Floorcoverings distributor Headlam has reported a decline in sales as losses widened.
According to its full year results for the period ended 31 December 2025, total sales fell 4.6% to £498.7m from £525.7m in 2024.
EBITDA resulted at a loss of £12.5m, widening from a loss of £5m, while underlying pre-tax losses amounted to £39.5m, widening from a loss of £31.7m.
Gross margin stood at 29.5%, slightly down from 29.7% with a mixed impact from growth in lower-margin larger customers mitigated by proactive sourcing actions and centralised buying function.
The group recently introduced a multi-year core customer strategy to transform the business and enhance the quality of earnings through disciplined focus on core independent retailer and contractor customers.
Furthermore, Rob Barclay joined the group on 9 March 2026 as CEO designate and will be appointed to the Board on 27 April, while Richard Jones joined the group as Interim CFO on 12 March and will replace Adam Phillips, CFO, on the Board on 26 March 2026.
Looking ahead, Headlam said that its new core customer strategy will see a material planned reduction in revenue over 2026 and 2027.
“Once fully implemented, and, assuming a stable market, this is expected to result in a smaller base revenue on continuing operations but with a significant enhancement to quality of earnings through enhanced gross margin and lower operating costs,” the group said.
“In the near term, trading conditions remain challenging: consumer spending on home improvements continues to decline and the conflict in the Middle East, whilst hard to predict, has already created cost pressures for the wider UK flooring industry with significant price increases in polypropylene and fuel.”
Commenting on the results, Stephen Bird, Interim Executive Chair, said: “Our new core customer strategy, combined with the ongoing benefits of our transformation programme, provides a clear road map to profitability in 2027 and beyond. Current cost saving initiatives are progressing as anticipated with milestones being met.
“Whilst our current trading environment remains challenging, this should provide reassurance to all stakeholders that Headlam is delivering and will be able to capitalise on its position as the preeminent distributor of flooring products in the UK.
“The independent retailers and contractors we serve are resilient. The market will recover and when it does, we will be well placed to support them – initially smaller, but stronger, more focused, and more profitable.
“I would like to thank all employees for their commitment and in ensuring this is a business model that can weather market cycles and deliver consistent returns.”
