Final Results - Year Ended 31 December 1999

Headlam Group PLC
14 March 2000



            Preliminary Results for the Year Ended 31 December 1999

Headlam Group plc ('Headlam'), the floorcoverings and furnishings distributor,
announces its preliminary results for the year ended 31 December 1999 with
profits before taxation up by 36% and earnings per share up by 19%.

Financial highlights

                                       1999      1998           Change
                                                                      
Turnover                            £386.9m   £327.6m            + 18%
Profit before taxation*              £31.2m    £22.9m            + 36%
Earnings per share*                   27.5p     23.1p            + 19%
Diluted earnings per share*           27.2p     22.9p             +19%
Total dividend per share              10.0p      8.5p            + 18%
                                                                      
* before amortisation of goodwill

Key points

*    Significant progress in challenging market conditions
*    Strong increase in profits, earnings and dividends
*    An excellent year for the Floorcoverings division
*    Margins continue to improve in the Furnishings division
*    Successful integration of recent acquisitions in UK and Europe
*    Implementation of business-to-business e-commerce strategy
*    Positive start to 2000

Ian Kirkham, Chief Executive of Headlam, said:

'Headlam has made strong progress during 1999 despite testing market
conditions.  Our European presence is growing strongly and Headlam is now the
market leader.  We continue to look at opportunities in this fragmented
market.

'In the UK Headlam continues to gain market share and improve margins. We are
pleased to report that the current year has started well, with early signs
that consumer confidence in the UK floorcoverings market is increasing.'

Enquiries:

Headlam Group plc
Ian Kirkham, Chief Executive                 Tel:         [phone]
Stephen Wilson, Finance Director             Thereafter:  01604 234121

Gavin Anderson & Company
Richard Barton/Julian Wilson                 Tel:         [phone]

CHAIRMAN'S STATEMENT

I am delighted, in my first statement as Chairman, to report that Headlam has
continued to build on the sound progress of recent years.

We have successfully consolidated our position as the UK market leader in
floorcoverings and have continued to deliver on our strategic development plan
having made good progress in the presently fragmented European marketplace.

Financial performance

Total sales increased to £386.9 million (1998: £327.6 million) and profit
before goodwill amortisation and taxation increased to £31.2 million (1998:
£22.9 million).  These figures reflect growth in profitability in both the
floorcoverings and fabrics businesses and first time contributions from the
acquisitions made during the year.

Earnings and Dividend

Earnings per share (excluding goodwill amortisation) increased by 19.0% to
27.5p (1998: 23.1p).  The board is recommending a final dividend of 7.55p per
ordinary share, making total dividends for the year of 10.0p per ordinary
share, an increase of 17.6% over the previous year's dividends of 8.5p per
ordinary share.  If approved the final dividend will be paid on 3 July 2000 to
shareholders on the register at 16 June 2000.

Acquisitions

During 1999 the group acquired Joseph, Hamilton and Seaton ('JHS') a UK
contract carpet supplier, La Maison du Sol ('LMS'), a French floorcoverings
distributor, Haldon Thompson, a UK floorcoverings distributor and Eclipse
Blinds plc ('Eclipse') which, substantially extended the group's interests in
window furnishings.  As is referred to in the Chief Executive's report, during
the year the group has absorbed certain one off costs in the process of
integrating and repositioning these acquisitions, in particular Eclipse.

Already this year the group has made two further acquisitions for cash.  In
the UK we acquired Clifford's Carpets, a regional floorcoverings distributor
based in Kent.  In Continental Europe the group acquired Belcolor AG Flooring.
Belcolor is the second largest floorcoverings distributor in Switzerland and
following upon the 1999 acquisition of LMS, it takes forward the group's
European development strategy.

Board change

I was delighted to be invited by the board to take over the chairmanship of
the company from Graham Waldron from 1 January.  The results for 1999 are a
further testament to his chairmanship of the company since 1991.  Graham's
contribution to the business over the past eight years has been fundamental
and I am glad that, as he will be remaining on the board, we shall benefit
from this continued counsel.

