Headlam Regulatory News (HEAD)

18 July 2018

Headlam Group plc

('Headlam' or the 'Company')

Pre-close Trading Update

Headlam Group plc (LSE: HEAD), Europe's largest distributor of floorcoverings, provides a trading update in respect of the six months ended 30 June 2018 (the 'Period') ahead of announcing its interim results for the Period on Wednesday, 22 August 2018.

As described in the AGM Trading Update announced on 24 May 2018, trading during the first four months of the year was characterised by a soft UK market backdrop affecting revenue in both the residential and commercial sectors as well as a decline in revenue attributable to the Company's largest customer. These two features continued to affect trading to a similar degree through May and June 2018.

Total revenue increased by 0.6% (in reportable currency) during the Period compared with the prior year but declined by 4.5% on a like-for-like* basis. UK revenue declined by 0.5% compared with the prior year period whilst the like-for-like* performance showed a decline of 5.5%. On the Continent revenue increased by 6.8% and grew on a like-for-like* basis, improving by 1.8%.

Through a combination of infill strategic acquisitions and the implementation of management actions focused on a number of operational initiatives, the Company continues to consolidate its market leading position and maintain its focus on profitability. In addition to the acquisition of Dersimo BV previously announced in March 2018, the Company completed the acquisition of CECO (Flooring) Limited based in Northern Ireland and Ashmount Flooring Supplies Limited located in North London in March and July 2018 respectively**.

Subject to no further downturn in market conditions and the Company experiencing the usual weighting of trading to the traditionally stronger second half of the year, the Board is currently confident of delivering expectations for 2018.

Interim results analyst meeting

A meeting for analysts will be held at 10am on the day of the announcement of the interim results, 22 August 2018, at the offices of Buchanan, 107 Cheapside, London EC2V 6DN. For analysts wishing to attend, please contact Buchanan on the details below or email headlam@buchanan.uk.com.

*Like-for-like revenue is calculated based on constant currency from activities and businesses that made a full contribution in both the 2018 and 2017 periods and is adjusted for any variances in working days

**Details available on the Company's website at www.headlam.com/news-enquires/other-news

The Company adopted IRFS 15, Revenue from contracts with customers, as at 1 January 2018, the consequences of which have not been reflected in the above reported performance statistics. The effect of adopting IFRS 15 will be disclosed in the interim results.

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 16 primary 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 65 wholly-owned businesses in the UK and Continental Europe (UK 61, Continental Europe 4) each operating under their own trade brand and utilising their individual sales team which achieves greater market penetration.

Each of the businesses is supported by the Company's centralised and financial resources and extensive distribution network across the UK and Continental Europe.

Email: HeadlamGroup@headlam.com

www.headlam.com