Headlam Group (HEAD) investor relations material

Executive summary

• Implemented a new multi-year core customer strategy in November 2025, focusing on independent retailers and contractors and moving away from large, low-margin customers.

• Leadership strengthened with a new CEO and interim CFO, and an experienced management team to drive transformation and align the board.

• Transformation plan and revised strategy aim to return the business to profitability and strengthen the balance sheet by 2027.

Financial highlights

• Revenue declined 4.6% year-over-year to £498.7m, with gross margin stable at 29.5%.

• Underlying loss before tax was GBP 39.5 million, with underlying operating loss widening to £33.4m from £24.9m year-over-year.

• Statutory loss before tax increased to £69.6m, impacted by £30.1m in non-underlying items.

• Non-underlying items totaled GBP 30.1 million, mainly from restructuring and asset impairments.

• Net debt remained stable at around GBP 30 million over the last two years, at £31m as of December 2025.

• Continental European businesses, now discontinued, made an underlying loss before tax of GBP 3.7 million.

Outlook and guidance

• Strategy expects a planned reduction in revenue over 2026 and 2027, but with improved gross margin and net operating margins returning to mid-single digits post-transformation.

• Net debt anticipated to reduce in 2026 and further in 2027 through working capital release and property disposals.

• Board remains confident in a return to profitability in 2027, leveraging market position and focus on core customers.