Headlam (HEAD) AI Stock Analysis

• Market Cap: £37.72M
• Dividend Yield: N/A
• Average Volume (3M): 318.67K
• Price to Earnings (P/E): ―
• Beta (1Y): 0.08
• Revenue Growth: -11.65%
• EPS Growth: -273.57%
• Country: UK
• Employees: 2,000
• Sector: Consumer Cyclical
• Sector Strength: 84
• Industry: Furnishings, Fixtures & Appliances
• EPS (TTM): -0.22
• Shares Outstanding: 80,846,990
• 10 Day Avg. Volume: 244,832
• 30 Day Avg. Volume: 318,670
• PEG Ratio: 0.01
• Price to Book (P/B): 0.60
• Price to Sales (P/S): 0.19
• P/FCF Ratio: -37.96
• Enterprise Value/Market Cap: N/A
• Enterprise Value/Revenue: N/A
• Enterprise Value/Gross Profit: N/A
• Enterprise Value/Ebitda: N/A
• 1Y Price Target: £100.00
• Price Target Upside: 114.13% Upside
• Rating Consensus: Hold
• Number of Analyst Covering: 1
• EPS Forecast (FY): N/A
• Revenue Forecast (FY): N/A

• Rating: 47 Neutral
• Price Target: 46.00p ▼(-1.50% Downside)

Headlam's overall stock score is primarily impacted by its financial struggles, including declining revenue and negative profitability. The technical analysis shows mixed signals, with short-term stability but long-term bearish trends. The valuation is weak due to negative earnings and no dividend yield. However, the company's transformation plan and restructuring efforts provide a positive outlook for potential recovery.

Positive Factors

Market-leading distribution network

A leading distributor position across the UK and Europe is a durable competitive advantage: scale in purchasing, wide customer reach (retailers, contractors, designers), and logistics capabilities support stable revenue generation and resilience versus smaller regional competitors.

Manageable leverage

Manageable leverage provides financial flexibility during the transformation plan and restructuring, reducing short-term refinancing risk and allowing investment in operational improvements. This structural balance helps the company execute turnaround actions without immediate solvency pressure.

Positive operating cash flow

Positive operating cash flow indicates the core distribution business generates cash from operations, a durable sign of underlying economic viability. This cash can fund working capital and support restructuring, though capex discipline is needed to convert it into sustained free cash flow.

Negative Factors

Declining revenue trend

An ~11.6% revenue decline erodes scale benefits and purchasing leverage, pressuring margins and long-term competitiveness. Sustained top-line contraction suggests structural market share loss or demand weakness, making recovery dependent on credible, durable revenue-restoration initiatives.

Persistent unprofitability

Negative EBIT, net income and sharply negative EPS growth indicate the business is not currently generating profits. Persistent unprofitability depletes equity, limits reinvestment capacity, and increases reliance on external financing, constraining strategic options over the medium term.

Negative free cash flow / cash conversion issues

Negative free cash flow from high capex and weak conversion of operating results limits balance sheet repair and debt reduction. Structurally, until capex is optimized or margins improve, the company may struggle to generate surplus cash for investment or to support dividend or deleveraging plans.

Headlam Business Overview & Revenue Model

Company Description

Headlam 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 Money

Headlam generates revenue primarily through the distribution of flooring products to a wide network of customers, including retailers and contractors. The company earns money by purchasing flooring materials from manufacturers and then selling them at a markup. Key revenue streams include sales of various types of floor coverings, such as carpets, vinyl, and hardwood, along with associated accessories and underlays. Additionally, Headlam benefits from providing logistical services and support to its customers, which can include delivery and installation services. Strategic partnerships with leading manufacturers enhance its product offerings and availability, further contributing to its earnings. The company also leverages its extensive distribution network to optimize supply chain efficiency, which helps in maintaining competitive pricing and driving sales growth.

Headlam Financial Statement Overview

Summary

Headlam faces significant financial challenges, including declining revenue, negative profitability, and strained cash flows. While the balance sheet shows manageable leverage, the negative net income and declining equity position point to the need for strategic adjustments to improve financial health.

