Heath (Samuel) & Sons (HSM) AI Stock Analysis

• Market Cap: £8.49M
• Dividend Yield: 3.84%
• Average Volume (3M): 422.00
• Price to Earnings (P/E): 3.9
• Beta (1Y): -0.17
• Revenue Growth: -0.57%
• EPS Growth: 32.71%
• Country: UK
• Employees: 136
• Sector: Industrials
• Sector Strength: 72
• Industry: Construction
• EPS (TTM): 0.21
• Shares Outstanding: 2,534,322
• 10 Day Avg. Volume: 910
• 30 Day Avg. Volume: 422
• PEG Ratio: 0.53
• Price to Book (P/B): 0.64
• Price to Sales (P/S): 0.53
• P/FCF Ratio: 9.82
• 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: N/A
• Price Target Upside: N/A
• Rating Consensus: N/A
• Number of Analyst Covering: 0
• EPS Forecast (FY): N/A
• Revenue Forecast (FY): N/A

• Rating: 74 Outperform
• Price Target: 431.00 p ▲(26.76% Upside)
• Action: Reiterated Date: 12/07/25
• Date: Action: Reiterated 12/07/25

Heath (Samuel) & Sons scores well due to its strong valuation and positive technical indicators. The company's low leverage and efficient cost management contribute positively, although challenges in revenue growth and profitability margins are noted. The recent dividend approval further supports investor confidence.

Positive Factors

Low Leverage / Strong Balance Sheet

Extremely low leverage (debt/equity 0.016) provides durable financial flexibility, lowers bankruptcy risk and preserves borrowing capacity. Over the next 2–6 months this supports capital allocation optionality, resilience through demand cycles and ability to fund strategic initiatives without stressing cash flow.

High Gross Margin / Cost Management

A roughly 46% gross margin reflects sustainable product-level profitability and pricing power. Combined with signs of improved EBIT/EBITDA margins, this durable margin profile helps absorb input cost swings and supports reinvestment for product development and marketing over multiple quarters.

Diversified Revenue Channels & Brand

Multiple distribution streams (direct e-commerce, retail, wholesale) and strategic sustainability partnerships reduce single-channel risk and expand addressable markets. This structural diversification supports steady demand, helps smooth seasonality and underpins medium-term growth initiatives and customer retention.

Negative Factors

Negative Revenue Growth

Persistent negative top-line growth erodes operating scale and limits the firm's ability to leverage fixed costs. Over several quarters this can compress margins, reduce funds for product investment and marketing, and make it harder to regain market share versus competitors.

Declining Return on Equity

A sharp fall in ROE indicates weaker profitability relative to shareholder capital and suggests reduced capital efficiency. If sustained, lower ROE hampers long-term shareholder returns and signals the need for operational improvements or strategic actions to restore asset and margin productivity.

Weak Free Cash Flow Conversion

Negative free cash flow growth points to weaker cash conversion and restricts the company's ability to fund dividends, capital expenditure or growth initiatives internally. Over the medium term, this can force reliance on external financing or slow strategic investments.

Heath (Samuel) & Sons Business Overview & Revenue Model

Company Description

Samuel Heath & Sons plc engages in the manufacture and marketing of various products in the builders' hardware and bathroom field in the United Kingdom. It offers basic ancillaries and taps; bath ancillaries and taps; bathroom accessories; bidet taps; concealed showers; cupboards/cabinets; exposed showers; external and internal doors; further fittings; generic roughs; kitchen taps; shower accessories and ancillaries; toilet fittings; and windows. The company also exports its products. Samuel Heath & Sons plc was founded in 1820 and is headquartered in Birmingham, the United Kingdom.

How the Company Makes Money

Heath (Samuel) & Sons generates revenue through multiple streams, including direct sales to consumers via their online platform and physical retail locations, as well as wholesale distribution to various retailers. The company capitalizes on its established brand reputation and loyal customer base to drive sales. Additionally, HSM has formed strategic partnerships with eco-friendly suppliers and local artisans, enhancing its product offerings while also tapping into niche markets that prioritize sustainability. Seasonal promotions and limited-edition product launches further contribute to revenue, along with a growing focus on e-commerce, which has expanded its reach and accessibility to a broader audience.

Heath (Samuel) & Sons Financial Statement Overview

Summary

Heath (Samuel) & Sons demonstrates solid financial stability with low leverage and efficient cost management. However, declining revenue growth and profitability margins pose challenges. The company needs to focus on enhancing revenue streams and improving free cash flow to sustain long-term growth.

Income Statement

Heath (Samuel) & Sons shows a stable gross profit margin around 46%, indicating efficient cost management. However, the net profit margin has declined to 6% from a peak of 10.5% in 2022, reflecting reduced profitability. Revenue growth is negative at -1.55%, suggesting challenges in expanding sales. The EBIT and EBITDA margins have improved slightly, indicating better operational efficiency compared to the previous year.

