Headlam (HEAD) AI Stock Analysis

• Market Cap: £56.52M
• Dividend Yield: 6.45%
• Average Volume (3M): 131.94K
• Price to Earnings (P/E): ―
• Beta (1Y): 0.27
• Revenue Growth: -9.66%
• EPS Growth: -425.03%
• Country: UK
• Employees: 2,000
• Sector: Consumer Cyclical
• Sector Strength: 80
• Industry: Furnishings, Fixtures & Appliances
• EPS (TTM): -0.11
• Shares Outstanding: 80,866,340
• 10 Day Avg. Volume: 124,707
• 30 Day Avg. Volume: 131,935
• PEG Ratio: N/A
• Price to Book (P/B): 0.00
• Price to Sales (P/S): 0.00
• P/FCF Ratio: 0.00
• 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: £84.00
• Price Target Upside: 16.99% Upside
• Rating Consensus: Hold
• Number of Analyst Covering: 0

• Rating: 46 Neutral
• Price Target: 84.00p ▲(16.99% Upside)

Headlam's overall stock score reflects significant financial and technical challenges, including declining revenue and negative profitability, alongside bearish market indicators. However, positive corporate actions, such as strategic asset sales to enhance liquidity and insider buying, provide some optimism.

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 wholesale distribution of flooring products to retailers, contractors, and other businesses in the construction and renovation sectors. The company's revenue model is built on selling a diverse portfolio of flooring materials from various manufacturers, often at competitive prices. Key revenue streams include direct sales to customers, as well as partnerships with suppliers and manufacturers that enhance its product offerings. Additionally, Headlam benefits from its extensive logistics and distribution network, which allows for efficient delivery and service, further driving sales and customer retention. The company's ability to adapt to market trends and customer preferences also contributes significantly to its earnings.

Headlam Financial Statement Overview

Summary

Headlam faces significant financial challenges, including declining revenue and negative profitability. The balance sheet shows manageable leverage, but a negative net income and declining equity position indicate financial strain, necessitating strategic adjustments.

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	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	593.10M	656.50M	663.60M	667.20M	609.20M
Gross Profit	167.00M	206.40M	219.50M	220.50M	188.90M
EBITDA	-9.30M	34.40M	64.70M	50.00M	12.40M
Net Income	-25.00M	7.70M	33.60M	24.40M	-20.30M
Balance Sheet
Total Assets	397.70M	462.30M	435.40M	472.50M	467.40M
Cash, Cash Equivalents and Short-Term Investments	12.00M	21.10M	2.10M	61.20M	60.80M
Total Debt	62.30M	94.10M	38.00M	43.50M	52.50M
Total Liabilities	206.70M	241.90M	210.60M	240.40M	247.40M
Stockholders Equity	191.00M	220.40M	224.80M	232.10M	220.00M
Cash Flow
Free Cash Flow	-3.00M	-5.70M	-2.90M	6.90M	47.50M
Operating Cash Flow	7.60M	12.50M	10.90M	13.80M	62.50M
Investing Cash Flow	50.70M	-13.40M	-12.10M	9.30M	-16.10M
Financing Cash Flow	-67.70M	19.30M	-58.20M	-22.10M	-19.40M

Headlam Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 71.80
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Negative
• MACD: Positive
• RSI: Positive
• STOCH: Positive

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 71.8 is below the 20-day moving average (MA) of 77.29, below the 50-day MA of 83.09, and below the 200-day MA of 104.46, indicating a bearish trend. The MACD of -3.09 indicates Positive momentum. The RSI at 25.73 is Positive, neither overbought nor oversold. The STOCH value of 7.36 is Positive, 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	74 Outperform	£49.79M	7.84	19.42%	0.50%	2.64%	23.89%
Sector *	61 Neutral	$17.64B	14.17	-5.22%	3.04%	1.43%	-15.11%
SDG	61 Neutral	£37.87M	6.71	-19.63%	2.86%	-7.59%	-285.33%
LIKE	61 Neutral	£62.42M	78.13	1.96%	1.53%	7.35%	-11.43%
VCP	55 Neutral	£81.80M	―	486.49%	―	-12.17%	-145.41%
HEAD	46 Neutral	£56.52M	―	-12.15%	6.45%	-9.66%	-425.03%
CHH	―	£47.29M	7.43	10.50%	13.08%	―	―

Headlam Corporate Events

Headlam Group Reports Positive Revenue Trends Amid Transformation Efforts

Headlam Group PLC reported a slight decline in revenue for the first half of 2025, with a 3.8% drop overall, but noted a positive trend with revenue and volume growth in June for the first time since early 2022. The company is progressing with its transformation plan, including centralised procurement and operational transitions, aiming for significant cost savings and profitability improvements. Despite the challenges, the Board expects full-year results to meet expectations, supported by a robust balance sheet and recent strategic financial moves, such as the sale and leaseback of a distribution centre.

Headlam Group Enhances Liquidity with Tamworth Centre Sale-Leaseback

Headlam Group PLC has announced the sale and leaseback of its Tamworth distribution centre as part of its ongoing transformation plan. The transaction, valued at £21.75 million, represents a significant premium over the property’s book and market values. This move is expected to optimize the company’s mix of owned and leased distribution centers, with the leaseback being cost-neutral to the company’s underlying profit before tax. The proceeds from the sale will enhance liquidity by reducing the company’s drawdown on its revolving credit facility, supporting further implementation of the transformation plan.

Headlam Group Sees Change in Major Shareholder Holdings

Headlam Group PLC, a company in the flooring industry, announced a change in major holdings with Perpetual Limited crossing the threshold of 11.142% in voting rights. This acquisition of voting rights by Perpetual Limited, based in Sydney, Australia, indicates a shift in shareholder influence, potentially impacting Headlam’s strategic decisions and stakeholder interests.

Headlam Group Sees Increase in Major Shareholder Voting Rights

Headlam Group PLC has announced a significant change in its shareholder structure, with Perpetual Limited increasing its voting rights to 11.1124% from a previous 10.158%. This change in holdings could impact Headlam’s strategic decisions and influence within the flooring industry, as Perpetual Limited, along with its associated entities, now holds a substantial stake in the company.

Headlam Group PLC Secures Shareholder Approval at 2025 AGM

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.

Headlam Group Reports Revenue Decline Amidst Market Challenges, Accelerates Transformation Plan

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.