Shares in Headlam Group (LSE:HEAD) slumped 16% to 47.89p after the UK floor coverings distributor warned that trading had fallen short of expectations and full-year results would come in below forecasts.
The company said revenue for the four months to the end of October was down 5% on last year, reflecting what it called “challenging market dynamics and execution.”
The update follows a cautious outlook in September’s interim results, but the latest figures confirm a sharper downturn in demand across its core markets.
In response, Headlam’s board has launched a wide-ranging restructuring programme aimed at cutting costs and improving operations.
The plan, which will be outlined in more detail next week, includes measures to streamline the business and restore profitability even if trading conditions remain weak.
The group also said it is exploring further property disposals to bolster its balance sheet.
Despite the current headwinds, management expressed confidence that the combination of cost reductions, efficiency improvements and its established market position would leave the business better placed once the sector stabilises.