Strong second half boosts profits at Topps Tiles
Tiling and flooring retailer Topps Tiles has reported its first overall rise in year-on-year sales since 2007 as revenues grew by 1.2% to £177.7 million in the year to 29 September.
Despite a tough first half, the retailer’s pre-tax profits increased by 58% to £12.5 million in the year. While like-for-like sales fell by 4.7% in the first half of the financial year, there was an improvement in the second half when like-for-like sales rose by 3.5%.
The retailer said it had increased its market share by 1% to 27% in the year as a result of a new strategy which focused on its inspiring its customers in their home improvement projects. It also improved its offering to trade customers.
Topps grew its store estate to 352 in the year whilst simultaneously closing more unprofitable units. It also enhanced the appearance of existing stores and converted ten clearing house stores to the more profitable Topps format. In addition the retailer further developed its brand awareness through national TV advertising campaigns.
Gross margin increased to 60%, from 59.6% in the previous year, follwoing further supply chain efficiencies and a proactive management of the company's cost base.
Topps said it had made a good start to the new financial year with like-for-like revenues up 1% in the first seven weeks.
Commenting on the results, chief executive Matthew Williams said: "Following a challenging start to our financial year, we were encouraged by the progress in the second half, particularly considering the context of a tough retail environment. We have continued to move forward as a business and strengthen our market leading position.
"Looking ahead, we recognise that economic conditions are likely to remain uncertain throughout 2013. However, I believe that we are operating in an environment where customers value Topps unique blend of outstanding product range, affordability, industry leading customer service and locational convenience."
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