Headlam sells Tamworth distribution centre for £21.75m

(Sharecast News) - Headlam Group announced the sale of its Tamworth distribution centre for £21.75m on Monday, as part of its ongoing transformation plan, entering into a leaseback arrangement to retain use of the site for at least the next decade. The London-listed firm said the sale represented a significant uplift in value, with the price 153% above the centre's book value of £8.6m and 43% above its most recent market valuation of £15.2m.

It said the resulting profit would be recognised as non-underlying income.

Despite the disposal, the Tamworth site remained a key part of Headlam's UK logistics network.

The company said it had agreed to lease back the facility for 10 years, with an option to extend.

Headlam said the lease cost was in line with its current cost of debt, making the transaction broadly neutral to its underlying profit before tax.

Of the £21.75m in proceeds, £21.1m had been received in cash following simultaneous exchange and completion, with a further £0.7m to be paid once Headlam completes agreed repairs and maintenance.

The funds would initially be used to reduce drawings on the group's revolving credit facility, increasing liquidity as the transformation plan progresses.

Headlam said it was planning to issue a pre-close trading update on Tuesday.

At 0950 BST, shares in Headlam were up 0.88% at 86.76p.

Reporting by Josh White for Sharecast.com.