Headlam Regulatory News (HEAD)

18 May 2012

Interim Management Statement

Headlam Group plc ("Headlam"), Europe's leading floorcoverings distributor, announces its Interim Management Statement for the period from 1 January 2012 to 30 April 2012.

During the four months to 30 April 2012, the group continued to make further progress increasing its revenue by 5.0%.

Businesses in the UK continue to grow market share, with absolute revenue increasing by 7.5% and underlying like for like performance improving by 4.9%.

Revenues from our Continental European businesses measured in constant currency, reduced by 3.9%. On translation, this reduction increased to 6.4% due to the rising strength of sterling, compared with the euro and Swiss franc, over the four month period.

The competitive nature of the UK market has continued to intensify during the period whilst on the Continent, notwithstanding the contraction in revenue, our businesses have achieved a slight improvement in gross margin performance.

As a consequence of the increasing competition in the UK, the group's gross margin has declined during the first four months compared with the equivalent period last year. We anticipate this softening to continue during May and June resulting in a gross margin for the first six months down on last year by approximately 50 basis points.

With the exception of the refinancing of the group's term facility, which occurred in March, there has been no significant change in the group's financial position since 31 December 2011.

Tony Brewer, Headlam's Group Chief Executive, said:

"The trading trend highlighted in March 2012, in conjunction with the release of the 2011 full year results, has been maintained with the UK continuing to make progress on last year.

Whilst markets remain challenging and increasingly competitive, at this stage of the year, we remain confident that our businesses will continue to outperform the market"

End

Enquiries:

Headlam Group plc

Tony Brewer, Group Chief Executive Tel: 01675 433000

Stephen Wilson, Group Finance Director