AIM-listed firm has re-raised its preliminary guidance following strong Q4
Companies: Headlam Group plc
Just six weeks after telling investors that it would beat expectations in its prelims, AIM-listed Headlam Group Plc has said it will beat its revised guidance, too.
On 1 December, the Group told investors that it expected to report prelim results ahead of consensus. Since then, the firm says it has continued to enjoy better than expected trading and as such has decided to re-raise its guidance.
Total revenue for FY16 was up 6% compared to 2015, with roughly 4.5% in constant currency. Growth came primarily from the UK, where Headlam gets 88% of its revenues, which increased 4.7% on a like-for-like basis.
Continental Europe, which contributed the final 12% of total revenue, increased 3.6% in constant currency, a markedly different picture to the 3.8% decline in 2015.
Broker Zeus Capital welcomed the update and raised its FY17 forecasts by c.2%:
"Revenue forecasts increase slightly, c. 1.0%, in FY16 to £693.5m (prev. £689.0m), showing 6% yoy growth (FY15: £654.1m). This is magnified at the operating level due to the August price increase in the UK leading us to increase margin assumptions at the operating level by 30bps. As a result, PBT increases 7.0% to £40.1m (prev. £37.5m) and equates to c. 13% yoy growth."
Zeus analyst Andy Hanson said that despite wider equity markets remaining buoyant, Headlam shares are only up 2% since the December increase. He said Headlam should be appealing considering its best in class performance during the year.
Headlam shares opened up 7% on Thursday.