Staff

We are fortunate that our staff are committed to providing the best service to
our customers.  Our businesses can only be as good as the service our staff
give to our customers.  The board wishes to thank them for all their efforts
on behalf of our customers and the group over the past year.  It is
particularly pleasing that a substantial number of our staff have taken up
previous opportunities to become shareholders in the group through our share
ownership plans.  It is planned to make a further offering to staff during the
current year around the time that the existing share save schemes expire and
once the Government's new share incentive plans become clear.

Outlook

The group is continuing to develop along the broad lines of the strategic plan
developed eighteen months ago.  The plan envisages further growth both through
organic development of the existing businesses and further acquisitions taking
advantage of a fragmented European market to build a substantial
floorcoverings and furnishings group.  The current year has started well and
is in line with the current year plan.

CHIEF EXECUTIVE REVIEW

Floorcoverings

The Floorcoverings division achieved record sales and profits helped by return
in UK consumer confidence during the final quarter of 1999.  After a
satisfactory first half year the demand for floorcoverings improved during the
traditionally busy autumn period.  The change in consumer preference to
resilient and wood flooring enabled us to take advantage of higher unit sales
and improving margins.  Business with the smaller independent retailers
flourished and at the same time we increased the amount of business conducted
with multiple retail and mail order customers as Headlam's high levels of
service and cost effective distribution systems began to reach a wider
customer base.  We completed the roll-out of our enhanced computer operating
system during the year to cover all UK operations, providing the management
team with the means to improve margins further and to control the businesses
even more tightly.

The integration of Joseph, Hamilton and Seaton and Haldon Thompson in the UK
and La Maison du Sol in France has proceeded well.  JHS recorded a
satisfactory performance whilst LMS, acquired in June 1999, returned to
profitability ahead of plan after years of small losses prior to acquisition.
Early indications are that the introduction of Headlam's business model
specifically tailored for the French floorcoverings market is working well and
has been received enthusiastically by customers and suppliers.

Having established operations across Europe we now plan to integrate all our
distribution businesses to take advantage of both the advanced computer
technology currently available to us in the UK and to offer a cohesive
approach to multinational customers and suppliers.

Gradus Group, comprising of Gradus Floorcovering Accessories, Gradus Carpets
and a rapidly developing contract fabric business, had another satisfactory
year.  The concept of offering a portfolio of contract finishes to end users
and specifiers is gaining momentum and several substantial orders have been
secured for delivery in 2000.

Recent events

We are pleased to report that our Stockport business relocated to a purpose
built distribution facility which opened in February.  This will provide the
local management team with every opportunity to develop into a more formidable
participant in the important but fragmented North West UK flooring market
place.  Similarly, in late March 2000 the current West Midlands based
businesses of KJC and Headlam will move into a freehold 155,000 sq.ft.
state-of-the-art warehouse and distribution centre based at Coleshill near
Birmingham.  As Europe's largest dedicated floorcoverings distribution site
this will enable us to strengthen our presence in an area of England that
traditionally yields excellent floorcoverings sales.  The existing freehold
site occupied by these businesses is to be disposed of to a neighbouring
business for £2.9 million.

Acquisitions

Clifford Carpets, a leading independently owned, Kent based business, was
acquired in January for £1.4 million.  This business will be relocated to the
nearby existing MCD site in April but will retain its existing brand name.

Our third acquisition in the European floorcoverings market was completed in
January with the £6.1 million acquisition of Belcolor AG Flooring,
Switzerland's second largest floorcoverings distributor.  This business, with
sales of approximately £19.0 million, is now being integrated into the
division and should make a useful contribution to this year's divisional
results.

Summary

Good trading conditions and a firm start to the year by the UK distribution
businesses, Gradus Group and our European businesses bodes well for 2000.
Certain one-off relocation costs will be incurred during the year including
the major move of the two West Midlands businesses during April.

We are excited about the prospect of using the internet to improve
communications with our customers and suppliers.  There is every reason to
believe that with 1.5m sq.ft. of  UK warehousing and over 270 delivery
vehicles the internet will play a big part in our future plans.  It should
enable us to improve our service to our customers whilst driving down costs as
improved communications lead to more efficient order receipt and stock holding
procedures.  We will use this opportunity to re-evaluate the level of optimum
profitability that can be achieved from our distribution business.  As a first
step we plan to launch fully interactive, 24 hour, 7 day week customer order
web sites during late March 2000 for the benefit of our trade customers.  This
will be the first of a number of initiatives we plan to introduce to improve
both our own and our customer competitiveness utilising internet technology.
We anticipate another very satisfactory year from the Floorcoverings division.

