Floorings specialist Topps Tiles full year profit before tax has plummeted 36% to £7.9m.
In the tiling retailer’s full year to October 1, adjusted profit before tax fell from £16.3m to £13.9m. Like-for-like sales slipped 2% and group revenue dropped 4% to £175.5m.
In the seven weeks since October 1, like-for-likes have slumped 6.9%.
The retailer’s chief executive Matthew Williams said: “We expect economic conditions will remain difficult in 2012, with consumers’ budgets again under pressure.#
“Our response will be to take further costs out of the business, grow margin and maximise sales opportunities, whilst making operational improvements that will position the business for future growth as economic conditions improve.”
The retailer experienced a decline in the second half of the year following a 1.8% rise in like-for-likes in the first half. Chairman Michael Jack said this was down to the combined effects of a deteriorating economic outlook, stagnation in the housing market and falls in domestic purchasing power undermining consumer confidence.
The retailer said market share had increased by 1% to 26% over the year and margin had increased 0.9% despite the drop in revenue.
Topps Tiles said it would focus on safeguarding margins and looking at further ways in which cost could be taken out of the business in 2012.
It also intends to improve product presentation in-store to inspire customers’ home improvement plans and develop its online channel to make it easier for shoppers to navigate.
The retailer, which grew its store portfolio from 312 to 320 this year, said it would look at opportunities to open “a limited number of new store” in areas where it is under-represented.
Williams said there is potential for up to 400 stores in the UK. The retailer opened a second warehouse at its Leicestershire headquarters over the year which it said would give it the capacity to grow its store numbers. The extra capacity also allows the retailer to source more products direct from manufacturers, rather than from third party distributors bringing a margin benefit.
The retailer, which increased marketing spend by £1m last year, plans to sustain that level of marketing investment. It plans to run a trade-focussed campaign during the year as it attempts to win more business from trade.