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Headlam (GB:HEAD)
LSE:HEAD
UK Market

Headlam (HEAD) AI Stock Analysis

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GB

Headlam

(LSE:HEAD)

Rating:51Neutral
Price Target:
96.00p
▼(-1.03%Downside)
The overall stock score reflects significant financial challenges, but positive technical trends and supportive corporate events provide some optimism. Poor financial performance is the primary drag on the score, while technical analysis and corporate events offer a moderate counterbalance.

Headlam (HEAD) vs. iShares MSCI United Kingdom ETF (EWC)

Headlam Business Overview & Revenue Model

Company DescriptionHeadlam Group plc, together with its subsidiaries, sells, markets, supplies, and distributes floorcovering and other ancillary products in the United Kingdom and Continental Europe. The company offers its products to residential and commercial sector, such as independent retailers and flooring contractors, as well as other groups, including larger retailers, housebuilders, specifiers, and local contractors. It distributes its products through 21 distribution hubs and centers. The company was incorporated in 1948 and is based in Birmingham, the United Kingdom.
How the Company Makes MoneyHeadlam makes money through the sale of floor covering products to various customer segments, including independent retailers, contractors, and wholesalers. The company's revenue model is primarily based on purchasing products from a wide range of suppliers and distributing them through its extensive network of regional distribution centers. This network allows Headlam to efficiently deliver products across its markets. Key revenue streams include direct sales to customers, as well as providing value-added services such as product advice and logistics solutions. Strategic partnerships with flooring manufacturers and suppliers are significant contributors to Headlam's earnings, enabling the company to offer a comprehensive product range and competitive pricing.

Headlam Financial Statement Overview

Summary
Headlam faces significant financial challenges with declining revenue, negative profitability, and strained cash flows. Despite manageable leverage, the negative net income and declining equity position highlight the need for strategic improvements.
Income Statement
35
Negative
The company experienced declining revenue with a negative growth rate from the previous year. Additionally, the negative EBIT and Net Income indicate significant challenges in maintaining profitability. Despite past profitability, the current period shows substantial losses.
Balance Sheet
45
Neutral
The debt-to-equity ratio suggests manageable leverage, but a declining equity base raises concerns. The return on equity is negative due to the net loss, impacting overall financial stability. The equity ratio remains stable, indicating some level of balance in asset financing.
Cash Flow
50
Neutral
The cash flow analysis shows a mixed picture with operating cash flow remaining positive, yet free cash flow is negative due to high capital expenditures. The company has struggled to convert operating profit into free cash flow, affecting cash flow strength.
Breakdown
Dec 2024Dec 2023Dec 2022Dec 2021Dec 2020
Income StatementTotal Revenue
593.10M656.50M663.60M667.20M609.20M
Gross Profit
167.00M206.40M219.50M220.50M188.90M
EBIT
-34.50M14.30M43.90M29.10M-10.90M
EBITDA
-9.30M34.40M64.70M50.00M12.40M
Net Income Common Stockholders
-25.00M7.70M33.60M24.40M-20.30M
Balance SheetCash, Cash Equivalents and Short-Term Investments
12.00M21.10M2.10M61.20M60.80M
Total Assets
397.70M462.30M435.40M472.50M467.40M
Total Debt
62.30M94.10M38.00M43.50M52.50M
Net Debt
50.30M73.00M35.90M-17.70M-8.30M
Total Liabilities
206.70M241.90M210.60M240.40M247.40M
Stockholders Equity
191.00M220.40M224.80M232.10M220.00M
Cash FlowFree Cash Flow
-3.00M-5.70M-2.90M6.90M47.50M
Operating Cash Flow
7.60M12.50M10.90M13.80M62.50M
Investing Cash Flow
50.70M-13.40M-12.10M9.30M-16.10M
Financing Cash Flow
-67.70M19.30M-58.20M-22.10M-19.40M

Headlam Technical Analysis

Technical Analysis Sentiment
Positive
Last Price97.00
Price Trends
50DMA
88.65
Positive
100DMA
104.16
Negative
200DMA
120.58
Negative
Market Momentum
MACD
2.01
Negative
RSI
57.89
Neutral
STOCH
80.42
Negative
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For GB:HEAD, the sentiment is Positive. The current price of 97 is above the 20-day moving average (MA) of 94.12, above the 50-day MA of 88.65, and below the 200-day MA of 120.58, indicating a neutral trend. The MACD of 2.01 indicates Negative momentum. The RSI at 57.89 is Neutral, neither overbought nor oversold. The STOCH value of 80.42 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for GB:HEAD.

Headlam Peers Comparison

Overall Rating
UnderperformOutperform
Sector (62)
Financial Indicators
Name
Overall Rating
Market Cap
P/E Ratio
ROE
Dividend Yield
Revenue Growth
EPS Growth
GBCFX
73
Outperform
£47.15M8.6218.68%0.71%2.96%9.77%
GBSDG
68
Neutral
£32.43M6.71-19.63%7.14%-7.45%-51.68%
62
Neutral
$6.83B11.282.95%3.88%2.70%-24.56%
51
Neutral
£80.12M-12.15%6.45%-9.66%-425.03%
GBCHH
£76.43M12.0110.50%5.47%
GBVCP
41
Neutral
£68.58M486.49%-11.73%-62.35%
£57.44M73.441.96%1.59%
* Consumer Cyclical Sector Average
Performance Comparison
Ticker
Company Name
Price
Change
% Change
GB:HEAD
Headlam
97.00
-55.00
-36.18%
GB:CHH
Churchill China
685.00
-332.42
-32.67%
GB:CFX
Colefax
800.00
-44.42
-5.26%
GB:VCP
Victoria
65.20
-113.80
-63.58%
GB:SDG
Sanderson Design Group PLC
45.00
-62.38
-58.09%
GB:LIKE
Likewise Group Plc
23.50
8.28
54.40%

Headlam Corporate Events

Executive/Board ChangesShareholder Meetings
Headlam Group PLC Secures Shareholder Approval at 2025 AGM
Positive
May 23, 2025

Headlam Group PLC announced that all resolutions presented at its 2025 Annual General Meeting were approved by shareholders. This includes the re-election of board members and the re-appointment of PricewaterhouseCoopers as auditor, reflecting strong shareholder support and potentially reinforcing the company’s governance and operational strategies.

