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: 01675 433000 This information is provided by RNS The company news service from the London Stock Exchange