Topps Tiles saw sales drop as shoppers held back on big-ticket home improvement spending.
The tile specialist saw adjusted revenue fall 5.4% to £248.5m for the 52 weeks to 28 September 2024, while adjusted profit-before-tax dropped from £12.5m to £6.3m.
The retailer said demand had been impacted by shoppers reluctance to spend on big-ticket items, which had resulted in a drop in volumes. However, Topps managed to take market share despite the trading environment.
Topps warned that changes in the secondary threshold and national insurance contributions would drive almost £4m in additional costs when they’re introduced from April, including a £2m impact in the 2025 financial year. The retailer said the costs would need to be “managed very carefully” and that the business was currently ”formulating plans to mitigate these costs as far as possible”.
Topps Tiles chief executive Rob Parker said: “2024 has been a challenging year for RMI and especially bigger ticket spend. In the tile market, volumes remain well below pre-pandemic levels. Whilst Topps Group is not immune to these pressures, our growth strategy has served us well and we have continued to outperform the wider tile market.
“The start of the new financial year has seen a return to modest sales growth for the Group, helped by weaker prior year comparatives and the continued strength of our trade offer. Whilst pleasing, the forward macro indicators for our market remain mixed, in particular weaker consumer confidence, and we need to see a sustained improvement in these metrics before we can be confident of a consumer recovery.
“‘Mission 365’, which sets ambitious revenue and profit medium-term goals, has focused the business around key areas of growth and we have delivered good progress against these over the second half – notably our trade digital offer, our plans to significantly expand our addressable market into hard surface coverings, trade business to business opportunities with the acquisition of CTD Tiles and the strong growth in online pureplay. The robust strategic progress being made now to position the business for the future leaves us well-placed for a recovery in market volumes and underpins our confidence in the medium-term outlook.”
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