Headlam Group plc (LSE:HEAD) has completed the sale and leaseback of its Bristol distribution centre for £3.15 million, with the proceeds to be used to repay debt.
The sale price represents a 50% premium to the property’s book value and is also above its most recent independent valuation.
Headlam will continue to operate from the Bristol site, which remains a core distribution hub, under a short-term lease running until the end of 2026.
The transaction was unanimously approved by the company’s board.
Transaction to Result in One-Off Profit
Headlam said the disposal will result in a one-off profit and reduce debt on its balance sheet. The leaseback arrangement will also result in the recognition of a new lease liability.
The company described the transaction as part of its efforts to establish a more sustainable financial platform. Trading in Headlam’s shares is currently suspended.
The disposal is classified as a significant transaction under the UK Listing Rules because of its impact on the group’s assets and capital structure.
The board said it considers the £3.15 million consideration fair and believes the transaction is in the interests of shareholders.
Headlam also identified customary contractual and lease-related risks associated with the transaction, as well as the potential for share-price volatility if trading in its shares resumes.
More about Headlam Group plc
Headlam Group plc is a UK distributor of floor coverings serving residential and commercial markets.
The company distributes flooring products through a network of distribution centres and trade counters, supplying retailers, contractors and other trade customers across the UK.
Its operations include nationwide logistics and distribution services connecting flooring manufacturers and suppliers with customers in the residential and commercial markets.
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