Topps Tiles toughs it out.
Topps Tiles remains on track to meet full year expectations after a small improvement in like for like sales.The company said that group revenue fell 9.9 per cent in the 18 weeks ended 1 August and like for like sales by 10.9 per cent. In th e previous year they fell 3 per cent and 8 per cent respectively.
Figures for the first seven weeks of the new financial year had shown a 9.6 per cent drop in revenue and 11.9 per cent fall on a like for like basis.
Singer Capital Markets had recently re-iterated its 'Buy' recommendation on Topps Tiles ahead of its Q3 trading update on August 5.
The broker said there was evidence that conditions in the market may be stabilising and that Topps is picking up business from failing independents. Singer expected Q3 trading to be down 10% on a like-for-like basis, which is an improving trend and the broker therefore believes forecasts are too conservative on Topps.
Singer can see scope for forecast upgrades during the course of the rest of the year. Topps is on a PE of 15x and the broker suggests the company has the potential for further outperformance in the near term. It retains its price target of 80p
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