Sale and leaseback of Bristol distribution centre

Headlam Group PLC

08 September 2026

 

8 September 2026

Headlam Group plc

('Headlam', the 'Company', the 'Group')

Sale and leaseback of Bristol distribution centre

Headlam (LSE: HEAD), the UK's leading floor coverings distributor, is pleased to confirm that as part of its strategic review, it has completed the sale and leaseback of its Bristol distribution centre property (the "Disposal").

The sale proceeds of £3.15 million (excluding VAT¹) represent a premium of 50% to the book value of £2.1 million and 13.7% to the last market valuation² of £2.775 million.

The Bristol distribution centre remains a core part of Headlam's distribution network and therefore trading continues as usual following the sale. The Bristol Trade Counter will also remain operational. The Group has entered into a leaseback until 31 December 2026.

£3.15 million of the sales proceeds (excluding VAT) have been received in cash following simultaneous exchange and completion. The net sale proceeds will be used to repay existing debt after deducting part of the proceeds to fund the upfront leaseback costs for one month during the restructuring period as Headlam seeks to establish a more sustainable platform for the future.

This sale constitutes a significant transaction under the Listing Rules; accordingly, further details are contained in the appendix to this announcement.

Footnotes

^1.   VAT of £630,000 has been collected on this sale and will be paid over to HM Revenue & Customs at the next VAT quarter end payment date.

^2.   As at the market valuation undertaken in December 2025.

Enquiries Headlam Group plc Tel: [phone] Rob Barclay, Chief Executive Officer [e-mail] Richard Jones, Interim Chief Financial Officer Alison Hughes, General Counsel & Company Secretary Panmure Liberum Limited (Corporate Broker) Tel: [phone] Tom Scrivens / Amrit Mahbubani Alma Strategic Communications Tel: [phone] Rebecca Sanders-Hewett, Hannah Campbell, Anna Sutton [e-mail] Interpath Ltd                                                         Katy Broomhead / Alastair Henry     Tel: [phone] [e-mail]

Appendix

On 7 September 2026, the Group completed the sale of its Bristol property to EPIC STAUNTON LLP for £3.15 million plus VAT, which constitutes a significant transaction under the Listing Rules. This footnote, together with the main body of the announcement, sets out the further information that is required to be disclosed. (A) Material Contracts - The sale agreement between the Group and EPIC STAUNTON LLP is subject to standard commercial property terms and there are no conditions outstanding.  At the same time, the Group also entered into a short leaseback agreement for the Bristol property with the new buyer until 31 December 2026 at a market rate rent, (the lease is contracted outside the Landlord and Tenant Act 1954 and has customary provisions dealing with removing the Group's fixtures and fittings and making good any applicable dilapidations on expiry of the lease).  (B) Risks - Headlam shareholders should carefully consider, together with all other information contained in this announcement, the specific factors and risks described below. The Company considers these to be the known material risk factors relating to the significant transaction. There may be other risks of which the Board is not aware or which it believes to be immaterial which may be connected to the transaction and have a material and adverse effect on the business, financial condition, results of operations or future prospects of the Group.   The risks disclosed below are those which the Company considers: (i) are material risks related to the transaction; (ii) will be material new risks to the Group as a result of the transaction; or (iii) are existing material risks for the Group which will be impacted by the transaction. The risks described below are not set out in any order of priority, assumed or otherwise: (i) The Group may incur liability under the sale contract and the leaseback agreement; (ii) The sale contract is based on standard commercial property contract terms and also includes customary provisions. Both the Group and EPIC STAUNTON LLP carried out a customary due diligence and disclosure process to minimise the liability under these provisions; (iii) The short lease agreement is based on customary provisions and dealing with removing the Group's fixtures and fittings and making good any applicable dilapidations on expiry of the lease; (iv) Notwithstanding that the shares of the Company are currently suspended from trading until further notice, if any shares are traded in future: (a) the price of shares in the Group may fluctuate on the basis of market sentiment surrounding the transaction; and (b) the price at which investors may realise their shares (which is influenced by a number of factors, some specific to the Group and its operations and some which may affect flooring distributors or publicly traded or other comparable companies) may include the sentiments of the market regarding the transaction.  (C) Impact of the transaction on the Company's earnings, assets and liabilities - The Group has de-recognised the £2.1 million book value for the Bristol property from its balance sheet and recognised the receipt of £3.15 million (excluding VAT) for both properties less costs associated with the transaction, plus a further £630,000 of cash collected in respect of VAT to be paid over to HM Revenue & Customs in the next quarterly VAT payment. The Group will use the cash proceeds to repay existing debt after deducting costs and part of the proceeds to fund the upfront leaseback costs for one month, and a profit on disposal of the property will be recognised. The amount of profit on disposal is subject to the accounting requirements of IFRS16 with regard to sale and leaseback transaction and will be calculated prior to finalising, and subsequently disclosed within, the Group's results for the year ended 31^st December 2026.  The profit on the disposals will be classified as a non-underlying item in the Group's income statement due to its size and one-off nature.  A right-of-use asset and lease liability will be recognised on the Group's balance sheet in respect of the property being leased back. These amounts will be calculated prior to finalising, and subsequently disclosed within, the Group's results for the year ended 31^st December 2026.  (D) Use of proceeds - The net proceeds will be used to repay existing debt after deducting part of the proceeds to fund the upfront leaseback costs for one month.  (E) Additional Disclosures - The Board of the Company unanimously voted in favour of the transaction and in its opinion the transaction is in the best interests of the Company's shareholders as a whole, as well as its colleagues, suppliers and customers.  This assessment is on the basis of the transaction further strengthening the Group's financial position.  There are no related party transactions or legal and arbitration proceedings to disclose.  The information required by UKLR 7, Annex 2.2(2) and 2.2(3) is not available.  The value of the consideration for the disposal of the Bristol property compares with the last market property valuation (carried out by a third-party property valuation company) for the Bristol property of £2.775 million, as referenced above. A profit on sale will be generated, which will be recognised as non-underlying income.  As such, the Board considers the consideration for the Bristol property is fair as far as the shareholders of the Group are concerned.

Unless otherwise stated, all financial information relating to the Group disclosed in this announcement has been extracted, without material adjustment, from the Group's audited accounts.

 

END