Topps Tiles’ profits have dropped dramatically due to inflationary pressures despite sales rising over the period.
The tile specialist’s adjusted pre-tax profits declined 29% to £7.2m in the 26 weeks to March 31, which the retailer put down to “inflationary cost pressures” and increased marketing spend. Statutory pre-tax profits plunged 32.6%.
The retailer told Retail Week it is “negotiating hard with landlords” to help mitigate some of its property costs.
Across the half-year, total sales advanced 3.7% to £110.5m and edged up 0.6% on a like-for-like basis.
Chief executive Matt Williams said it was a “tale of two quarters” – its second quarter more challenging than the first.
Like-for-likes dropped 2.2% in the second quarter as sales were impacted by “adverse weather conditions” and the early falling of Easter.
“Against this backdrop, our clear strategic focus, coupled with strong promotional positioning, enabled us to outperform the overall tile market,” Williams said.
Topps Tiles added that trade has picked up somewhat in the first seven weeks of the second half, when like-for-likes were down just 0.2%.
The retailer has recently entered the commercial tile market, doubling the size of its potential customer base. It is currently recruiting staff to bolster its commercial arm, with which it wants to disrupt the commercial tile market and become a new market leader over the medium term.
Williams said: “While we are retaining a cautious view of market conditions for the remainder of the year, we remain confident in our ability to continue to extend our market-leading position.”