Topps Tiles pre tax profit grew from £9.9m to £12.4m in the 53 weeks to October 2 as the retailer kept a tight control on costs.
Like-for-likes increased 1.7% while total group revenue rose 2% to £182.4m.
In the first 7 weeks of the new financial year like-for-like growth improved, increasing 3.2%. Total revenue was up 2.9%.
However, adjusted pre tax profit declined from £17.5m to £16.3m, after impairment charges and other restructuring and one-off costs.
Topps Tiles said it outperformed the market, growing its share in the year from 23% to 25%.
Chief executive Matthew Williams said the retailer is now “financially well positioned” and can “progress plans for growth”. The group has 312 shops and plan to open “at least 10” stores in the coming year.
Topps Tiles has also begun construction of a second warehousing at its Leicestershire headquarters, at an expected cost of £3 million.
Net debt was reduced by £22.1m to £49.1m in the year.
Williams said: “This has been a robust performance from the business during a tough trading period, which demonstrates the effectiveness of our strategy and the strength and resilience of our business model.
“Through the prudent management of costs and careful control of our business, we have significantly reduced our net debt position during the period and continued to build on our market leading position.
“We are encouraged by current trading despite the challenging economic outlook and subdued levels of consumer confidence. We are confident that the business will benefit from our growth strategy and our continued focus on delivering outstanding value to our customers.”