Headlam Group (LSE:HEAD), the UK's largest floor coverings distributor, said trading remains challenging but July revenue is running roughly 3.5% ahead of June.
The update follows the strategic review launched on 14 July, which the board and its advisers are conducting at pace to shore up the Group's finances.
Headlam has decided to keep its Coleshill headquarters as one of its key freehold properties, dropping the previously flagged sale and leaseback of the site.
The Group's refinancing process has progressed to the point of receiving financing offers that would, on currently proposed terms, provide additional liquidity.
Headlam cautioned there is no certainty it will implement these or any alternative options within a reasonable timeframe, or at all.
The board believes a strengthened balance sheet would ease the liquidity pressures currently limiting its ability to trade effectively, buying time to execute its strategic plan and return the Group to profitability and cash generation.
The review also continues to weigh further lender support, additional property disposals, a broader group refinancing and new partnerships.
News Intelligence what this means for the company
Headlam has scrapped a planned sale-leaseback of its Coleshill HQ and is instead pursuing refinancing options that have begun to yield lender offers for additional liquidity. The move signals a shift in strategy within the ongoing financial review launched in July, though the company explicitly warns there is no certainty these offers will be implemented. With net debt at £36.2m against H1 2026 revenues of £188.8m and a 22.8% year-on-year revenue decline, the refinancing is aimed at easing liquidity constraints that are currently limiting trading capacity.
Retaining the freehold rather than monetizing it via sale-leaseback suggests Headlam views the property as strategically valuable and prefers to preserve optionality; however, the absence of certainty around implementation and the company's continued reliance on lender support underscores the fragility of its position. The modest July revenue improvement (3.5% month-on-month) does not yet signal a turnaround in the underlying 22.8% H1 decline.
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