Balance Sheet

The company maintains a strong balance sheet with a very low debt-to-equity ratio of 0.016, indicating minimal leverage and financial risk. The return on equity has decreased to 7.2% from 19.2% in 2022, suggesting reduced profitability for shareholders. The equity ratio remains healthy, reflecting a strong capital structure.

Cash Flow

Operating cash flow has improved significantly, but free cash flow growth is negative at -21.1%, indicating potential cash management issues. The operating cash flow to net income ratio is strong at 0.84, suggesting good cash generation relative to profits. However, the free cash flow to net income ratio is moderate at 0.51, indicating room for improvement in cash conversion.

Breakdown	TTM	Mar 2024	Mar 2023	Mar 2022	Mar 2021	Mar 2020
Income Statement
Total Revenue	14.92M	14.77M	15.24M	14.72M	14.02M	11.54M
Gross Profit	6.96M	6.84M	6.94M	6.77M	7.04M	4.97M
EBITDA	2.06M	1.93M	1.58M	1.70M	2.57M	1.20M
Net Income	1.02M	888.00K	768.00K	931.00K	1.47M	393.00K
Balance Sheet
Total Assets	15.23M	15.27M	15.01M	14.21M	14.70M	13.84M
Cash, Cash Equivalents and Short-Term Investments	2.62M	2.17M	1.68M	2.72M	4.41M	3.68M
Total Debt	171.00K	202.00K	85.00K	118.00K	191.00K	55.00K
Total Liabilities	2.71M	2.96M	2.83M	3.02M	7.02M	8.22M
Stockholders Equity	12.52M	12.30M	12.18M	11.19M	7.68M	5.62M
Cash Flow
Free Cash Flow	1.08M	800.00K	-713.00K	-1.29M	1.05M	683.00K
Operating Cash Flow	1.57M	1.58M	137.00K	233.00K	1.80M	931.00K
Investing Cash Flow	-446.00K	-670.00K	-849.00K	-1.45M	-727.00K	-206.00K
Financing Cash Flow	-408.00K	-407.00K	-376.00K	-389.00K	-360.00K	-59.00K

Heath (Samuel) & Sons Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 340.00
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Positive
• MACD: Negative
• RSI: Positive
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For GB:HSM, the sentiment is Negative. The current price of 340 is above the 20-day moving average (MA) of 339.00, below the 50-day MA of 351.12, and above the 200-day MA of 330.22, indicating a neutral trend. The MACD of -5.93 indicates Negative momentum. The RSI at 23.17 is Positive, neither overbought nor oversold. The STOCH value of 28.57 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for GB:HSM.

Heath (Samuel) & Sons Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
NXR	74 Outperform	£284.24M	117.95	6.14%	3.48%	-3.93%	41.83%
HSM	74 Outperform	£8.49M	3.92	8.12%	3.84%	-0.57%	32.71%
ECEL	70 Neutral	£114.32M	13.87	7.28%	3.97%	5.51%	-33.75%
ALU	66 Neutral	£89.43M	7.45	18.04%	4.63%	12.60%	6.64%
Sector *	63 Neutral	$10.79B	15.43	7.44%	2.01%	2.89%	-14.66%
TON	58 Neutral	£9.56M	36.16	-11.61%	―	-27.62%	-228.90%
SRAD	57 Neutral	£160.46M	212.00	1.61%	4.39%	-3.51%	-67.38%

Heath (Samuel) & Sons Corporate Events

Samuel Heath & Sons Announces Finance Leadership Transition

Samuel Heath & Sons plc has announced that its Financial Director, Simon Latham, will retire on 31 March 2026 after nine years in the role, marking a significant leadership change in the company’s finance function. The company has appointed Sarn Lloyd as Head of Finance, a non-board position effective 2 February 2026; Lloyd brings experience as Chief Financial Officer at engineering solutions group Neos International and as Interim Head of Finance at aerospace firm Mettis Aerospace, which the board expects will strengthen Samuel Heath’s financial management and support its strategic and operational objectives during the transition.

The most recent analyst rating on (GB:HSM) stock is a Hold with a £422.00 price target. To see the full list of analyst forecasts on Heath (Samuel) & Sons stock, see the GB:HSM Stock Forecast page.

Samuel Heath & Sons PLC Reports Modest Growth Amid Economic Challenges

Samuel Heath & Sons PLC reported a modest increase in sales and operating profit for the first half of 2025, despite challenges such as increased national insurance contributions and tariffs on US sales. The company is facing a tougher economic environment in its key markets, leading to reduced headcount and cost-cutting measures in anticipation of weaker sales in the second half of the year. New product finishes have been well-received, and a collaboration with designer Laura Hammett is expected to boost future sales.

The most recent analyst rating on (GB:HSM) stock is a Buy with a £374.00 price target. To see the full list of analyst forecasts on Heath (Samuel) & Sons stock, see the GB:HSM Stock Forecast page.