- Topps Tiles posts 13.2% jump in half-year pre-tax profit
- Like-for-like sales advance 4.7% in 26 weeks to April 2
- Gross margin jumps to 61.5% as direct sourcing pays dividends
- Topps hails “strong” start to second half as like-for-likes rise 8.4% in seven weeks to May 21
Topps Tiles has unveiled a jump in half-year profits and sales after store revamps and new ranges gained traction with shoppers.
The retailer said adjusted profit before tax climbed 13.2% to £10.3m during the 26 weeks to April 2, driven by “robust” 4.7% growth in like-for-like sales.
On a statutory basis, pre-tax profits rose 11% to £10.1m.
Topps Tiles said total sales grew 3.8% to £108m during the half-year as store upgrades and revamps attracted new shoppers to the business.
The retailer also hailed the impact of new ranges and product innovation on its overall performance, as new lines gained traction with shoppers.
At its second-quarter update last month, Topps said that ranges launched during the last 12 months now accounted for 8.7% of its overall sales.
The focus on introducing new, exclusive products and direct sourcing boosted the retailer’s gross margin to 61.5%, compared to 60.7% a year ago.
Trade sales now account for more than half of total sales, having increased to 51% from 48.3% in May 2015. Topps said that was driven by an “accelerating ‘do it for me’ trend” and the rollout of its trade loyalty scheme.
The retailer, which opened seven new stores and closed nine during the 26-week period, added that it has made a “strong” start to the second half of the year.
Like-for-like sales increased 8.4% in the seven weeks to May 21 as Topps presses ahead with its strategy of “out-specialising the specialists” in the DIY sector.
Topps added that two of the “simplification” initiatives it revealed at the year-end as part of that strategy had now been completed.
The retailer has completed the closure of all stores operating under the Topps Clearance format and consolidated its central teams into its head offices in Leicester.
Topps Tiles boss Matthew Williams said: “Topps has delivered a robust first half performance as our successful strategy of ‘out specialising the specialists’ continues to generate profitable sales growth.
“Initiatives to upgrade and rebrand our stores led more customers to reappraise the Topps brand and shop with us for the first time. Further improvements are in development and will be rolled out in the remainder of the year and beyond.
“We are confident our plans to extend the appeal of the Topps brand have significant further potential and are excited about the opportunities ahead.”