Business Operations and StrategyFinancial Disclosures
Headlam Group Reports Revenue Decline Amidst Market Challenges, Accelerates Transformation Plan
Neutral
May 22, 2025

Headlam Group PLC reported a sequential improvement in year-on-year revenue declines, with a 4.7% decline over the first four months of 2025. Strategic growth initiatives in Larger Customers and Trade Counters showed revenue growth, while Regional Distribution saw a decline. The company is accelerating its transformation plan, including network optimization and sales organization changes, to counter weaker market performance. Despite challenges, Headlam anticipates a recovery in profitability supported by market improvements and its robust market position.

Other
Headlam Group Directors and Executives Acquire Shares, Signaling Confidence
Positive
May 1, 2025

Headlam Group PLC announced significant share transactions involving its directors and executives. Stephen Bird, the Non-Executive Director and Chair, purchased 50,000 shares, while Jemima Bird, the Non-Executive Director and Senior Independent Director, acquired 12,117 shares. Additionally, Chief Executive Chris Payne exercised his option to obtain 24,748 shares under the company’s Deferred Bonus Plan. These transactions reflect confidence in the company’s future prospects and may influence shareholder perceptions and market dynamics.

Regulatory Filings and Compliance
Headlam Group PLC Announces Total Voting Rights Update
Neutral
Apr 30, 2025

Headlam Group PLC announced its total issued share capital as of April 30, 2025, which consists of 85,639,209 ordinary shares, with 80,841,594 shares having voting rights. This information is crucial for shareholders to determine their interest in the company’s share capital, in accordance with the FCA’s Disclosure Guidance and Transparency Rules.

Executive/Board ChangesBusiness Operations and Strategy
Headlam Group Grants Performance Share Plan Awards to Executives
Positive
Apr 17, 2025

Headlam Group PLC has announced the granting of awards under its Performance Share Plan to its Chief Executive, Chris Payne, and Chief Financial Officer, Adam Phillips. These awards, in the form of nil-cost options over ordinary shares, are contingent upon the achievement of specific performance conditions, including earnings per share growth, shareholder return relative to the FTSE SmallCap Index, and reductions in greenhouse gas emissions. The performance period spans three years, with an additional two-year holding period post-vesting, ensuring alignment with the company’s long-term financial performance. This move is expected to incentivize the executive team, aligning their interests with those of the shareholders and potentially impacting the company’s strategic direction and sustainability efforts.

Business Operations and Strategy
Headlam Group Recognizes Employee Loyalty with Share Awards
Positive
Apr 8, 2025

Headlam Group PLC has announced the issuance of 6,700 ordinary shares to employees as part of its Employee Long Service Awards Scheme, which recognizes long-serving employees with monetary gifts and share awards. This transfer of shares from treasury stock highlights the company’s commitment to rewarding employee loyalty and may influence shareholder calculations regarding share capital interests.

Executive/Board ChangesBusiness Operations and Strategy
Headlam Group Announces Leadership Appointment
Positive
Mar 25, 2025

Headlam Group PLC announced the appointment of Jemima Bird, a Non-Executive Director, as the Chair of the Remuneration Committee at Creightons PLC, effective from March 31, 2025. This move highlights the company’s strategic focus on strengthening its leadership and governance, potentially impacting its operational efficiency and stakeholder confidence.

Shareholder MeetingsFinancial DisclosuresRegulatory Filings and Compliance
Headlam Group Releases 2024 Annual Report and AGM Notice
Neutral
Mar 24, 2025

Headlam Group PLC has announced the publication of its 2024 Annual Report and Accounts, along with the Notice of the 2025 Annual General Meeting (AGM). These documents have been submitted to the National Storage Mechanism and are available on the company’s website. The AGM is scheduled for 22 May 2025. This announcement is part of Headlam’s compliance with regulatory requirements and provides shareholders with important financial and operational insights from the past year.

Business Operations and StrategyFinancial Disclosures
Headlam Group PLC Reports 2024 Results Amid Strategic Transformation
Neutral
Mar 11, 2025

Headlam Group PLC announced its full-year results for 2024, highlighting significant progress in its transformation plan despite challenging market conditions that impacted profitability. The company maintained its market share, with a 9.7% revenue decline and a £34.3 million underlying loss before tax due to market decline and cost inflation. The transformation plan aims to simplify operations and improve profitability, with upgraded targets for profit improvement and cash inflow. The company has strengthened its balance sheet with a net cash position of £10.9 million and substantial cash proceeds from property disposals. The strategic restructuring is expected to position Headlam for increased market share and long-term success, despite ongoing market weakness.

Glossary
OutperformA stock rated as "Outperform" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock is likely to deliver higher returns compared to the average returns of other stocks in the same sector or market index. Investors might consider this stock a good buying opportunity.
NeutralA stock rated as "Neutral" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly attractive nor unattractive for investment. Investors may consider holding onto the stock, as it is not expected to either significantly outperform or underperform the market.
UnderperformA stock rated as "Underperform" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock may deliver lower returns compared to the average returns of other stocks in the same sector or market index. Investors might consider selling the stock or avoiding it as an investment.

Disclaimer

This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.