its dividend cover in respect of the ordinary dividend payment for FY23 to that of pre COVID levels.'

I read this as dividend maintained.
Bought a couple at 199p

[johndoe23] 27/7/2023 07:29

Yep, profit warning.

[catabrit] 27/7/2023 07:27

Oh dear. This could get quite ugly when the market opens.

[essentialinvestor] 13/7/2023 13:41

Has the new CFO bought a single share yet?.

[creditcrunchies] 07/6/2023 19:41

Agree the UK is probably the fraud capital of Europe you openly commit fraud in the knowledge the banks will do nothing, same with law enforcement. I got scammed by a builder you'll find when you mention it pretty much everybody else has had the same experience. They all know it's very easy to get away with it. The banks aren't letting on how much fraud is going on they just tell you to FO and speak to a charity then tell the markets it's only a tiny figure.

[my retirement fund] 31/5/2023 12:43

Inflation will only fall to a sensible level in the UK now when unemployment begins to rise properly. The UK is uniquely placed with high employment and a significant lack of capacity and productivity.

[jeffian] 30/5/2023 14:42

I couldn't agree more. Carney was bad enough with his showboating and love of the limelight but Andrew Bailey has been a disaster in every possible way, not only getting every decision wrong, as you say, but also compounding problems by issuing inappropriate statements, apparently completely unaware of their impact on the markets. How he's still there, I do not know. Oh for the days of Mervyn King and Steady Eddy George.

[1tx] 30/5/2023 13:39

You are correct of course CT;but Andrew Bailey who turned FCA into "Fraud Central" missing everything from Woodford downwards has seemingly got everything wrong at BofE in particular his massive money printing before & in particular during Covid lockdowns & claiming this would not cause inflation which of course it did,in particular massive price inflation of house prices & other assets.Now he increases interest rates just as inflation starts to fall & risks killing off any growth in the economy which was just starting to happen.

[castleford tiger] 30/5/2023 11:02

I still feel the bank have this SO wrong.
They will push us too far only to reverse when people start getting bigger mortgage rates in.
We need time to see Energy prices actually fall.

Inflation having fallen 2% last month is going down fast now.

Rate rises now are dangerous.

tiger

[essentialinvestor] 28/5/2023 12:27

What's become apparent over the last week is expectations on where UK rates will peak and subsequently start to fall have been incorrect. This has a bearing on the sector.

[castleford tiger] 28/5/2023 11:35

Can Like survive because if it goes it would be an easy pick up for HEAD ?

[1tx] 26/5/2023 16:52

Likewise doubled its turnover last year to a bit over £120m;about one firth of HEADs however I think most of its increase came from buying other existing businesses,although in fairness it is also building & improving its distribution centres.I feel HEAD is the better & stronger business and is more obviously cheaper share price wise but I would not be surprised if retailers were comparing one against the other & pushing both for the best prices.

[rimmy2000] 26/5/2023 16:35

why that Chris Payne, CEO owns so few shares and is not buying at these levels

[essentialinvestor] 26/5/2023 16:02

CT would be surprised if impacting, but as I don't work in the industry ..

Not holding atm but on a watchlist, macro clouds for the UK economy look
to be gathering for H2 and in to next year. It now looks like rates may
be higher and for longer than recent consensus foresaw.

[castleford tiger] 26/5/2023 15:34

I am a holder and i bought more today.

Not been mentioned but could the movement of some top management and their teams to a new competitor be starting to bite? (LIKEWISE)

Tiger

[elsa7878] 26/5/2023 15:08

£150 million of freeholds, £140 million of inventories and a market cap of £200 million. Don't worry about the balance sheet.

[1tx] 26/5/2023 10:04

The reasons for the fall in net cash was special dividend,cost approx £15m.A £15m share buy back programme which was carried out,£10m in 2022, or provided for £5m during 2022 financial year;a fall in trade liabilities of around £30m,spending on property & plant also increased.The surplus cash had built up over a number of years but was also increased by the reduction in dividends in 2021 as in line with most other companies the dividend was cut during Covid period.

Property values for the type of modern warehouse buildings that in the main comprise Headlams property remain strong.

In my opinion the shares are inexpensive & the company is not in need of additional capital to support its present or likely future plans.It has bought out businesses over the years including one this year but they have been paid for out of cash flow.Obviously the shares could become more inexpensive!!!

[arthur_lame_stocks] 25/5/2023 22:30

The cash position doesn't concern me altogether, there was a large adverse movement in working capital, mainly from paying their creditors as well as money spent on the share buyback and I think a special dividend.

I guess the dividend could be under threat if trading is particularly poor this year but I think the company is strong enough to survive a downturn in trading ok.

The thing that has piqued my interest in these shares again is that they now appear to be trading at a discount to TNAV again and that is not counting the fact that the property portfolio was recently valued at a significant premium to the book value (although I wouldn't like to guess where property values are headed over the next 18 months).

I don't think there's any need to rush to buy the shares yet, there could well be a more concrete profit warning later in the year.

I'll monitor these.