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 average 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

5.4%

HEAD

5.7%

GB Retail Distributors

1.7%

GB Market


1 Year Return

0.3%

HEAD

10.5%

GB Retail Distributors

2.9%

GB Market

Return vs Industry: HEAD underperformed the UK Retail Distributors industry which returned 10.5% over the past year.

Return vs Market: HEAD underperformed the UK Market which returned 2.9% over the past year.


Shareholder returns

HEADIndustryMarket
7 Day5.4%5.7%1.7%
30 Day7.1%4.8%-0.7%
90 Day3.1%7.4%-1.8%
1 Year5.8%0.3%14.1%10.5%8.0%2.9%
3 Year12.5%-4.0%16.7%5.4%18.2%3.8%
5 Year52.6%18.8%39.1%20.2%35.6%6.1%

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 compared to its fair value and its price relative to the market?

14.3%

Undervalued compared to fair value


Share Price vs. Fair Value

Undervalued: HEAD (£4.66) is trading below our estimate of fair value (£5.44)

Significantly Undervalued: HEAD is trading below fair value, but not by a significant amount.


Price To Earnings Ratio

PE vs Industry: HEAD is poor value based on its PE Ratio (11.7x) compared to the Retail Distributors industry average (11x).

PE vs Market: HEAD is good value based on its PE Ratio (11.7x) compared to the UK market (16.7x).


Price to Earnings Growth Ratio

Low PEG Ratio: HEAD is poor value based on its PEG Ratio (2.2x)


Price to Book Ratio

PB vs Industry: HEAD is overvalued based on its PB Ratio (1.7x) compared to the XE Retail Distributors industry average (1.4x).


Next Steps

Future Growth

How is Headlam Group forecast 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 Forecasts


Analyst Future Growth Forecasts

Earnings vs Savings Rate: HEAD's forecast earnings growth (5.3% per year) is above the savings rate (1.2%).

Earnings vs Market: HEAD's earnings (5.3% per year) are forecast to grow slower than the UK market (12.9% per year).

High Growth Earnings: HEAD's earnings are forecast to grow, but not significantly.

Revenue vs Market: HEAD's revenue (1.4% per year) is forecast to grow slower than the UK market (3.9% per year).

High Growth Revenue: HEAD's revenue (1.4% per year) is forecast to grow slower than 20% per year.


Earnings per Share Growth Forecasts


Future Return on Equity

High Future ROE: HEAD's Return on Equity is forecast to be low in 3 years time (14.1%).


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

Earnings Trend: HEAD's earnings have grown by 9.4% per year over the past 5 years.

Accelerating Growth: HEAD's earnings growth over the past year (2.3%) is below its 5-year average (9.4% per year).

Earnings vs Industry: HEAD earnings growth over the past year (2.3%) exceeded the Retail Distributors industry -1.2%.


Return on Equity

High ROE: HEAD's Return on Equity (14.7%) is considered low.


Return on Assets

ROA vs Industry: HEAD has a higher Return on Assets than the Retail Distributors industry average last year.


Return on Capital Employed

ROCE Improving: HEAD's Return on Capital Employed has declined over the past 3 years.


Next Steps

Financial Health

How is Headlam Group's financial position?


Financial Position Analysis

Short Term Liabilities: HEAD's short term assets (£329.1M) exceeds its short term liabilities (£226.9M)

Long Term Liabilities: HEAD's short term assets (329.1M) exceeds its long term liabilities (79.1M)


Debt to Equity History and Analysis

Debt Level: HEAD's debt to equity ratio (12.4%) is considered satisfactory

Reducing Debt: HEAD's debt to equity ratio has reduced from 16.9% to 12.4% over the past 5 years.

Debt Coverage: HEAD's debt is well covered by operating cash flow (211.3%).

Interest Coverage: HEAD's interest payments on its debt are well covered by EBIT (28.6x coverage).


Balance Sheet

Inventory Level: HEAD has a high level of physical assets or inventory.

Debt Coverage by Assets: HEAD's debt is covered by short term assets (assets are 11.644210x debt).


Next Steps

Dividend

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

5.36%

Current Dividend Yield


Upcoming Dividend Payment

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


Dividend Yield vs Market

company5.4%marketbottom25%2.0%markettop25%5.4%industryaverage3.0%forecastin3Years5.5%

Current dividend yield vs market & industry


Stability and Growth of Payments

Notable Dividend: HEAD's dividend (5.36%) is higher than the bottom 25% of dividend payers in the UK market (1.99%).

High Dividend: HEAD's dividend (5.36%) is low compared to the top 25% of dividend payers in the UK market (5.41%).

Stable Dividend: HEAD's dividend payments have been volatile in the past 10 years.

Growing Dividend: HEAD's dividend payments have increased over the past 10 years.


Current Payout to Shareholders

Dividend Coverage: With its reasonable payout ratio (62.9%), HEAD's dividend payments are covered by earnings.


Future Payout to Shareholders

Future Dividend Coverage: HEAD's dividends in 3 years are forecast to be covered by earnings (62.6% payout ratio).


Next Steps

Management

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

2.4yrs

Average management tenure


CEO

Steve Wilson (64yo)

3.1yrs

Tenure

UK£685,000

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

Compensation vs. Market: Steve's total compensation ($USD881.74K) is about average for companies of similar size in the UK market ($USD875.32K).

Compensation vs Earnings: Steve's compensation has been consistent with company performance over the past year.


Management Age and Tenure

2.4yrs

Average Tenure

46.5yo

Average Age

Experienced Management: HEAD's management team is considered experienced (2.4 years average tenure).


Board Age and Tenure

1.5yrs

Average Tenure

60yo

Average Age

Experienced Board: HEAD's board of directors are not considered experienced ( 1.5 years average tenure), which suggests a new board.


Insider Trading

Insider Buying: Insufficient data to determine if insiders have bought more shares than they have sold in the past 3 months.


Ownership Breakdown


Management Team

  • Steve Wilson (64yo)

    CEO & Director

    • Tenure: 3.1yrs
    • Compensation: UK£685.00k
  • Catherine Miles

    Director of Communications

    • Tenure: 2.8yrs
  • Sue LaVerne

    People Director

    • Tenure: 2yrs
  • Sarah Ward

    Company Secretary & Legal Counsel

    • Tenure: 1.8yrs
  • James Kellett (46yo)

    Managing Director of Mercado

    • Tenure: 3.8yrs
  • Adrian Laffey (47yo)

    Managing Director of Mercado

    • Tenure: 3.8yrs
  • Chris Payne (46yo)

    CFO & Executive Director

    • Tenure: 2.2yrs
    • Compensation: UK£373.00k
  • Karen Atterbury

    Company Secretary

    • Tenure: 0.8yrs

Board Members

  • Keith Edelman (69yo)

    Senior Independent Director

    • Tenure: 0.8yrs
    • Compensation: UK£11.00k
  • Steve Wilson (64yo)

    CEO & Director

    • Tenure: 3.1yrs
    • Compensation: UK£685.00k
  • Philip Lawrence

    Non-Executive Chairman

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

    CFO & Executive Director

    • Tenure: 2.2yrs
    • Compensation: UK£373.00k
  • Amanda Aldridge (56yo)

    Independent Non-Executive Director

    • Tenure: 1.7yrs
    • Compensation: UK£46.00k
  • Alison Littley

    Independent Non-Executive Director

    • Tenure: 0.8yrs

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£391.593m
  • Shares outstanding: 84.03m
  • 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 Analysis2019/10/18 20:32
End of Day Share Price2019/10/18 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.