Profits fall at Topps Tiles in 'challenging' first half
Topps Tiles saw its statutory pre-tax profit decline by 5.9% to £9.5 million in the first half of its financial year as like-for-like revenue edged down 1.9%.
Total revenue decreased by 1.3% to £106.6 million in the six months to 26 April while adjusted pre-tax profit fell by 1.9% to £10.1 million.
In statement, the company said it put in a “solid” performance in a challenging market and against strong comparatives from 2016 when sales benefited from changes to Stamp Duty.
Matthew Williams, Topps tiles chief executive, explained: "Our results for the first half reflect the more challenging macro-economic environment we have traded through so far in 2017 and the strong performance we delivered in the corresponding period in 2016 when housing transactions were boosted ahead of the changes to Stamp Duty.
“While these tougher comparatives begin to ease from the end of June, the key macro indicators for our market are weaker year-on-year and we are taking a prudent view of the second half prospects.”
A net eight new core stores opened during the six month period taking the total to 359. The company is planning to launch around 10 new shops in the second half.
Reporting on more current trading, the company said like-for-like sales over the seven weeks to 20 May dropped by 5.8%. Topps now expects pre-tax profits for the full year to be towards the lower end of the range of market expectations.
Williams continued: "Against this background, we remain confident in the longer term outlook for the business, as evidenced by the 10% increase in the interim dividend. We will continue to focus on executing our proven strategy of "Out-Specialising The Specialists" and to invest in important sources of future growth.
“In particular, our recently completed analysis of the UK commercial tile market has confirmed it as attractive and we are now evaluating a number of small acquisition opportunities to increase our reach into this part of the market."
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