Headlam Group Plc (LON:HEAD) are the topic of conversation when Zeus Capital Equity Research Director Andy Hanson caught up with us. Andy talks us through the final results for year end 31st Dec 2016, his thoughts on sustainability of the improvement in operational gearing, how cash generation is looking, special dividends and how the valuation is looking.
Headlam Group plc is Europe’s largest distributor of floorcoverings, having grown significantly via acquisition and organic growth since 1992. The Company currently comprises over 60 wholly-owned floorcoverings distribution businesses in the UK and Continental Europe each operating under their own trade brand. Each business is supported by the Company’s centralised and financial resources and extensive distribution network, and the Company’s scale allows the businesses to benefit from greater access to suppliers of floorcovering products. An extensive range of floorcovering products (including carpet, vinyl, wood and laminate) is sourced from suppliers across 13 countries, who gain considerable access into the European market. The Company’s distribution network (comprising distribution hubs, distribution centres and service centres) allows customers to benefit from next day delivery as well as an extensive product range. The Company’s customers are within the residential and commercial sectors and comprise principally independent retailers and flooring contractors with whom the Company’s businesses typically have long standing relationships. A greater reach is achieved into the customer base by each business operating under their own trade brand and utilising their individual sales teams.