LSE:HEAD

Stock Analysis Report

Executive Summary

Headlam Group plc, through its subsidiaries, sells, markets, supplies, and distributes floorcovering and other ancillary products.

Snowflake

Fundamentals

Flawless balance sheet established dividend payer.

Share Price & News

How has Headlam Group's share price performed over time and what events caused price changes?


Latest Share Price and Events


Market Performance


7 Day Return

4.9%

LSE:HEAD

2.1%

GB Retail Distributors

0.05%

GB Market


1 Year Return

-5.1%

LSE:HEAD

-3.8%

GB Retail Distributors

-0.7%

GB Market

HEAD matched the Retail Distributors industry (-4.4%) over the past year.

HEAD underperformed the Market in United Kingdom of Great Britain and Northern Ireland which returned -0.3% over the past year.


Share holder returns

HEADIndustryMarket
7 Day4.9%2.1%0.05%
30 Day2.7%6.5%3.5%
90 Day-5.5%7.0%-0.1%
1 Year0.09%-5.1%-0.7%-3.8%4.1%-0.7%
3 Year7.0%-8.7%6.8%-3.5%21.2%6.7%
5 Year28.9%0.3%26.6%8.9%31.5%3.8%

Price Volatility Vs. Market

How volatile is Headlam Group's share price compared to the market and industry in the last 5 years?


Simply Wall St News

Valuation

Is Headlam Group undervalued based on future cash flows and its price relative to the stock market?

20%

Discount to future cash flow value


Intrinsic Value Based on Future Cash Flows

Headlam Group's share price is below the future cash flow value, and at a moderate discount (> 20%).

Headlam Group's share price is below the future cash flow value, but not at a substantial discount (< 40%).


Price Based on Earnings

Headlam Group is overvalued based on earnings compared to the Europe Retail Distributors industry average.

Headlam Group is good value based on earnings compared to the United Kingdom of Great Britain and Northern Ireland market.


Price Based on Expected Growth

Headlam Group is poor value based on expected growth next year.


Price Based on Value of Assets

Headlam Group is overvalued based on assets compared to the Europe Retail Distributors industry average.


Next Steps

Future Growth

How is Headlam Group expected to perform in the next 1 to 3 years based on estimates from 4 analysts?

5.3%

Forecasted annual earnings growth


Earnings and Revenue Growth Estimates


Future Annual Growth Analysis

Headlam Group's revenue is expected to grow by 1.4% yearly, however this is not considered high growth (20% yearly).

Headlam Group's earnings are expected to grow by 5.3% yearly, however this is not considered high growth (20% yearly).

Headlam Group's revenue growth is positive but not above the United Kingdom of Great Britain and Northern Ireland market average.

Headlam Group's earnings growth is positive but not above the United Kingdom of Great Britain and Northern Ireland market average.

Headlam Group's earnings growth is expected to exceed the low risk savings rate of 1.2%.


Earnings per Share Growth Estimates


Future Return on Equity

Headlam Group is not expected to efficiently use shareholders’ funds in the future (Return on Equity less than 20%).


Next Steps

Past Performance

How has Headlam Group performed over the past 5 years?

9.4%

Historical annual earnings growth


Earnings and Revenue History


Past Earnings Growth Analysis

Headlam Group's year on year earnings growth rate has been positive over the past 5 years.

Headlam Group's 1-year earnings growth is less than its 5-year average (2.3% vs 9.4%)

Headlam Group's earnings growth has exceeded the Europe Retail Distributors industry average in the past year (2.3% vs -2.9%).


Return on Equity

Headlam Group has not efficiently used shareholders’ funds last year (Return on Equity less than 20%).


Return on Assets

Headlam Group used its assets more efficiently than the Europe Retail Distributors industry average last year based on Return on Assets.


Return on Capital Employed

Headlam Group's use of capital deteriorated last year versus 3 years ago (Return on Capital Employed).


Next Steps

Financial Health

How is Headlam Group's financial position?


Financial Position Analysis

Headlam Group is able to meet its short term (1 year) commitments with its holdings of cash and other short term assets.

Headlam Group's cash and other short term assets cover its long term commitments.


Debt to Equity History and Analysis

Headlam Group's level of debt (12.4%) compared to net worth is satisfactory (less than 40%).

The level of debt compared to net worth has been reduced over the past 5 years (16.9% vs 12.4% today).

Debt is well covered by operating cash flow (211.3%, greater than 20% of total debt).

Interest payments on debt are well covered by earnings (EBIT is 28.6x coverage).


Balance Sheet

High level of physical assets or inventory.

Debt is covered by short term assets, assets are 11.6x debt.


Next Steps

Dividend

What is Headlam Group's current dividend yield, its reliability and sustainability?

5.87%

Expected Dividend Yield


Upcoming Dividend Payment

Purchase Headlam Group before the 'Buy Limit' to receive their next dividend payment.


