CAUTIOUS OPTIMISM AT TOPPS TILES
Topps Tiles Plc says it experienced flat sales in the 52 weeks to 29 September – but a like-for-like increase of 1.2 per cent in the final 13 weeks of the trading year. Overall adjusted revenues for the year are expected to be £215m, against £211.8m for the previous year.
Trading over the fourth quarter has seen an improvement due to a combination of the continued effectiveness of the company’s strategy, it says, as well as outperformance of the market. As a result, the Board now expects adjusted pre-tax profits for the year ended in September to be slightly ahead of the top end of the current range of market expectations.
Looking ahead, the uncertainty in the UK economic outlook means the company remains cautious and will maintain a focus on its industry-leading gross margins, tight cost control and strong underlying cash generation.
The Group is now trading from 370 sites (2018: 372 stores). Over 150 of the stores now benefit from the latest merchandising treatment and the company says it will continue this programme in the year ahead. During the year the company launched more than 25 new product ranges, exclusive to Topps.
On the commercial side, development has progressed at pace since the acquisition of Parkside in September 2017. Investments so far have expanded the sales resource, created two architectural showrooms in Chelsea and Leicester, and integrated the supply chain into the Group function. Sales growth and margin is in line with plan and new lead generation is very encouraging for the future. As expected, the company says, the commercial division will report trading losses of around £1.1 million for the 2018 financial year, while it continues to invest in future growth.
Matthew Williams, chief executive officer, says: “I am pleased to report an improvement in trading over the final quarter which has enabled the Group to post a full year sales result which is slightly ahead of the top end of market expectations and which represents an outperformance of the overall tile market. Our core Topps Tiles business is a well invested, cash generative market leader with a proven strategy and we continue to make good progress with our expansion into the commercial segment of the UK tile market which will be an important source of future growth for the Group.”