Shares in Headlam Group PLC (LON:HEAD) headed towards the ceiling on Friday after the floor coverings distributor confirmed it had made a “pleasing” start to the year.
Sales in the opening four months of 2019 were 5.5% higher than the same period of last year, with like-for-likes rising 3.5%.
READ: Headlam shares floored by profit warning
The company, said the UK commercial sector was “notably strong”. Across the Channel in continental Europe, the residential sector was once again “the much stronger performer”.
Full-year expectations remain unchanged, with bosses still forecasting a slight dip in profits this year due to higher costs.
Headlam, which takes carpets and laminate floors from manufacturers and ships them to trade customers, is building a new regional distribution hub in Ipswich.
Work is progressing to schedule and the new centre is expected to open in the middle of next year.
Looking ahead, Headlam will issue a trading update on 24 July ahead of its half-year results which are due to be published at the end of August.
Performance ‘bodes well’ for rest of year
City broker Peel Hunt has upped its target price for Headlum to 450p (from 400p), citing a “more stable trading background and potential for improvement in numbers”.
“Like-for-like sales in the UK improved by 3.1% in the four months to end of April, which is comfortably ahead of FY expectations of a slight decline,” said analysts, who repeated their ‘hold’ recommendation.
“Clearly weather has been helpful and comps are relatively easy, however this bodes well for the full-year outcome.”
Shares rose 4% to 475p on Friday morning.
--Updates for analyst comment and share price--