Furnishings division - Fabrics

The fabric operations of the Furnishing division produced a creditable
performance, improving their margins on a planned reduction in sales.  Fabric
also contributed to a healthy cashflow as working capital was reduced to
reflect the lower sales level.

Wm. O'Hanlon, the window blind and fabric business, had another record year
and subsequently its management team was given responsibility for three small
Eclipse businesses, all of which are involved in window blind manufacturing.
All four businesses share common practices, skills and core competencies, most
of which can now be interchanged.  In a relatively short period of time real
progress has been made in improving the results from the three former Eclipse
businesses.  Edinburgh Weavers also had a record year and continues to
progress well.  The design and sourcing skills of its management team are
making a useful contribution to the divisional results as a whole.

Claremont and Gordon John both experienced difficult trading conditions which
restricted their ability to progress.  Given this background the management
team took a fairly defensive position, concentrating on working capital
reductions and improving operating efficiencies.

Summary

The whole of the division has now accommodated the move by consumers away from
print to coloured wovens and plain fabrics.  To complement the group's growing
interest in e-commerce liningsxpress.com, an internet based next day curtain
lining service, will be launched to the furnishing trade at the beginning of
April.  It aims to facilitate a faster, more energetic approach to a market
which is an important and integral part of the division's activities.  Clearly
Fabrics is currently the most challenging of the group's markets, however we
are making steady headway in producing a satisfactory return despite these
conditions.

Acquisition of Eclipse Blinds plc

The acquisition of Eclipse Blinds plc was completed in May 1999 and
subsequently a thorough review of each business unit was completed in
September 1999.  The major conclusions drawn from this review were that
certain of the original Eclipse businesses lacked the required critical mass,
whilst others had not been fully integrated into the former Eclipse Group.
Overall the Eclipse Group required some restructuring to take advantage of the
markets it operates in and to realise the substantial growth potential.

Following acquisition the senior management has been strengthened by the
appointment of a new Finance Director and an announcement regarding the
appointment of a new Managing Director is expected shortly.  The management of
subsidiaries now attend regular Eclipse board meetings and are encouraged to
review both individual businesses and collectively the Eclipse Group
performance.  Product development is now undertaken with both local and
international markets in mind with the ultimate objective of bringing group
synergies and additional profit opportunities.

Eclipse operating subsidiaries

The core UK business recorded good results and grew both its profits and
market share.  Recent product launches and a strengthened sales team are
propelling the business into a stronger market position.  Further improvements
are anticipated as the flow of new products and marketing initiatives gathers
pace.

The previous management's decision to acquire three loss making companies and
merge them on one site in Northampton proved to be unsuccessful.  To resolve
this issue one business has been sold and one transferred to Headlam's Fabric
division where there are common core competencies. The remaining business has
been relocated to Vertika, an original Eclipse business, in order to assist
Vertika in reaching a satisfactory level of critical mass.

The window blind manufacturing business in Germany has been merged with
another Eclipse business situated in the Czech Republic which in turn has
relocated to a nearby enlarged facility, drastically reducing labour costs and
eliminating a loss making performance.    Both of these businesses have now
been incorporated into the existing Headlam window blind subsidiary, Wm.
O'Hanlon.

In the United States the core business, Eclipse Blinds Inc., recorded a very
profitable performance but did not reach its own ambitious growth targets.  A
number of initiatives, including tighter control of costs, improved service
levels and the imminent launch of two major new products have been actioned to
provide further stimulus to an exciting company which is surrounded by a
number of strategic options for future expansion.

Summary

The integration process is almost complete.  Improved management techniques
and control procedures are now in place.  Prior to its acquisition by Headlam,
Eclipse had made a number of small, but loss making acquisitions.  These
individual businesses have now been dealt with, leaving the two main
businesses in the US and UK as the future engine room for growth.  A
substantial amount of work has been undertaken to reposition Eclipse and to
enable it to take full advantage of good market conditions as consumers
increasingly express their current preference for window treatments in the
form of products manufactured or distributed by the Eclipse Group.

