Headlam Regulatory News (HEAD)

19 November 2013

Interim Management Statement

Headlam Group plc ("Headlam"), Europe's leading floorcoverings distributor, announces its Interim Management Statement for the nine month period from 1 January 2013 to 30 September 2013.

The group's revenue increased by 2.0% over the nine months compared with the previous year in large part due to the £6.8 million contribution from acquisitions during the period.

In the UK, revenue increased by 2.5% with the underlying like for like performance improving by 0.6%. Revenues from our Continental European businesses decreased by 0.3% during the period and when measured in constant currency, declined by 4.4%.

The gross margin improvement in the UK that was a feature of the first six months, has continued through quarter three resulting in the 30 basis point increase on last year being sustained for the nine month period.

On the Continent however, gross margin performances deteriorated slightly in the face of continued market pressures.

The extension to the Coleshill distribution hub is moving forward in line with the construction

timetable and will be fully operational during January 2014 and the group's financial position has shown no significant change compared with the position at 30 June 2013.

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

"Notwithstanding the occurrence of monthly revenue volatility in the UK, as the year has progressed, trading for each successive quarter has shown continued improvement with the third quarter lifting the cumulative underlying UK performance into positive territory compared with last year.

Revenues in the UK during October maintained the positive trend, resulting in the ten month like for like performance increasing to 0.8%. This upturn in market activity evident during October, the first month of what is traditionally the group's most active quarter, provides encouragement particularly since the momentum has continued into November.

Whilst market pressures remain, the board is confident that the group will deliver its revised internal performance objective for 2013 if the trading targets for November and December are achieved and as a consequence, the final dividend for 2013 should not be less than 2012."

End

Enquiries:

Headlam Group plc

Tony Brewer, Group Chief Executive Tel: 01675 433000

Stephen Wilson, Group Finance Director