Income Statement

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

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

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	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	545.30M	593.10M	656.50M	663.60M	667.20M	578.10M
Gross Profit	152.10M	167.00M	206.40M	219.50M	220.50M	178.10M
EBITDA	-29.80M	-9.30M	34.40M	64.70M	50.00M	23.50M
Net Income	-45.60M	-25.00M	7.70M	33.60M	24.40M	-20.30M
Balance Sheet
Total Assets	422.00M	397.70M	462.30M	435.40M	472.50M	467.40M
Cash, Cash Equivalents and Short-Term Investments	23.20M	12.00M	21.10M	2.10M	61.20M	60.80M
Total Debt	102.60M	62.30M	94.10M	38.00M	43.50M	52.50M
Total Liabilities	267.40M	206.70M	241.90M	210.60M	240.40M	247.40M
Stockholders Equity	154.60M	191.00M	220.40M	224.80M	232.10M	220.00M
Cash Flow
Free Cash Flow	-36.10M	-3.00M	-5.70M	-2.90M	6.90M	47.50M
Operating Cash Flow	-29.60M	7.60M	12.50M	10.90M	13.80M	62.50M
Investing Cash Flow	47.20M	50.70M	-13.40M	-12.10M	9.30M	-16.10M
Financing Cash Flow	-14.40M	-67.70M	19.30M	-58.20M	-22.10M	-19.40M

Headlam Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 46.70
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Negative
• MACD: Negative
• RSI: Neutral
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For GB:HEAD, the sentiment is Negative. The current price of 46.7 is below the 20-day moving average (MA) of 48.39, below the 50-day MA of 51.32, and below the 200-day MA of 71.80, indicating a bearish trend. The MACD of -1.55 indicates Negative momentum. The RSI at 41.72 is Neutral, neither overbought nor oversold. The STOCH value of 56.08 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for GB:HEAD.

Headlam Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
CFX	78 Outperform	£49.33M	8.81	19.42%	0.55%	2.64%	23.89%
HWDN	74 Outperform	£4.58B	18.38	24.46%	2.57%	0.13%	-0.06%
DFS	68 Neutral	£415.95M	17.18	10.06%	―	4.38%	―
ULTP	68 Neutral	£44.25M	7.73	12.08%	11.65%	-3.45%	-44.02%
Sector *	61 Neutral	$18.38B	12.79	-2.54%	3.03%	1.52%	-15.83%
SDG	49 Neutral	£31.80M	-2.07	-19.58%	3.45%	-4.23%	-435.86%
HEAD	47 Neutral	£37.72M	-0.83	-19.28%	―	-11.65%	-273.57%

Headlam Corporate Events

Headlam Group Outlines Transformation Plan to Regain Profitability

Headlam Group PLC has announced an update on its transformation plan aimed at returning to profitability. The plan includes refocusing on independent retailers, consolidating purchases, reducing operational footprint, improving stock turnover, and reducing SKUs. The company anticipates a return to profitability by 2027, with surplus properties disposed of and inventory levels significantly lowered. These strategic actions are expected to strengthen Headlam’s financial position and enhance its market presence.

The most recent analyst rating on (GB:HEAD) stock is a Hold with a £47.00 price target. To see the full list of analyst forecasts on Headlam stock, see the GB:HEAD Stock Forecast page.

Headlam Group Initiates Restructuring Amid Revenue Decline

Headlam Group PLC reported a 5% decline in revenue for the four months ending October 31, 2025, falling short of expectations. In response, the company has initiated a restructuring program aimed at cost reduction and operational improvements to regain profitability and strengthen its market position. The Board remains confident that these measures, along with the company’s established market presence and relationships, will facilitate a return to sustainable growth.

The most recent analyst rating on (GB:HEAD) stock is a Hold with a £53.00 price target. To see the full list of analyst forecasts on Headlam stock, see the GB:HEAD Stock Forecast page.