Dividend Yield and Payments Analysis

Headlam Group's pays a higher dividend yield than the bottom 25% of dividend payers in United Kingdom of Great Britain and Northern Ireland (2.03%).

Headlam Group's dividend is above the markets top 25% of dividend payers in United Kingdom of Great Britain and Northern Ireland (5.49%).

Dividends per share have been volatile in the past 10 years (annual drop of over 20%).

Dividends per share have increased over the past 10 years.


Current Payout to Shareholders

Dividends paid are covered by earnings (1.6x coverage).


Future Payout to Shareholders

Dividends after 3 years are expected to be covered by earnings (1.6x coverage).


Next Steps

Management

What is the CEO of Headlam Group's salary, the management and board of directors tenure and is there insider trading?

2.3yrs

Average management tenure


CEO

Steve Wilson (64yo)

3yrs

Tenure

UK£685

Compensation

Mr. Stephen Graham Wilson, also known as Steve, BSc., FCA, has been Chief Executive Officer of Headlam Group Plc since September 14, 2016. Mr. Wilson served as Finance Director of Headlam Group PLC from De ...


CEO Compensation Analysis

Steve's remuneration is lower than average for companies of similar size in United Kingdom of Great Britain and Northern Ireland.

Steve's compensation has been consistent with company performance over the past year, both up more than 20%.


Management Age and Tenure

2.3yrs

Average Tenure

46.5yo

Average Age

The tenure for the Headlam Group management team is about average.


Board Age and Tenure

1.4yrs

Average Tenure

60yo

Average Age

The average tenure for the Headlam Group board of directors is less than 3 years, this suggests a new board.


Insider Trading

No 3 month open market individual insider trading information.


Ownership Breakdown


Management Team

  • Steve Wilson (64yo)

    CEO & Director

    • Tenure: 3yrs
    • Compensation: UK£685.00
  • Catherine Miles

    Director of Communications

    • Tenure: 2.7yrs
  • Sue LaVerne

    People Director

    • Tenure: 1.9yrs
  • Sarah Ward

    Company Secretary & Legal Counsel

    • Tenure: 1.7yrs
  • James Kellett (46yo)

    Managing Director of Mercado

    • Tenure: 3.7yrs
  • Adrian Laffey (47yo)

    Managing Director of Mercado

    • Tenure: 3.7yrs
  • Chris Payne (46yo)

    CFO & Executive Director

    • Tenure: 2.1yrs
    • Compensation: UK£373.00
  • Karen Atterbury

    Company Secretary

    • Tenure: 0.7yrs

Board Members

  • Keith Edelman (69yo)

    Senior Independent Director

    • Tenure: 0.7yrs
    • Compensation: UK£11.00
  • Steve Wilson (64yo)

    CEO & Director

    • Tenure: 3yrs
    • Compensation: UK£685.00
  • Philip Lawrence

    Non-Executive Chairman

    • Tenure: 1.3yrs
    • Compensation: UK£102.00
  • Chris Payne (46yo)

    CFO & Executive Director

    • Tenure: 2.1yrs
    • Compensation: UK£373.00
  • Amanda Aldridge (56yo)

    Independent Non-Executive Director

    • Tenure: 1.6yrs
    • Compensation: UK£46.00
  • Alison Littley

    Independent Non-Executive Director

    • Tenure: 0.7yrs

Company Information

Headlam Group plc's company bio, employee growth, exchange listings and data sources


Key Information

  • Name: Headlam Group plc
  • Ticker: HEAD
  • Exchange: LSE
  • Founded: 1992
  • Industry: Distributors
  • Sector: Retail
  • Market Cap: UK£365.498m
  • Shares outstanding: 84.02m
  • Website: https://www.headlam.com

Number of Employees


Location

  • Headlam Group plc
  • Gorsey Lane
  • Coleshill
  • Birmingham
  • West Midlands
  • B46 1LW
  • United Kingdom

Listings

TickerExchangePrimary SecuritySecurity TypeCountryCurrencyListed on
HEADLSE (London Stock Exchange)YesOrdinary SharesGBGBPJan 1992
HEADLBATS-CHIXE (BATS 'Chi-X Europe')YesOrdinary SharesGBGBPJan 1992

Biography

Headlam Group plc, through its subsidiaries, sells, markets, supplies, and distributes floorcovering and other ancillary products. The company’s products include floorcovering products comprising carpet, r ...


Company Analysis and Financial Data Status

All financial data provided by Standard & Poor's Capital IQ.
DataLast Updated (UTC time)
Company Analysis2019/09/18 20:33
End of Day Share Price2019/09/18 00:00
Earnings2019/06/30
Annual Earnings2018/12/31


Unless specified all financial data is based on a yearly period but updated quarterly. This is known as Trailing Twelve Month (TTM) or Last Twelve Month (LTM) Data. Learn more here.