Group Summary

Floorcoverings - remains our core business and the main profit driver of the
group. Consequently, the future allocation of resources for acquisitional
growth will be centred around the Floorcoverings division.  We have identified
a number of further opportunities which when realised are likely to be
financed from the group's strong cash flow.

Furnishing -  having created a meaningful and profitable division with
critical mass, we shall now primarily concentrate on growing this organically
and extracting a higher return for our endeavours.

e-commerce - this is a wonderful opportunity to utilise the group's core
competencies of warehouse logistics and distribution to the full.  Inevitably
some of the traditional methods our customers and their customers use to
select and purchase the products we distribute will change.  Headlam is well
placed to take advantage of these opportunities, several of which we are about
to implement.

FINANCIAL REVIEW

Accounting policies

The financial statements have been prepared on a basis which is consistent
with previous years except to the extent that they have been modified to
incorporate the relevant accounting standards issued during the period by the
Accounting Standards Board and applicable to accounting periods ending on 31
December 1999.

Profit and loss account

Turnover

The group's turnover increased by 18.1% from £327.6 million to £386.9 million.
Turnover from continuing operations reduced by 2.2% from £327.6 million to
£320.4 million and acquisitions during the year contributed £66.5 million.

Turnover from continuing operations in the Floorcoverings division increased
by 1.3% from £268.4 million to £272.0 million and JHS, LMS and Haldon
Thompson, the three businesses acquired during the year and included
respectively from 1 March, 1 June and 1 July contributed a further £28.7
million.

Turnover from continuing operations in the Furnishings division reduced by
18.3% from £59.1 million to £48.3 million mainly as a consequence of the
deliberate decision to reduce activity in low margin retail business during
the second half of 1998.  Turnover from Eclipse Blinds, included in this
division from 1 May 1999, amounted to £37.8 million.

Profit on ordinary activities before interest and goodwill amortisation

During the period, the group's profit on ordinary activities before interest
and goodwill amortisation increased by 36.2% from £25.2 million to £34.3
million.  The contribution from continuing operations during the year amounted
to £28.0 million, an increase of 11.3% on the previous year.  Acquisitions
added a further £6.3 million.

The group's gross profit margin increased during the year from 28.6% to 29.9%
whilst net operating expenses expressed as a percentage of turnover increased
from 20.9% to 21.1%.  Net operating margins increased from 7.7% to 8.9%.

Profit from continuing operations in the Floorcoverings division, increased by
12.3% from £22.5 million to £25.3 million and net operating margins increased
from 8.4% to 9.3%.  JHS, LMS and Haldon Thompson contributed £1.6 million.

Profit from continuing operations in the Furnishings division remained
unchanged compared with last year at £3.6 million. However, net operating
margins increased from 6.1% to 7.5%.  Eclipse Blinds contributed £4.7 million
during the period.

Goodwill amortisation

The goodwill arising on acquisition of JHS, Eclipse Blinds, LMS and Haldon
Thompson has been capitalised and assigned a useful economic life of 20 years.

Goodwill has been amortised during the year on a timing basis in order to
match with post acquisition income.  Goodwill amortisation during the year
amounted to £2.4 million of which, £0.4 million relates to the Floorcoverings
division and £2.0 million relates to the Furnishings division.

The potential economic lives of businesses and goodwill will be reviewed
annually and revised if appropriate.

Goodwill amounting to £69.5 million, arising on acquisitions which occurred
prior to the start of the year has been written off directly against the
profit and loss account.

Net interest payable

The group's net interest cost increased from £2.3 million to £3.1 million but
interest cover remained virtually unchanged at 11.1 compared with 11.0 for the
previous year.

Taxation on profit on ordinary activities

The underlying rate of tax during the year was 34.2% giving rise to a charge
of £10.7 million.  However, a prior year adjustment of £1.2 million arising
from an overestimate of previous years' tax reduced the tax charge for the
year to £9.5 million giving rise to an effective rate of 30.5 %.  The
underlying rate of tax increased on last year's rate of 31.0% due to an
overall increase in the level of profits earned outside the UK and the
inability of some overseas businesses to fully utilise the available tax
relief.

