StockMarketWire.com - Floorcoverings distributor Headlam warns that first half earnings will be approximately 10% lower than last year due to the adverse first quarter performance.

And it believes it is unlikely that the company will meet market expectations for the financial year as a whole

The group says that markets in the UK and on the Continent have remained difficult and, in its view, have shown continued signs of contraction during the first six months of this year. It says that as previously reported, revenue during the first four months of the year was down on 2012. And it says that while 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. It adds: "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."




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