Topps Tiles says ‘tougher’ market will hit profits

Sales for the year to September 30 are expected to dip 1.6% to £211.6m after like-for-likes fell 2.9% on the previous year.

In its most recent quarter, like-for-likes dipped 3%, which it said was a “moderate improvement” in trading. Like-for-likes were down 4.7% in its third quarter and 4.1% in its second quarter.

Topps Tiles chief executive Matthew Williams said: “It has been an important development year for the group. Significant strategic progress has been made and we remain excited by the growth opportunities open to us.

“Despite this, the tougher market conditions we first highlighted in Q2 continued into the final quarter and, as a result, we are taking a prudent view on market conditions for the year ahead.”

Strategic progress

Topps, which trades through 372 stores, has pushed ahead with its strategy of “Out-specialising the specialists” and has “maintained good control” over gross margins and cost management over the year. 

It has boosted its range by introducing 34 new tiles over the past year and new products accounted for 9.2% of tile sales. It has focused on increasing the contribution of in-house developed ranges and now more than 83% of tiles stocked are exclusive to Topps.

Topps has also tried to boost its trade business through its Rewards+ loyalty scheme, which it launched a year ago. It now has 55,000 registered traders.

The tiles specialist also made an acquisition in the commercial tile market over the year.

Williams said: “We remain focused on our strategy of ‘out-specialising the specialists’ and are beginning to gain traction with a number of new initiatives.

“In particular, we have made progress in the commercial tile market, completing a small acquisition during the period and building more commercial capability internally. We will update shareholders on this initiative in more detail at the time of our full year results in November.”