Story
Topps Tiles Expects Profit to Meet Forecasts Despite Modest Sales Decline
Summary
The British tile retailer anticipates full-year adjusted pretax profit will align with market consensus, even as group revenue dipped 1.3% amid a challenging home improvement market.
Topps Tiles PLC (LON:TPT) announced Thursday that it expects full-year profit to be in line with market expectations, demonstrating resilience despite a slight revenue decline caused by weak housing and home-improvement demand. The company signaled that its performance outpaced the broader market, which has faced significant headwinds.
Financial Performance
In a trading update for the 52 weeks ending September 26, the British retailer forecast an adjusted pretax profit of approximately £6.6 million. This figure aligns with the current analyst consensus range of £6.5 million to £6.7 million.
Group revenue, which includes the commercial tile business CTD, saw a modest decrease of 1.3% to £292 million, a decline the company attributed to store closures. Like-for-like sales at the core Topps Tiles brand were nearly flat, down just 0.1%. The company noted that it outperformed the wider home-improvement market, which contracted by about 1.7% during the period, according to the Barclays UK Consumer Spend Report.
Segment Highlights and Headwinds
A key area of strength was the Pro Tiler Tools business, which posted a record revenue of £42 million, an increase of 18.2%. The group's digital strategy also yielded positive results, with online sales growing to represent 22.7% of full-year revenue, up 3.7 percentage points from the prior year.
AdHowever, the company faced challenges during the fourth quarter, as periods of extreme heat disrupted activity among tradespeople and housebuilders, impacting both like-for-like sales and overall trade revenue. Despite this, Topps Tiles reported that sales trends improved in September.
Strategic Adjustments
Topps Tiles has completed a cost-cutting and store optimisation program that included changes to its store network, staffing model, and head office structure. As part of this, the CTD business now operates from 23 stores, down from 31 a year ago, following property decisions and disposals required by the UK's Competition and Markets Authority.
The company is also diversifying its product offerings, with revenue from newer hard-surface categories like outdoor tiles and shower panels rising 9.1%. The integration of the acquired Fired Earth brand also made a positive contribution to profit during the financial year.
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