28 April 2026

Headlam Group plc

('Headlam', the 'Company', the 'Group')

Board response to letter published by First Seagull

The Board of Headlam has today published an open letter to the Company's shareholders as set out below.

Dear Shareholder,

On 24 April 2026 the Board received a notice purporting to be a requisition notice from First Seagull AS ("FS") to convene a general meeting to vote on the removal of three current directors and the appointment of two new directors including the Managing Director of FS.  FS also published an open letter yesterday setting out their reasons.  

We are writing to all shareholders to set out the facts and the context related to the notice and subsequent letter from FS.

The Board will provide a further, fuller response in due course. 

The Board has received confirmation from the Company's two largest shareholders, representing c.15% and 11% respectively of the issued share capital, that they will vote against the resolutions proposed relating to the removal of current directors and the appointment of the nominees recommended by FS at any general meeting.

Acknowledging past performance - and acting decisively

The Board recognises that recent years have been disappointing for shareholders. End‑market conditions have been challenging and mistakes have been made. The Board does not seek to deflect from this reality.

Importantly, since the appointment of the current Chair c.12 months ago, decisive action has been taken to address underperformance, including:

·      Replacing the Chief Executive Officer in October 2025, with the Chair stepping up as interim Executive Chair for a limited period whilst a new Chief Executive Officer was recruited and appointed

·      Acceleration of a comprehensive transformation plan, announced in November 2025, which is already in execution and being driven by the new executive team

·      Completing a major refinancing in February 2026 to provide liquidity and flexibility

·      Appointing new Executives, both a new Chief Executive Officer and a new Chief Financial Officer, in March 2026 with Rob Barclay and Richard Jones already in situ

·      Strengthening the Board through new Non‑Executive Directors (NEDs) with relevant experience. The appointments of Nick Kelsall and Wilf Walsh will take place on 20 May 2026, having been announced in early April 2026

These actions demonstrate the level of activity undertaken and effected by your Board in the most recent period, with time needed to deliver positive results.

Given our shareholders have the opportunity to vote on the constitution of the board at our AGM on 20 May 2026, the distraction and cost of a separate general meeting is unhelpful and unwarranted.

Extensive and constructive engagement with First Seagull

The Board has engaged widely and extensively with FS since it was first notified of a shareholding in the Company in late November last year.  The Board's engagement with FS has included face to face meetings with the Chair and other members of the Board and senior management, a site visit, video calls and email correspondence. In the last six months there have been a significant number of interactions. 

This documented record of engagement directly contradicts the assertion in FS's notice that "constructive shareholder dialogue has been met with resistance".

The only material disagreement between the Board and FS concerned its request for a Board seat.  Further, FS has provided regular written positive feedback on the strategy, action taken, including the new NED appointments and recent progress made.

Request for Board seat

FS first requested a single Board seat in March 2026. That request was considered carefully but the Board concluded that it would not be in the interests of shareholders as a whole to proceed with that request. It has been raised on a regular basis thereafter by FS.

The requests of FS have shifted over time.  In the requisition notice they have sought:

·      Removal of the Chair, the Senior Independent Director and another Non‑Executive Director

·      The appointment of Stian Husvaeg, the Managing Director of FS, an activist fund manager and the requisitioner, with no flooring or PLC experience, as a NED

·      The installation of a Chair candidate known to FS with no flooring or PLC experience

The Board considers these requests disproportionate and destabilising, particularly given that many of the concerns raised by FS are already being addressed.

The Board also has concerns regarding the proposed appointment of Stian Husvaeg as an NED arising from certain recent activities, including:

·      Attempts to introduce a current employee of a competitor as a potential NED candidate to the Board

·      Engagement with suppliers, competitors, customers and former employees beyond normal shareholder activity and including the making of negative comments about the Board and the Headlam business, creating concern amongst important stakeholders

The Board's unwavering commitment

The Board remains fully committed to continued engagement with shareholders and intends to provide further detail on progress and strategy alongside the AGM on 20 May and its interim results in September.

The Board is confident that the recently refreshed Board (including a new Executive team and two new Non-Executive Directors) has the right experience to implement the Company's strategy and turnaround, and is getting on with doing so at pace.

The Board believes the Company now requires stability, focus and execution, not further disruption and that this is the best path to restoring confidence and long‑term shareholder value.

Yours sincerely,

Stephen Bird

Chair
On behalf of the Board of Headlam plc

Enquiries

Notes to Editors

Operating for over 30 years, Headlam is the UK's leading floorcoverings distributor. The Group works with suppliers across the globe manufacturing the broadest range of products, and gives them a highly effective route to market, selling their products into the large and diverse trade customer base. The Group has an extensive customer base, providing them with a market leading service through the largest product range, in-depth knowledge, ecommerce and marketing support, and nationwide delivery service. To maximise customer reach and sales opportunity, Headlam operates businesses, trade brands and product brands across the UK and Continental Europe (France and the Netherlands), which are supported by the group's network, central resources and processes.