Earnings per share

Basic earnings per share, excluding goodwill amortisation, increased by 19.0%
from 23.1p to 27.5.p.  Diluted earnings per share, excluding goodwill
amortisation, increased by 18.8% from 22.9p to 27.2p.
Basic and diluted earnings per share, after goodwill amortisation, were 24.4p
and 24.1p respectively.

Balance sheet

Current liquidity

The group's cash position during the year reduced by £12.1 million from £23.0
million to £10.9 million.  At 31 December 1999, £9.0 million was held in
sterling and the equivalent of £1.6 million in US dollars and £0.3 million in
euros. Total group borrowings at 31 December 1999 compared with the position
as at 31 December 1998 were as follows

                                              1999            1998
                                                £m              £m
                                                       
     Bank loans and overdraft                 40.5            18.7
                                                                  
     Loan notes                                  -             2.7
                                                                  
     Obligations under finance                                    
     leases and similar hire                                      
     purchase contracts                        4.0             4.0
                                                                  
                                              44.5            25.4

At 31 December 1999, £32.1 million was held in sterling and the equivalent of
£4.4 million in US dollars, £7.9 million in euros and £0.1 million in other
European currencies.

On 30 June 1999 and 1 July 1999, the group redeemed the preference shares in
Eclipse Blinds plc for £12.1 million.  The nominal value of the shares
redeemed amounted to £0.6 million and included a redemption premium of £11.5
million.  The group funded the redemption with a sterling term loan facility
of £15.5 million which was drawn down on 1 July 1999.

As a consequence of the group electing to utilise its own resources to fund
some of the acquisitions completed during the year and the decision to switch
the Eclipse Blinds preference shares into more cost effective debt, the
group's net indebtedness increased from £2.4 million to £33.6 million.
Balance sheet gearing, based on shareholders' funds before the capitalisation
of goodwill, increased from 4.2% at 31 December 1998 to 67.6%.  Balance sheet
gearing calculated on shareholders' funds after the capitalisation of goodwill
was 28.2%.

Cash flows

Cash inflow from operating activities during the year amounted to £32.0
million compared with £26.2 million for the previous year.

The group's capital expenditure during the year amounted to £10.5 million
(1998: £1.4 million).  The significant increase was principally due to the
cost of funding the development of the warehouse and distribution centre at
Coleshill.  At 31 December 1999, development costs totalled £6.7 million.  A
further £3.3 million will be spent during the first quarter of 2000 in order
to complete the project.  Other expenditure incurred during the year included
investments in plant and machinery for the Eclipse businesses, which totalled
£1.3 million.

Sales of assets during the year related to surplus properties no longer
occupied.  The disposals generated cash of £1.0 million.  A further £2.9
million will be received during the first quarter of 2000 when KJC move to
Coleshill and their existing property is sold.

The outflow of funds relating to acquisitions during the year, amounting to
£22.6 million includes cash consideration of £13.2 million, acquisition costs
of £1.7 million and assumed net indebtedness in the acquired companies
amounting to £7.7 million.

Financing cash inflows amounted to £3.0 million net.  £12.1 million related to
the redemption of the Eclipse Blinds preference shares, £0.7 million to the
repayment of debt and £15.5 million to the draw down under the term loan.  Net
proceeds from the issue of shares amounted to £0.3 million.

Total cash outflows for the period amounted to £12.7 million compared with a
£1.3 million inflow for previous year.

Share capital

During the period, the number of ordinary shares in issue increased by 14.9
million from 68.5 million to 83.4 million.  14.6 million shares were issued in
connection with the acquisition of Eclipse at a price of 345.0p per share and
a further 0.3 million were allotted under share option schemes at prices
ranging between 129.6p and 366.5p.

