REG - Headlam Group PLC - Board response to First Seagull letter

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RNS Number : 1120C  Headlam Group PLC  28 April 2026

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

 Headlam Group plc                           Tel: 01675 433 000
 Stephen Bird, Chair                         Email: headlamgroup@headlam.com (mailto:headlamgroup@headlam.com)

 Panmure Liberum Limited (Corporate Broker)
 Tom Scrivens / Atholl Tweedie               Tel: 020 3100 2000

 

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.

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