We could not find any results for:
Make sure your spelling is correct or try broadening your search.

Trending Now


It looks like you aren't logged in.
Click the button below to log in and view your recent history.

Registration Strip Icon for charts Register for streaming realtime charts, analysis tools, and prices.

HEAD Headlam Group Plc

1.00 (0.49%)
Last Updated: 09:25:13
Delayed by 15 minutes
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 Shares Traded Last Trade
  1.00 0.49% 207.00 4,278 09:25:13
Bid Price Offer Price High Price Low Price Open Price
207.00 208.00 207.00 207.00 207.00
Industry Sector Turnover Profit EPS - Basic PE Ratio Market Cap
Floor Covering Stores 663.6M 33.6M 0.4160 4.98 167.19M
Last Trade Time Trade Type Trade Size Trade Price Currency
13:35:20 O 5 207.00 GBX

Headlam (HEAD) Latest News

Headlam (HEAD) Discussions and Chat

Headlam Forums and Chat

Date Time Title Posts
05/11/200720:40Important FOOTBALL question3
05/9/200617:18Meteoric rise on the cards?108
20/12/200216:18Headlam - Sinks on heavy discounted Institutional sale1

Add a New Thread

Headlam (HEAD) Most Recent Trades

Trade Time Trade Price Trade Size Trade Value Trade Type

Headlam (HEAD) Top Chat Posts

Top Posts
Posted at 07/12/2023 08:20 by Headlam Daily Update
Headlam Group Plc is listed in the Floor Covering Stores sector of the London Stock Exchange with ticker HEAD. The last closing price for Headlam was 206p.
Headlam currently has 80,768,367 shares in issue. The market capitalisation of Headlam is £167,190,520.
Headlam has a price to earnings ratio (PE ratio) of 4.98.
This morning HEAD shares opened at 207p
Posted at 06/12/2023 12:19 by sphere25
So LIKE didn't warn today, even mentioning a record performance month in November. The buyers came in early here on that with notable bids on the order book from 197p and slightly above. Normally nothing happens in HEAD on a morning - usually takes a while for the book to populate and the spread to come in.

So maybe the CEO buy here at HEAD is also suggesting trading isn't as bad as feared of late. I was torn about having a go here, but then the CEO bought, and that buy might end up being a signal.

It is still too uncertain. It isn't like the price here and elsewhere in smaller caps is on some charge - relief type bounces and more stalling now. Just a little trend here emerging, could just be a bounce, but I will hang on abit longer and see if the buyers keep coming in. Lob abit higher from here if the buyers keep coming and then sit and see how trading has gone into year end and develops.

It will be pants, but maybe pants is already in the price?

All imo
Posted at 27/11/2023 14:54 by sphere25
Proper dull out there.

Buyer in size noted here at 185p. Might have bought through the sellers there now. Further buyers would be needed to get through that 187-190p range for a move higher.

It might be on if this buyer in size sticks around. I don't mind jumping on board for a quick trade if the order book shows positive moment, but just unsure if another warning is on the way here and elsewhere. HEAD have already cautioned twice this year so expecting another shaky statement.

Any warning or cautionary statement might be in the price too so watching to see how it reacts. It looks cheap down here but prefer to see an update first when they have already warned or I'm unsure - applies to most really.

All imo

UPDATE: 28th November 09:35 CEO buys 25,919 shares at a price of 185p. Is that a little sign that trading isn't as bad as feared?
Posted at 02/11/2023 10:25 by pireric
I think I can be more simple here... we are in a downturn in demand, profits are compressed. The valuation is significantly below book value.

I'm not asking them to go and unlock the property portfolio. The point is that you don't see this sort of valuation generally sustain for a long period of time in equity markets. Headlam itself hasn't seen this sort of valuation discount to NTAV persist for a long time. Similarly, the multiple now versus cyclical high or just cyclical 'normal' profitability is very low. Anecdotally, REITs vs. NAV seem to have a very different dynamic to operating companies vs. NAV, though don't ask me why!

We can get in tangles about justifying short term share price movements. I'm more interested in where the stock will be in 2 years time on a cycle recovery/upswing. I could well be wrong, but when the demand environment is going in the right direction, it's going to be incredibly easy for new investors to come in and argue that the stock is materially undervalued. And probably when earnings can justify alone materially higher share prices.

Posted at 01/11/2023 18:55 by harry davis
Iam peed off with the share price action and management need to pull their finger out. They should sale and leaseback the entire property base and distribute a 175p special dividend. They should never have allowed this to drop below 250p.
Posted at 26/10/2023 19:28 by pireric
Always good to have a detailed debate!

Distribution business on 6x P/E... maybe if the market falls completely out of bed, but that would feel extremely harsh in a cycle upswing or even through a cycle on average. This has consistently traded into the low-double-digit P/E range in normal times. ROCE is generally good on these sorts of businesses, and cash generation tends to be solid too. Distributors as a whole (I'm thinking Flowtech, Macfarlane, James Latham, then the bigger more diversified multi-sector ones). 6x would stick out like a sore thumb against them by an order or magnitude, as it would Headlam's own history. Many of these in normal market environments are 10-13x stocks, with the more diversified players stretching towards 14-15x. So on 10x I'd be thinking £200m of base value under that argument (already >30% upside).

