Headlam Regulatory News (HEAD)

19 January 2017

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 pre-close trading update ahead of announcing its preliminary results for the year ended 31 December 2016 on 7 March 2017.

Following the trading update on 1 December 2016 when the Company announced that it expected to report preliminary results before non-recurring items* ahead of current consensus market expectations, the Company continued to experience better than anticipated trading in the latter part of the important fourth quarter. As such, the Company now expects to report preliminary results before non-recurring items* ahead of the revised consensus market expectations**.

Total revenue for the year was up 6.0% against 2015, approximately 4.5% in constant currency, with a strong performance from both the UK and Continental Europe. The UK continued to account for approximately 88% of total revenue and UK like-for-like growth was 4.7%, a significant outperformance of the 3.8% growth in the market***. Continental Europe, which accounted for approximately 12% of total revenue, grew by 3.6% in constant currency strongly reversing the decline of 3.8% in 2015.

The Company benefited from the price increases it implemented from August 2016 to mitigate cost inflation due to a weakening of sterling, and the increased revenue led to an improved operating performance as a result of operational gearing.

 Enquiries:

\* The non-recurring items predominately relate to personnel changes arising during the second half of the year

**Company-compiled consensus market expectations for 2016 profit before tax (normalised) of £37.6 million (average)

***Source: AMA Research Ltd - Floorcoverings Market Report UK 2016-2020 Analysis

The information contained within this announcement is deemed to constitute inside information as stipulated under the Market Abuse Regulations (EU) No. 596/2014. Upon the publication of this announcement, this inside information is now considered to be in the public domain.

Notes for Editors:

Headlam Group plc ('Headlam' or 'the Company') is Europe's largest distributor of floorcoverings having grown significantly via acquisition and organic growth since 1992. 

The Company currently comprises over 60 wholly-owned floorcoverings distribution businesses in the UK and Continental Europe each operating under their own trade brand.

Each business is supported by the Company's centralised and financial resources and extensive distribution network, and the Company's scale allows the businesses to benefit from greater access to suppliers of floorcovering products.

An extensive range of floorcovering products (including carpet, vinyl, wood and laminate) is sourced from suppliers across 12 countries, who gain considerable access into the European market. The Company's distribution network (comprising distribution hubs, distribution centres and service centres) allows customers to benefit from next day delivery as well as an extensive product range.

The Company's customers are within the residential and commercial sectors and comprise principally independent retailers and flooring contractors with whom the Company's businesses typically have long standing relationships. A greater reach is achieved into the customer base by each business operating under their own trade brand and utilising their individual sales teams.