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(Sharecast News) - Headlam Group said on Wednesday that revenue from continuing operations fell 21% in the first four months of the year, as difficult market conditions and a planned reduction in certain sales activity continued to weigh on trading.
The London-listed floor coverings distributor said the decline partly reflected its new core customer strategy, under which the business is refocusing on independent retailers and flooring contractors.
It said difficult end-market conditions had also continued, leaving the group incurring significant underlying operating losses.
Headlam said its new management team, in place for eight weeks, had already implemented some operational improvements.
The group introduced a price increase in May and targeted surcharges to reflect higher raw material input costs, which it said were being passed on to customers.
The company said it would continue to monitor the impact of macroeconomic and geopolitical issues and act accordingly, while the management team remained focused on further operational and commercial improvements.
Headlam also said it had recently completed the sale of one of three surplus properties previously highlighted in March, with disposals of the remaining two properties due to complete shortly.
Together, the disposals were expected to generate about 15.3m of net proceeds, which will be used to invest in working capital and improve liquidity.
The group said it was also evaluating a potential sale and leaseback of its Coleshill property, which would provide further liquidity.
It said the property transactions formed part of a wider range of options being considered to strengthen the balance sheet during 2026.
Net debt at the end of April stood at 40.3m, compared with 31.4m at the end of 2025, reflecting ongoing operating losses and one-off transformation costs, partly offset by lower working capital.
Headlam said two new non-executive directors, Nick Kelsall and Wilf Walsh, would join the board at its annual general meeting.
The company said the board, after engagement with shareholders, continued to believe it had the right skills and experience to provide leadership and stability.
The board also reiterated its recommendation that shareholders reject resolutions contained in a requisition notice due to be voted on 2 June.
Chief executive Rob Barclay said it had been a busy first couple of months since joining the business.
"The board remains of the view that, while there is lots to do on multiple fronts, there is a pathway to return to profitability during 2027," he said.
"To deliver this we need to act with speed and decisiveness, and this is the focus of my team."
At 1023 BST, shares in Headlam Group were down 11.11% at 32p.
Reporting by Josh White for Sharecast.com.
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