For the 52 weeks to September 29, Topps posted a fall in pre-tax profits to£37.8 million, compared with£39.1 million last year. Topps chief executive Matt Williams said the performance was solid in a challenging environment and there remained an underlying growth trend in the retail tile market.
“If the housing market slows, we are compensated by the improve-don’t-move phenomenon,” he said. “There is also a misconception that we are a big-ticket retailer, but we have been wrongly grouped.”
Williams said Topps Tiles’ average sale is£65 and the retailer does not sell on credit, differentiating it from big-ticket furniture retailers.
Panmure Gordon analyst Christian Koefoed-Nielsen said that while there was a slight slowdown in like-for-like sales, Topps continued to trade well. He said there may be some cause for concern, because Travis Perkins has entered the market through its acquisition of Tile Giant, but believes there is room for both.
“Topps continues to compete strongly against the large DIY generalists through superior ranges, pricing and service,” he said. “A hands-on management team has managed costs and margin well during periods of weaker trading, which has driven competitors out of the market.”
Williams said he would continue to monitor Tile Giant. “I think Mo Iqbal [managing director of Tile Giant], who used to work for us, has been given a remit to deliver another Topps Tiles, but we’ll have to wait and see,” he said.
Topps opened 30 UK stores this year and a further five in Holland, bringing the respective shop totals to 246 and 20.
In the first seven weeks of this financial year, group revenues rose 8.4 per cent and like-for-like sales by 1.1 per cent. In the UK, revenue rose 8.1 per cent and like-for-like sales by 1 per cent.
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