PBT FY21E “marginally ahead of current market expectations” - we had upgraded by 17%+ in Jul’21 (see here) - while revenue is “tracking broadly in line with current market expectations”. “A robust performance in the residential sector has helped to offset a persisting subdued commercial sector, with other features of the market being the ongoing industry wide supply issues, and associated inflationary pressures, all of which the Company has been largely able to mitigate. Profit performance has been pleasing and reflects the previous and ongoing actions to improve operating efficiency and margin. As a consequence, the Company expects to deliver underlying profit before tax for the year ending 31 December 2021 marginally ahead of current market expectations”. Changes to forecasts: we leave forecasts unchanged at this time. ESG update: Headlam outlines details of actions in each of the three constituent ESG areas, such as a 9%+ reduction in fleet numbers and making half of the non-commercial fleet plug-in hybrids by 2022, plus many other initiatives. Valuation and catalysts: The shares have underperformed in recent months, leaving considerable upside to our unchanged TP of 620p. We expect that the ongoing robustness of the Residential market, and the marked difference in valuation with Victoria Carpets (VCP.L, trading on a significantly higher CY22E PE of 24x based on FactSet consensus), should see this gap close in due course. Pre-close trading update on 27 Jan’22. Prelims “early March 2022”.