LONDON Dec 1 British carpet distributor Headlam
said full-year profit should beat current market
expectations as price rises introduced after the pound fell in
the wake of the Brexit vote had not had an adverse impact on
Shares in the firm, which supplies independent floorcovering
retailers and contractors, rose by as much as 5.6 percent in
early trade on Thursday.
In August Headlam increased prices on residential
floorcoverings imported from continental Europe by 3.5 percent
on average to cover the pound's fall against the euro.
"The price increases ... have remained in place since their
introduction in August and, pleasingly, appear to have had no
adverse impact on residential sector revenue," the firm said.
"As a result of this, and due to continued volatility in
foreign exchange rates, it is the company's intention to keep
these price increases in place going forward."
Headlam said it has continued to experience no discernible
impact on trading following the EU referendum in June, although
August was slightly weaker than expected because of a softer
commercial market in Britain.
Consumer spending in Britain has held up since the Brexit
vote. However, the Bank of England and many economists fear
higher prices caused by the Brexit hit to the value of the pound
and slower jobs growth will eat into households' purchasing
power next year.
For the 10 months to Oct. 31 Headlam's total revenue was up
5.2 percent year-on-year. UK revenue accounted for about 88
percent of the total.
UK like-for-like revenue in the second half of the year to
Oct. 31 was up 4.8 percent. Trading during November maintained
Revenue from the company's continental European businesses
grew 2.6 percent over the 10 months when measured in constant
"Subject to trade continuing as anticipated during the
remaining important weeks of the year, the company expects to
report preliminary results (for 2016) before non-recurring items
ahead of current consensus market expectations," it said.
Prior to Thursday's update analysts were on average
forecasting a pretax profit of 37 million pounds ($46.4
million), up from 36 million pounds in 2015.
Shares in Headlam were up 4 percent at 492 pence at 0936
($1 = 0.7978 pounds)
(Reporting by James Davey; Editing by Susan Fenton)