Headlam Regulatory News (HEAD)

25 May 2017

Headlam Group plc

('Headlam' or the 'Company')

AGM Trading Update

Headlam Group plc (LSE: HEAD), Europe's largest distributor of floorcoverings, is pleased to provide a trading update ahead of its Annual General Meeting ('AGM') being held later today.

Total revenue for the first four months of the year to 30 April 2017 was £221.2 million, up 2.2% compared with the same period in the prior year, with growth in both the UK and Continental Europe.

The UK accounted for 86.0% of total revenue in the four months (corresponding period 2016: 87.3%), and UK like-for-like revenue* growth was 1.9%, an uplift on the strong comparable of 4.0% growth in the same period in the prior year. Both the residential and commercial sectors showed a positive performance, up 2.0% and 1.6% respectively.

Continental Europe, which accounted for 14.0% of total revenue in the four months, showed like-for-like revenue* growth of 3.0%. Very strong residential sector growth of 9.3% offset a decline of 3.5% within the commercial sector, with the performance of the Swiss business being the primary reason for the commercial sector decline.

In April 2017, the Company acquired the assets of McMillan Flooring Distributors Limited based in Scotland bringing the Company's total number of businesses to 61. The acquisition, with locations in Edinburgh and Glasgow, establishes a presence for Headlam in Edinburgh whilst allowing the expansion and linking of operations in Glasgow.

May 2017 is performing to expectations, and the Company continues to trade in-line with the Board's expectations for the full year.

* Like-for-like revenue is calculated based on constant currency from activities and businesses that made a full contribution in both the 2017 and 2016 periods and is adjusted for variances in working days

Enquiries:

Notes for Editors:

Headlam is Europe's largest distributor of floorcoverings having grown significantly via organic growth and acquisition since 1992.

Headlam provides the distribution link between suppliers and customers of floorcoverings, providing suppliers with the greatest coverage and customer penetration for their products across the UK and Continental Europe, and customers with the broadest range of products supported by next day delivery.

The Company is engaged with suppliers across 16 countries whose products cover a significant proportion of the floorcoverings market (including carpet, residential vinyl, wood, laminate, luxury vinyl tile, underlay and commercial flooring). The Company's customers are within the residential and commercial sectors and comprise principally independent retailers and flooring contractors.

The Company currently comprises 61 wholly-owned businesses in the UK and Continental Europe each operating under their own trade brand and utilising their individual sales team which achieves a greater reach into the customer base.

Each of the businesses is supported by the Company's centralised and financial resources and extensive distribution network across the UK and Continental Europe that comprises four distribution hubs, 18 distribution centres, 55 service centres and a corporate showroom.