Headlam Regulatory News (HEAD)

18 January 2018

Headlam Group plc

('Headlam or the 'Company')

Pre-close Trading Update

Headlam Group plc (LSE: HEAD), Europe's largest distributor of floorcoverings, is pleased to provide a trading update in respect of the 12 months ended 31 December 2017 and ahead of announcing its final results for the year ended 31 December 2017 on Tuesday, 6 March 2018.

As outlined in the Trading Update announcement dated 7 December 2017, the first four months of the second half of 2017 were characterised by weaker markets. However, the trading performance improved in November and December 2017 relative to the first four months of the second half. This led to an overall positive result for the year, with total revenue growth of 2.1% (1.2% in constant currency) (with one less working day than 2016) and like-for-like revenue* growth in the UK and Continental Europe of 0.5% and 4.2% respectively.

The Company's concerted focus on margin enhancement and efficiencies throughout 2017 more than offset the slightly lower than originally anticipated revenue growth, and further to the December 2017 Trading Update announcement the Company now expects to report underlying** profit before tax for the year ended 31 December 2017 comfortably in-line with consensus market expectations. The consensus market expectations for underlying** profit before tax of £42.5 million represents an uplift of 6.0% on the prior year.

Following the acquisition in December 2017 of Domus, the UK's leading specification consultant and supplier of hard surfaces for premium construction and refurbishment projects, the Company is hosting a Capital Markets Event for analysts and institutional investors on 30 January 2018. The event, which is to be held in London, aims to provide a detailed overview of Domus's operations and marketplace, as well as the strategic rationale and benefit to the Company. No new material information will be provided***.

*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 any variances in working days

**Before non-recurring items, including intangibles write-off relating to the businesses acquired in 2017, acquisitions fees and non-recurring costs relating to personnel changes

***Any enquiries about the Capital Markets Event should be directed to the Enquiries list given below

The Company has separately today announced Board Changes in respect of Non-Executive Directors and the Non-Executive Chairman of the Company.

Enquiries:

Notes for Editors:

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

Headlam's core business 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 17 countries whose products cover a significant proportion of the floorcoverings market including carpet, residential vinyl, engineered wood, laminate, luxury vinyl tiles, ceramic tiles, underlay and commercial flooring. The Company's customers are within both the residential and commercial sectors and comprise principally independent retailers and flooring contractors.

The Company comprises 62 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.

www.headlam.com