Trading Update

RNS Number : 7460L

Headlam Group PLC

16 January 2009

Trading update

Headlam Group plc, Europe's leading floorcoverings distributor, provides a trading update prior to the release of its results on Monday 30 March 2009 for the year ended 31 December 2008.

Group revenue for the year to 31 December 2008 has increased by 2.3%.

In the UK, like for like revenues decreased by 2.5%. However, with the benefit of a full twelve-month contribution from businesses acquired during 2007, the decline in total UK revenue amounted to 1.1%.

In Continental Europe, the collective like for like revenues of our three businesses increased during the twelve months by 3.2%. Currency translation effects, which increased revenue by 18.5%, continue to have significant influence leading to overall revenue growth of 21.7%.

Based on this performance, earnings for the twelve months to 31 December 2008 are likely to be in line with market expectations.

Outlook

As reported previously, the trading environment, particularly in the UK, was much more demanding during the second half of 2008 compared with the first half. First half like for like revenue in the UK increased by 2.8% compared with a second half decline of 7.2%.

We anticipate that these subdued markets will exist for some time and accordingly have taken steps to restructure certain elements of our business to respond to the changes in market activity. Despite the challenges before us, we remain focused on our objectives of outperforming the floorcoverings market and increasing market share.