Consolidated profit and loss account
for the year ended 31 December 1999

                                                        1999            1998
                                                        £000            £000
                                                                            
Turnover                                                                    
Continuing operations                               320,366          327,593
     Acquisitions                                    66,512                -
                                                                            
                                                                            
                                                    386,878          327,593
                                                                            
Cost of sales                                     (271,030)        (233,980)
                                                                            
                                                                            
Gross profit                                        115,848           93,613
                                                                            
Net operating expenses                             (84,028)         (68,461)
                                                                            
                                                                            
Operating profit                                                            
Continuing operations                                27,992           25,152
     Acquisitions                                     3,828                -
                                                                            
                                                                            
     Operating profit before goodwill                                       
     amortisation                                    34,259           25,152
     Goodwill amortisation                          (2,439)                -
                                                                            
                                                                            
                                                     31,820           25,152
                                                                            
Net interest payable and other                                              
similar items                                       (3,096)          (2,295)
                                                                            
Profit on ordinary activities                                               
before taxation                                      28,724           22,857
                                                                            
Taxation on profit on ordinary                                              
activities                                          (9,494)          (7,087)
                                                                            
Profit for the financial year                        19,230           15,770
                                                                            
Dividends paid and proposed on                                              
equity and non equity shares                        (8,461)          (5,820)
                                                                            
Profit retained for the                                                     
financial year                                       10,769            9,950
                                                                            
                                                                            
Earnings per share                                                          
Basic                                                                    
Before goodwill amortisation                         27.5p             23.1p
                                                                            
                                                                            
After goodwill amortisation                          24.4p             23.1p
                                                                            
Diluted                                                                   
Before goodwill amortisation                         27.2p             22.9p
                                                                            
After goodwill amortisation                          24.1p             22.9p
                                                                            
                                                                            

Consolidated balance sheet
at 31 December 1999

                                                          1999          1998
                                                          £000          £000
                                                                            
Fixed assets                                                                
Intangible assets                                      69,787              -
Tangible assets                                        49,822         41,181
Investments                                               466              -
                                                                           
                                                      120,075         41,181

Current assets                                                              
Stocks                                                 81,784         61,184
Debtors                                                86,230         54,772
Investments                                                28             57
Cash at bank and in hand                               10,871         22,981
                                                                            
                                                      178,913        138,994
                                                                            
Creditors: amounts falling                                                  
due within one year                                 (148,095)       (98,504)

Net current assets                                     30,818         40,490

Total assets less current                                                   
liabilities                                           150,893         81,671
                                                                            
Creditors: amounts falling                                                  
due after more than one year                         (30,993)       (23,238)
                                                                            
Provisions for liabilities                                                  
and charges                                             (451)          (380)
                                                                            
Net assets                                            119,449         58,053

Capital and reserves                                                        
Called up share capital                                 4,220          3,473
Share premium account                                  47,838         47,525
Revaluation reserve                                     3,866          3,924
Special reserve                                        49,654              -
Profit and loss account                                13,871          3,131

Shareholders' funds                                                         
Equity                                                119,399         58,003
Non equity                                                 50             50  
                                                                        
                                                      119,449         58,053
                                                                            
                                                                            
                                                                            
Consolidated cash flow statement
for the year ended 31 December 1999

                                                            1999        1998
                                                            £000        £000
                                                                            
Net cash inflow from operating                                              
activities                                               32,000       26,158
                                                                            
Returns on investments and                                                  
servicing of finance                                    (3,056)      (2,381)
                                                                            
Taxation                                                (7,700)      (5,469)
                                                                            
Capital expenditure and                                                     
financial investment                                    (9,978)        (711)
                                                                            
Acquisitions and disposals                             (22,605)        1,452
                                                                            
Equity dividends paid                                   (4,381)      (5,042)
                                                                            
Cash (outflow)/inflow                                                       
before financing                                       (15,720)       14,007
                                                                            
Financing                                                                   
Issue of shares                                             661          352
Expenses paid in connection                                                 
with share issues                                         (330)            -
Redemption of preference shares                        (12,121)            -
Increase/(reduction) in debt                             14,836     (13,018)
                                                                            
                                                          3,046     (12,666)

(Decrease)/increase in                                                      
cash in year                                           (12,674)        1,341
                                                                            
                                                                            
                                                                            

Reconciliation of net cash flow to movements in net debt


                                                            1999        1998
                                                            £000        £000
                                                                            
(Decrease)/increase in                                                      
cash in year                                           (12,674)        1,341
Cash (inflow)/outflow from                                                  
(increase)/reduction in debt                           (14,836)       13,018
                                                                            
                                                                            
                                                                            
