A Topps Tiles analysts’ trip last week helped convince the City that the retailer is a “good recovery story”.


Ambrian analyst Philip Dorgan, who went on the visit, said that “as sales per store improve, so will margins and this will have a geared effect upon the shares over the next three years”.

He argued: “We still believe that Topps is a good recovery story, albeit one that has had a false start. Management has cut costs during the recession and yet retained its core investment in customer service and in product development.”

Dorgan maintained that “some recovery” in housing transactions, which are running at half the long-term average, “would be helpful to Topps’ sales”.

During the recession, he said, Topps Tiles’ profits were driven down by £25m and gross margins have fallen by nearly £7m because of discounting and currency pressures.