Topps Tiles has announced a proposed share placing as it reported adjusted full-year pre-tax profits of £16.3m, down from £29.5m the year before.

The specialist retailer has said it will place up to 17 million shares, which is around 10% of its existing share capital, with new and existing shareholders. It said the proposed placing will give the group financial flexibility and help to support its growth.

Topps Tiles said that like-for-like sales for its full year to September 26 fell 13.5% but said current trading showed signs of stability with like-for-like sales in the UK up 2.2% in the first seven weeks of its new financial year.

Total group sales fell 10.6% to £186.1m for the year.

Topps Tiles chief executive Matthew Williams said: “The retail environment continues to be challenging and the outlook for consumer confidence remains uncertain. Against this context we are pleased to have delivered a performance that is in line with both management and market expectations and demonstrates the resilience of the business model with the continuing generation of both profit and free cashflow.”

He added: “We have the market leading position in our sector and an outstanding customer service ethic which will continue to serve us well particularly as consumer confidence returns.” 

The group has been hampered by its Dutch arm with like-for-like sales down 22.1% with a loss of £4.9m. It has closed ten stores in Holland mainly due to poor performance and the retailer said it did not expect to return to profit in the short term and would continue to review the business.