Adoption of IFRS

Headlam Group PLC
15 August 2005


15 August 2005

Headlam Group plc ('Headlam')
Adoption of International Financial Reporting Standards

Headlam, Europe's leading floorcovering distributor, announces that it has today
published its report explaining the effects of adopting International Financial
Reporting Standards ('IFRS') on its previously reported results for the twelve
month period ended 31 December 2004.

The full report, entitled 'Financial Information on the Transition to
International Financial Reporting Standards', is published on Headlam's website
www.headlam.com.

IFRS will apply for the consolidated financial statements of listed companies
for accounting periods beginning on or after 1 January 2005.
Headlam Group plc (Headlam) will publish its 2005 Interim Financial Results and
2005 Annual Report and Accounts in accordance with IFRS.
The transitional report has been prepared in order to provide financial
information on the impact of Headlam's transition from a UK Generally Accepted
Accounting Principles (UK GAAP) basis to an IFRS basis.

A summary of the changes to the results for the twelve month period to 31
December 2005 arising from the implementation of IFRS are given below.

                                                                         £'000

Profit before tax per UK GAAP                                           38,341

Property depreciation                                                       59
Goodwill amortisation                                                      918
                                                                       ---------
                                                                           977

Amortisation of intangibles                                               (836)
Share based payments                                                       (57)
Retirement benefit obligations                                              62
Property leases                                                             (3)
                                                                       ---------
                                                                          (834)
                                                                       ---------
Profit before tax per IFRS                                              38,484
                                                                       ---------

The net effect of restating the 2004 results to IFRS is to increase profit
before tax by £143,000. Tax affects, amounting to £237,000, reduce the reported
tax charge under UK GAAP and increase profit after tax to £26,746,000 up from
£26,366,000. Basic earning per share increases to 31.3 pence from 30.9 pence.


The effect of IFRS on net assets is as follows:

                                                                         £'000

Net assets per UK GAAP                                                 126,868

Property revaluation                                                    (6,975)
Goodwill amortisation                                                      918
                                                                       ---------
                                                                        (6,057)

Amortisation of intangibles                                               (836)
Retirement benefit obligations                                         (17,914)
Deferred tax                                                             6,323
Property leases                                                            (43)
Dividends                                                               10,536
                                                                       ---------
                                                                        (1,934)
                                                                       ---------
Profit before tax per IFRS                                             118,877
                                                                       ---------

Net assets decrease by £7,991,000 under IFRS.

The adjustments identified above are described in full within the transitional
report.

Enquires
Headlam Group plc
Stephen Wilson, Finance Director
Tel: [phone]




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