Brokers' view: Arden Partners

Ben Thefaut of Arden is a fan of floorings group Headlam. The company issued a trading update in which it noted that UK revenues were ahead 5.8 per cent in 2011 with a 3.9 per cent rise for the group as a whole.

He argues the company’s strong business model ‘reflects the relative health of the independent UK flooring retail sector’ noting that its ‘multiple channels’ and ‘wide portfolio’ of goods including carpet, vinyl, laminate and wood is helping to ‘drive market share’. Rating the shares as a buy, pre-tax profits of £26 million (2010: £25 million) are pencilled in for the year to December 2011 on sales up £8 million to £544 million.

Team rate precision

Chris Thomas and David Larkam rate precision control maker Spectris. The fully-listed group issued a trading update declaring that sales had grown 5 per cent in its first half, with the team enthusing that the growth ‘has been across all segments, geographic regions and end markets’ with the strongest expansion taking place in ‘materials analysis and test & management’.

They argue that ‘organic growth cannot be sustained at current levels’ but a ‘strong balance sheet’ and cash generation creates ‘significant potential to supplement slowing organic growth with earnings enhancing acquisitions’.