Headlam Regulatory News (HEAD)

8 July 2013

Trading Update

Headlam Group plc ("Headlam"), Europe's leading floorcoverings distributor, announces a trading update prior to the release of its half year results on Friday 30 August 2013.

Floorcovering markets both in the UK and on the Continent have remained difficult and, in our view, have shown continued signs of contraction during the first six months of 2013.

As reported in our May interim management statement, revenue during the first four months of the year was down on 2012. Whilst the early indications for May reflected some of the recovery evident in March and April, activity levels dropped as the month continued leaving revenue marginally up on the previous year by the time the month concluded. Trading during June was a progression of May and revenue for the month was marginally down compared with the previous year.

The net effect for the six month trading period is that the group's first half earnings will be below last year by approximately 10% principally due to the adverse first quarter performance.

Furthermore, in the continued absence of any real improvement in our floorcovering markets, an element of uncertainty around the group's trading performance during the second half is likely to prevail, notwithstanding that this is traditionally the group's busiest period of the year. As a result, the board now believes it is unlikely that the company will meet market expectations for the financial year as a whole.

However, despite this outcome, the board remains confident subject to a reasonable second half trading performance that the dividend for the current financial year will be consistent with 2012.

End

Enquiries:

Headlam Group plc

Tony Brewer, Group Chief Executive Tel: 01675 433000

Stephen Wilson, Group Finance Director