Headlam (HEAD)

Headlam HEAD Logo

Europe’s largest distributor of floorcoverings engaged in the marketing, supply and distribution of a range of floorcovering products, focused on providing customers, principally independent floorcovering retailers and contractors, with a range of floorcovering products supported by a next day delivery service.

7-Dec-2017 – 526p – £446.3m – PER 12.5

Trading Update For The 10 Months To End October 2017 – Revenue up 1.7% (CC) and overall growthfor the year is expected to be marginally lower than planned. PBT expected to be in-line (due to work on margins).

At this valuation with a reasonably well covered 4.5% or so Dividend and a decent cash pile any slip from here could make it even more interesting to income seekers. I am going to add this to my Watchlist (even though the Dividend is not mentioned in this update).

18-Jan-2018 – 570p – £483.6m – PER 12.6

Trading Update For The 12 Months To End December 2017 – Margin enhancements and efficiencies offset the slightly lower than expected revenue growth – Underlying PBT to be comfortably in-linewith consensus market expectations (£42.5m, up 6% on last year).

Still attractive enough, especially for that reasonably well covered Dividend of circa 4%+. There’s also a decent cash pile. Wouldn’t mind this yield with the Cash safety net there too. It’s going on my Watchlist, 530p, where that yield will be even more attractive.

6-Mar-2018 – 529p – £448.9m – PER 11.7

Final Results For The 12 Months To End December 2017 – Seems about in-line to me.

This was on my Watchlist at 530p – There’s a well covered Dividend of circa 4%+ and a decent cashpile. Based on the slow growth here though I am going to lower that Watchlist price to 450p for now.

24-May-2018 – 482.5p – £409.4m – PER 10.7

AGM Statement – Not so encouraging.

Growth was already forecast to slow here and this probably won’t help. I will remove this from my Watchlist and go Neutral for now.

18-Jul-2018 – 460.5p – £389.4m – PER 10.5

Trading Update For The 6 Months To End June 2018 – Revenue down 4.5% but still confident of delivering FY expectations.

I remain Neutral.

22-Aug-2018 – 449.5p – £380.2m – PER 10.2

Interim Results For The 6 Months To End June 2018 – Not sure these results could be flatter with no real movement in Revenue, Profit or the Dividend. Expects FY to be better than last year but at the lower end of current market expectations.

I remain Neutral and reckon, based on this (even with a 5%+ yield) there’s still room for a little more drift here.

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