Broker's note: Topps Tiles
KBC Peel Hunt has re-iterated its Buy recommendation on Topps Tiles following the release of its forecast-beating interim results today (May 27).The broker says Topps' pre-tax profit was well ahead of KBC forecasts with the outperformance generated from areas within management control such as cost savings. The company also delivered signs of improved current trading and there is now a belief among management that its debt covenants will not be breached.
This suggests a refinancing is less likely and contributes to the broker's 'Buy' recommendation and increase in its target price for Topps to 100p, which compares with an underlying share price of 74p following the 15% uplift today.
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