LONDON (ShareCast) - (ShareCast News) - Shares in Headlam Group were up after the floor coverings distributor posted a 15% rise in first half profits.
At 1126 BST shares in the London listed company were up by 3.59%.

Headlam posted a pre-tax profit of £12.3m, up from £10.6m, on revenues up 4% to £313.5m from £301.6m.

The company said it expected to announce full-year results "slightly ahead" of the board's internal expectations.
Increased consumer confidence led to a rise in UK sales, which was Headlam's biggest market. The company noted slightly stronger growth in commercial sales versus residential.

During 2015 the company had purchased Matty's Wholesale Carpets, which it said was contributing positively to earnings.
Earnings per share were up 14.7% to 11.7p, from 10.2p.

The board recommended an interim dividend of 6p, up 15.4% from 5.2p the year prior.

Headlam said the positive first half results continued into the first eight weeks of the second half.

"Subject to the important final quarter of the year, the group expects to announce results for the full year to 31 December 2015 slightly ahead of the board's internal expectations," the company said in a statement.

Investec, which initiated coverage on the stock at 'buy', said the company was under the radar of most investors.
A price target of 570p was justified by an improving market outlook and consolidation opportunities.

"Whilst headline growth in revenues and EPS has proved resilient against a challenging market backdrop, we believe the group has the potential to accelerate this growth. One of the main drivers should be the operational gearing potential into the market recovery, as distribution costs begin to plateau," Investec said in a note to clients.

Headlam is a somewhat unique proposition as it has no directly comparable peers, Investec said.

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