Share picker demand for Headlam (LSE: HEAD) remained broadly stagnant in Thursday trading despite the release of excellent trading numbers.
This does not surprise me however, given the mighty share price rises of recent months. Headlam has gained almost a third in value since the turn of the year, and it is not difficult to see why as demand for its goods explodes across Europe.
The floor coverings specialist advised today that revenue for the first four months of 2017 came in at £221.2m, up 2.2% from the corresponding period of 2016.
Headlam saw sales continue to grow both at home and abroad. In the UK like-for-like revenues rose 1.9%, an impressive performance given the strong comparatives of January-April last year (sales moved 4% higher back then).
The Birmingham firm’s domestic division — responsible for almost nine-tenths of total sales — saw sales continue to pound higher from both the residential and commercial sectors. Sales to these sub-segments rose 2% and 1.6% respectively.
Meanwhile on the continent, Headlam saw underlying sales rise 14% in the four month period, with strong residential growth offsetting a fall in commercial sales.
Walking on sunshine
I am convinced a robust construction sector on both sides of the Channel should keep Headlam’s top line ticking higher. And the company’s ability to keep revenues rising despite price hikes to mitigate the falling pound underpins my optimistic take.
The City certainly believes Headlam has the tools to keep earnings moving higher, and a predicted 14% rise would keep its long record of double-digit rises in business.
And this bubbly bottom-line picture is expected to keep dividends growing at a terrific rate too. The number crunchers predict a reward of 29.2p per share in 2017, up from 22.55p last year and yielding a market-beating 4.6%.
Looking further out, an anticipated 32.6p per share dividend for next year yields an astonishing 5.1%.
Box up a beauty
Expectations of further earnings growth at Tritax Big Box (LSE: BBOX) are expected to lead to increasingly-chunky dividends here too.
The real estate investment trust (or REIT), like its industry peers, is required to return 90% of all earnings to shareholders in the form of dividends. And with the bottom line expected to swell an extra 9% in 2017, a dividend of 6.4p per share is predicted, up from 6.16p last year. This figure yields a blockbuster 4.4%.
The good news does not stop here, either, with estimates of a 6.6p payout in 2018 (supported by an anticipated 4% earnings advance) nudging the yield to 4.5%. And I expect dividends to continue flowing higher in line with earnings.
Tritax Big Box’s focus on warehouses and distribution centres puts it in the box seat to ride the e-commerce juggernaut, while its hunger for acquisitions should also keep delivering delicious shareholder rewards (just this month Tritax shelled out £20.9m for a distribution base in Doncaster run by consumer goods giant Unilever).