Headlam Regulatory News (HEAD)

19 Nov 2009 07:00



19 November 2009

Interim Management Statement 

Headlam Group plc ("Headlam"), Europe's leading floorcoverings distributor, announces its Interim Management Statement for the period from 1 January 2009 to date.

Revenues for the ten months to 31 October

Total group revenue for the ten month period to 31 October reduced by 5.9%. UK like for like revenues reduced by 7.5% compared with the absolute reduction of 8.4% due to two less working days in 2009 compared with the same period in 2008. Revenues from our Continental European businesses declined by 10.0% on a like for like basis but currency effects and the contribution from Silvester, the Dutch residential business acquired in October 2008, lifted the overall performance to an increase of 5.9%.

Markets in the UK and Continental Europe remain challenging but trading in the UK, since June 2009, has shown an improving trend. Like for like revenues for the UK during the four month period to 31 October 2009 are down 3.0% compared with the previous period in 2008 with revenues for October 2009, showing positive like for like growth compared with October 2008. This compares with a like for like performance in the UK during the first six months of 2009, which showed a reduction of 10.7%. This improving trend is in part attributable to the softer 2008 second half comparatives but also, we believe, the contraction in market size, which appears to be slowing and perhaps beginning to stabilise at a new reduced base.

On the Continent, our business in France has seen a modest improvement over the last four months compared with the first six months of the year whereas our businesses in the Netherlands and Switzerland have experienced a continued contraction in trading. Excluding currency and acquisition affects, this has lead to like for like revenues for our Continental businesses decreasing by 10.5% during the last four months compared with a reduction of 9.7% during the first six months of 2009.

As described previously, the group's gross margin continues to be affected adversely by the change in product mix. Subject to any further changes in product mix and inflationary increases caused by currency and raw materials, we do not expect gross margins to change significantly over the medium term.

Outlook

Trading during November to date, in the UK, appears to be a continuance of the recent trend with revenue up by 0.5% compared with the comparable period last year and therefore, the board remains confident that their expectations for 2009 should be achieved.

Enquiries:

Headlam Group plc

Tony Brewer, Group Chief Executive  Tel: 01675 433000

Stephen Wilson, Group Finance Director