Trading Update

RNS Number:2493A
European Home Retail plc
23 March 2006


For Immediate Release                                          23 March 2006





                            EUROPEAN HOME RETAIL plc

                                 TRADING UPDATE

European Home Retail plc announces a trading update in respect of the year
ending 30 April 2006.

In our interim statement dated 7 December 2005 we said that we were starting to
see turnover at Kleeneze Europe slow down with sales of the main book, which
represents 60% of turnover, particularly disappointing.

Since then, despite year on year growth in our Christmas catalogue, the sales of
the main book have not picked up as seen in previous years and, overall,
turnover is now flat in Kleeneze Europe year on year.  As a result, we will not
be able to offset the increase in the costs that we highlighted at the interims.
Therefore, despite continuing to reduce the cost base, operating profit for
the year as a whole will be disappointing.

Our internet retailing businesses continue to grow strongly with year on year
turnover up 50% on a like for like basis.  We have taken the decision to drive
this growth through increased marketing expenditure and this will adversely
affect the results for the current year. Furthermore, the sudden dramatic
increase in demand at Kitbag over the Christmas period caused issues with
fulfilment and delivery, thereby incurring increased costs. As a consequence we
are accelerating our integration plans to ensure Kitbag is positioned to grow
profitability in the future.

As a result of the above, it is expected that the Group will record a small loss
before amortisation, exceptionals and tax for the year ending 30 April 2006.

It is the Board's current intention to pay a final dividend of 0.68p per share
which, when combined with the interim dividend of 1.12p, would make a total
dividend for the year ending 30 April 2006 of 1.80p.

The move to "as live" broadcasting at eeZee tv has resulted in the planned
reduction in overheads and we remain on target to break even at the operating
level for the year ending 30 April 2007.

The Board remains committed to the strategy of building a multi-channel retail
Group across catalogues, the internet and television shopping.  We continue to
drive growth in our internet retailing businesses and Kleeneze Europe's launch
in Germany is on schedule for May this year.  We are accelerating the
integration of our back office facilities and are focused on reducing the cost
base.  Having totally re-shaped the Group in the last three years, we continue
to develop the strengths of our existing operations to build shareholder value.

For further information contact:

European Home Retail plc                                  01793 606000
William Rollason, Chief Executive

Buchanan Communications                                   020 7466 5000
Suzanne Brocks/Elly Williamson




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