Topps Tiles half-year profits soar helped by improving consumer confidence

Like-for-likes jumped 10.2% over the half and continued to grow in its second half, advancing 5.6% in the seven weeks to May 17.

Group sales rose 11.7% to £97.7m over the half. Gross margin increased 1% to 60.8% as it achieved further supply chain efficiencies.

Topps Tiles chief executive Matthew Williams said: “While trading conditions undoubtedly improved during the period, helped by a higher level of consumer confidence, we believe our first-half sales growth was significantly ahead of the overall tile market. Our strategy continues to focus on market share gains driven by offering an authoritative and differentiated range, outstanding service, and multichannel convenience, resulting in excellent overall value for money.” 

Williams told Retail Week:  “We’re really happy with the result. We had a bit of a helping hand from the market, it’s back to small levels of growth.

“Our outperformance of the market has been very strong. Easter revived itself as an event, the build was stronger than in recent years. And we were quite strong promotionally.”

He added: “We’re very focused on continuing to take market share, it’s our number one goal.”

Williams said at the end of its last financial year Topps held a 28.5% share, and he believes that the retailer has further built on that. “We’ve had a strong year in terms of taking market share. We’re well on our way to our target of taking a third of the market.”

Williams said that while improvements in the housing market were encouraging, Topps Tiles was more influenced by movements in consumer confidence.  He said 85-90% of sales “don’t include a house move”.

He described consumer confidence as “healthy and moving in the right direction”.

Williams insisted the slow down in like-for-like growth since period end more reflected the stellar first half rather than a disappointing slow down.

“It’s more a case of looking to the first half and asking how it was so strong,” said Williams.

He said the three Boutique trial stores in Clapham Junction, Islington, and Walton-on-Thames are performing “ahead of plan”. Topps Tiles will open a further two in undisclosed locations before making an assessment on whether to roll it out.

The retailer reduced its debt by £8.6m to £36.3m over the half.