Topps Tiles cheers ‘encouraging’ performance despite sales dip

Topps Tiles said trading over the six-month period to end of March had been “encouraging” even as a difficult first quarter pushed down sales.

Sales for the six-month period were almost flat on a like-for-like basis, growing by 0.2%, down from 0.6% in the previous six-month period in 2018.

Total revenues for the 26-week period were also lower than the previous period, £108.8 million, compared with £109.4m the year before.

Sales fell during the three-month trading period before Christmas last year, down 1.4%, but rebounded in the first three months of the year, with like-for like sales increasing 1.8%.

The firm’s chief executive Matthew Williams said he was “encouraged” by the group’s overall performance and said he believed the “successful execution” of Topp Tiles strategy would enable the company to “outperform the overall tile market”.

“Our commercial business is growing at pace and we remain open to opportunities to accelerate its expansion,” he added.

Topps Tiles said it completed 39 refits in its stores during the trading period, bringing the total number of refurbished stores to 180.

At the end of March, its retail estate comprised of 361 stores.

It once again emphasised the “flexibility” of its estate as a “key strength”, with an average lease term of four years, which it said it would continue to make sure its stores are always operating in areas of customer demand.

Topps Tiles endured a torrid 2018, with pre-tax profits down 25% to the end of September.

GlobalData analyst Hannah Thomson said: Topps Tiles and other DIY specialists are battling against tough market conditions, with housing transactions and weak consumer confidence inhibiting spending on big ticket items and DIY projects.

“For Topps Tiles’ H1 reporting period, this will have been compounded by uncertainty around the outcome of Brexit, which intensified during the final quarter of 2018 — GlobalData’s consumer sentiment tracker reported falling levels of consumer confidence between October and December.

“A slight recovery in January was short-lived, with consumers now feeling more negative about their personal finances and the economic outlook, as the prospect of a no-deal Brexit is increasingly raised by the media.”

But she added that GlobalData anticipated a recovery in the DIY market by 2020, which she said Topps Tiles “was wisely preparing for” by refreshing showrooms and launching new ranges – 20 so far this year.

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