For additional context: Headlam's own average P/Es which were being applied to very mid-cycle profit numbers
- Last 2 years = 10.5x
- Last 4 years = 12.4x
- Last 10 years = 12.6x
- Average since 2005 = 12.1x
- P/E immediately pre-covid = 14x

I wouldn't assume you need to discount the inventory. Carpets, tiles etc really don't depreciate much or go out of fashion. Ironically, the inventory NAV is more rock solid than in most industries. I can't remember off the top of my head, but I don't recall any material inventory write-downs even through the GFC, as a result of the above factor. Headlam's accounting policies are pretty clean, which is why they have historically depreciated freeholds at 2% a year when freeholds generally increase their value over time.

If I did your £120m (far too low IMV), added full inventories back, £105m for receivables (i.e. £10m write-off), £18m of cash, net +£5m from fire insurance minus interim dividend, then minus total liabilities excluding lease liabilities (you can't really add those into your calculation without ROU assets) and you'd still get to £186m of value. That means you can afford £40m of inventory writedown just to get to what is implied at 182p and with zero net value for property assets. But this is a slightly apples to oranges approach as the inventory like most of the property are necessary to run the business.

And then I'd argue this should be more like a £25m+ net income business than £20m. As I said I wouldn't be writing down inventory and £10m of receivables write-downs is not small at all.

The more I do the maths, the more extremely bearish you have to be even to get to the current valuation.

So if I wanted to be super super simplistic...
- 10x P/E even on a reduced range of £20-25m of through the cycle net income gets 33-70% upside.
- Assets ex intangibles approach gets 80% upside.
- I can construct downside if the world goes to pot or something horrific happens here, but investing is all about likelihoods and I really like my odds of potentially making several years of effective 'averaged' double-digit returns off these levels

Posted at 22/10/2023 09:26 by pireric
I have to admit that I can't make much sense of the 2023 forecasts shown on stockopedia and other sites. If they are correct, they look exceptionally conservative to me, and extremely beatable.

Headlam have already flagged only a month ago about how profits are normally H2 weighted and that will be even more visible this year:

"The Group's profit performance is traditionally second half weighted, but is expected to be more so in 2023 due to the following factors:

· volume performance: UK volume declined 5% in H1 2023, which we anticipate to improve to be broadly flat year-on-year in H2 2023, reflecting a stabilisation in the decline trend combined with softer comparatives, particularly in Q4 2023;

· annualisation of the manufacturer-led price increase impact as we progress through H2, resulting in a lower headwind from the normalisation in gross margin;

· targeted price increases implemented during Q2 2023; and,

· cost savings, including the implementation of national transport and dynamic planning, the renegotiation of energy contracts and lower electricity consumption as a result of solar panel installations."

Forecasts imply £8.4m of operating profit in H2 compared to £8.2m in H1, so only 49/51% profit seasonality this year, and a meagre £0.2m H1 to H2 uplift.

2017-22 averages without COVID-2020
- Average seasonality 57% into H2 (54% in 2021/22)
- Average H1 to H2 profit uplift £5.6m

I don't see any reason why this won't be delivering at minimum 30p of earnings on a recovery horizon (and potentially back up towards 40p again). That leaves very material room for consensus upgrades off trough levels (PEG significantly under 1 on a 3-4 year stack) and you have a 40%+ discount to NTAV.thats without giving any credit for the growth initiatives, which is fair enough for now.

Posted at 18/10/2023 19:00 by pireric
Hi Cisk,

Beyond simply doing map analysis (which I did part of), it's hard to know on a case by case basis. But ultimately, I don't think anyone is really suggesting that they go around and sell off the freehold assets in bulk and wind down the business. Moreso that historically, it's pretty rare to find non-financials companies that have been consistently profitable trading below tangible book. Let alone a huge discount.

A lot of construction markets are indirect (have distributors) and remain that way without much shift. Whether that's bricks or other material components. The manufacturers don't want to maintain the long tail of supply chain connections, or become their own distribution or logistics plays. Sure, if Headlam gets disintermediated it's a risk, but I don't attribute much chance of that happening... certainly not above what HEAD are trying to do around their own trade counter/large customer initiatives.

I agree lack of positive near term catalysts. Has the cycle bottomed? Maybe not...

BUT in these deep cycles, share prices tend to bottom before earnings bottom. In the GFC, the share price rallied 40% off the lows, while EPS forecasts went off for another 15% cuts until they reached their lows. And even during the GFC, Headlam's trough P/B multiple was significantly above where it is today.

As soon as investors stop thinking about absolute valuation and more thinking it's too early to buy, rough rule of thumb for me is that is quite often a decent place to step in.

Posted at 18/10/2023 17:14 by pireric
Net asset value at the last accounts was £219.9m
Net assets - intangibles was £198.6m
Gross up the net assets for the freehold property mark to market valuation and net assets - intangibles + freeholds was on my estimate £257.8m

The current market valuation is £151.1m.

In other words, a 70%+ share price rise would only get the company back to its net asset base.

In other words, in my eyes, macro pressures aside, the value of this business is significantly above 190p, and patient investors will as a result be rewarded. Either as the market realises the above, or as a third party decides to realise that value themselves.

Bearing in mind this business has not made a profit loss in at least the last 20 years (i.e. net asset value net of shareholder distributions should build).

Posted at 06/9/2023 11:44 by tomps2
Headlam Group (HEAD) Half Year results presentation - September 2023

Headlam Group Chief Executive, Chris Payne and Chief Financial Officer, Adam Phillips present results for the the first six months of the year to 30 June 2023, followed by Q&A.

Watch the video here:

Or listen to the podcast here:
Posted at 26/5/2023 15:52 by 1tx
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.
Headlam share price data is direct from the London Stock Exchange

Your Recent History

Delayed Upgrade Clock

By accessing the services available at ADVFN you are agreeing to be bound by ADVFN's Terms & Conditions

Support: +44 (0) 203 8794 460 |