Floorcoverings distributor Headlam has announced that as part of its continued progress against its previously announced transformation plan, it has sold properties for a total of £53.9 million (excluding VAT).
These sales represent a premium of 64% to book value and 14% to the last market valuation of £47.1 million. Collectively these properties had a book value of £32.9 million and, as a result, a substantial profit will be generated on the sales; this will be recognised as non-underlying income.
The sale of these properties forms part of the Group’s strategic initiative to optimise its network, reinforcing its market-leading customer service and driving improved operational efficiency. Following exchange and simultaneous completion of the sales, the aggregate proceeds have been received in cash and the Group is now in a net cash position and continues to have an extensive property portfolio valued at £95.0 million.
The property sales arise from two separate transactions:
i. The sale of the Ipswich, Gildersome and Leeds properties for £50.9 million. Following operational improvements, the Ipswich property has become surplus to requirements and will be fully vacated by the Group after completing the relocation to the new distribution centre in Rayleigh in Q1 2025. The Group has agreed a leaseback arrangement in relation to the Gildersome and Leeds properties.
ii. The sale of the Uddingston property, which had also become surplus to requirements, for £3.1 million on 11 December 2024. The property was last valued by the Group at £2.3 million.
The sale of the three properties (Ipswich, Gildersome and Leeds) to a single buyer constitutes a significant transaction under the Listing Rules. Further details in relation to the significant transaction are contained in the appendix to this announcement.
Commenting, Chris Payne, Chief Executive Officer, said: “These property transactions, on highly attractive terms, have been enabled by the progress we are making in optimising our operations, whilst also unlocking cash from our business, and further strengthening our balance sheet to re-invest in the Headlam proposition as the UK’s leading floorcoverings distributor.”
Furthermore, Headlam has confirmed that Keith Edelman has informed the Board of his intention to step down from his role as Chair of the Company.
Keith will support a managed transition to his successor, Stephen Bird, and will not seek re-election as a Director at the Company’s Annual General Meeting in May 2025.
Keith has been a Director of the Company for six years and the Board is grateful to Keith for his service as both Non-Executive Director and, latterly, as Chair, and wish him well for his future ventures.
The Board is pleased to announce that Stephen Bird will be appointed Chair of the Company and its Nomination Committee with effect from the Company’s AGM in May 2025, and Stephen will stand for re-election at the AGM in May 2025.
Stephen has extensive executive experience developing successful, customer-led growth strategies to help businesses grow and adapt to changing markets. He had been Group Chief Executive of Videndum plc since 2009 and recently stepped down from that role. Previously he was Senior Independent Director of Dialight plc and was Divisional Managing Director of Weir Oil & Gas. Stephen has also held senior roles at Danaher Corporation, Black & Decker, and Technicolor Group.
Chris Payne, Chief Executive Officer said “On behalf of the Board I would like to thank Keith for the extensive contribution he has made to the Company over the past six years, chairing the Board whilst we have made significant progress against our strategy and overseen our transformation plans. I’m pleased Stephen has agreed to be our next Chair and look forward to continuing to work with Stephen and the Board as we implement our transformation plan over the next two years”.