Change in debt resulting                                                    
from cash flows                                        (27,510)       14,359
Debt (acquired)/disposed of                                                 
with subsidiaries                                       (2,513)          369
New finance leases and similar                                              
hire purchase contracts                                 (1,770)        (936)
Translation difference                                      583        (154)

                                                                            
Movement in net debt in the year                       (31,210)       13,638
Net debt at 1 January                                   (2,421)     (16,059)
                                                                            
Net debt at 31 December                                (33,631)      (2,421)
                                                                            
                                                                            
                                                                            

Consolidated statement of total recognised gains and losses
for the year ended 31 December 1999

                                                            1999        1998
                                                            £000        £000
                                                                            
Profit for the financial year                             19,230      15,770
Currency translation differences                                            
on foreign currency  net investments                        (87)           4
Unrealised surplus on revaluation                                           
of properties                                                  -       2,787

Total recognised gains and losses                                           
for the financial year                                    19,143      18,561



Note of consolidated historical cost profits and losses
for the year ended 31 December 1999

                                                            1999        1998
                                                            £000        £000
                                                                            
Reported profit on ordinary                                                 
activities before taxation                                28,724      22,857
Difference between an historical cost                                       
depreciation charge and the actual                                          
depreciation charge calculated on the                                       
revalued amount                                               58          23

Historical cost profit on ordinary                                          
activities before taxation                                28,782      22,880
                                                                            
Historical cost profit for the                                              
year retained after taxation                                                
and dividends                                             10,827       9,973



Reconciliation of movements in consolidated shareholders' funds
for the year ended 31 December 1999

                                                         1999       1998
                                                         £000       £000
                                                                        
Profit for the financial year                          19,230     15,770
Dividends                                                               
 Equity shares                                        (8,332)    (5,817)
 Non equity shares                                      (129)        (3)

                                                                        
Retained profit for the                                                 
financial year                                         10,769      9,950
Negative goodwill taken to profit                                       
and loss account on liquidation of                                      
subsidiary undertaking                                      -       (24)
Equity share capital issued                            51,044      1,117
Cost of share issues                                    (330)          -
Contribution to Qualifying                                              
Employee Share Trust                                        -      (765)
Currency translation differences on                                     
foreign currency net investments                         (87)          4
Revaluation of properties                                   -      2,787
                                                                        
                                                                        
Net addition to shareholders' funds                    61,396     13,069
Shareholders' funds at 1 January                       58,053     44,984
                                                                        
Shareholders' funds at 31 December                    119,449     58,053
                                                                        
                                                                        
                                                                        
Segmental analysis

                                                                  Operating
                                                  Turnover           profit
By activity                                           £000             £000
1999                                                                        
Floorcoverings                                      300,752           26,535
Furnishings                                          86,126            6,227
                                                          
                                                    386,878           32,762
                                                           
Central operations                                                     (942)
                                                                            
                                                                      31,820
                                                                            
                                                                            

1998                                                                        
Floorcoverings                                      268,449           22,544
Furnishings                                          59,144            3,595

                                                    327,593           26,139
                                                                            
                                                           
                                                           
Central operations                                                     (987)
                                                                            
                                                                          
                                                                     25,152
                                                                            
                                                                            

Earnings per share

The calculation of earnings per share is based on the average number of
ordinary shares in issue during the year of 78,436,955 (1998:  68,344,741).
The weighted average number of ordinary shares used for the diluted earnings
per share calculation is 79,360,933 (1998: 68,998,228).

Reconciliation of group operating profit to net cash inflow from operating
activities

                                                       1999             1998
                                                       £000             £000
                                                                            
Operating profit                                     31,820           25,152
Negative goodwill taken to profit                                           
and loss account on liquidation of                                          
subsidiary  undertaking                                   -             (24)
Depreciation                                          3,937            3,172
Goodwill amortisation                                 2,439                 
Profit on sale of fixed                                                     
tangible assets                                        (91)             (10)
Movement in stocks                                  (5,231)          (2,141)
Movement in debtors                                 (7,308)              599
Movement in creditors                                 6,434            (590)
                                                                            
                                                                            
                                                           
Net cash inflow from                                                        
operating activities                                 32,000           26,158


The interim financial statements for the year ended 31 December 1999 will be
posted to shareholders shortly and copies will be available from that date
from the company's registered office.