Headlam Regulatory News (HEAD)

18 May 2009 15:00



18 May 2009

Interim Management Statement 

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

Revenues for the four month period to 30 April 2009

Total group revenue decreased by 8.5% during the first four months of 2009.

During 2009, Easter occurred during April and in 2008 during March. We have therefore reported on the first four months of 2009 to present the current and previous periods on a comparable basis.

Overall, UK revenue decreased by 11.8%, but after adjusting for the differences in working days during the two periods, like for like performance in the UK decreased by 10.8%.  The like for like reductions in residential and commercial activity were 11.8% and 8.4% respectively.

Collectively, the Continental European businesses registered an increase in revenue of 7.7%. This, despite an underlying like for like reduction of 10.2%, was achieved through favourable currency effects and the first time contribution from Silvester, the Dutch residential distribution business acquired during October 2008.

Gross margin 

Product pricing has been relatively stable during the first four months of 2009 and consequently, had very little bearing on gross margin movement.

Our UK commercial business continues to increase as a proportion of UK revenue, up from 31.0% to 31.8% during the first four months. Furthermore, we have experienced a continuation of the trend towards higher activity in the number of orders processed for full rolls of residential products.

This movement in product mix has created downward pressure on gross margin during 2009 because, as stated on previous occasions, the margins achieved in these two activities are less than the group's overall average.

Outlook

UK revenues during May are likely to show a decrease of approximately 9.0% on the previous year, registering a modest improvement compared with the previous four months. Revenues from our Continental businesses during May will probably be consistent with the performance achieved so far this year.

Whilst the trading environment continues to be challenging, we remain fixed on our operating strategy and based on the results so far, maintain our belief that the group should achieve its operating objectives for the year.

Enquiries:

Headlam Group plc

Tony Brewer, Group Chief Executive  Tel: 01675 433000

Stephen Wilson, Group Finance Director