Topps Tiles has shrugged off a difficult start to the financial year to return a £12.5m pre-tax profit after a rapid turnaround in like-for-like sales.

The company reported a 4.7% slip in like-for-likes in the first half but returned a 3.5% increase in the second half to record a 0.7% fall in like-for-likes overall for the year to September 29. Topps Tiles said in the first seven weeks since year end, like-for-likes rose 1%.

Group sales increased to £177.7m from £175.5m the previous year while operating profit was £15.5m, up from £14m.

Topp Tiles chief executive Matthew Williams said he was “encouraged” by the performance given the trading environment and is focused on growing market share.

The company opened five new Topps Tiles stores in the year and converted 10 Tile Clearing House stores into the “more profitable” Topps format, which generated about 25% extra sales after conversion.

The retailer will also focus on further development of its online capability and “sustained marketing expenditure” to drive store footfall and build greater brand awareness.

Chairman Michael Jack said the retailer is evaluating the changes made in its Milton Keynes’ lab store to inform the design of future new stores. The retailer has also invested £20,000 per store in “light tough refits” on 18 stores.

Williams said: “Following a challenging start to our financial year we were encouraged by the progress in the second half, particularly considering the context of a tough retail environment. Like-for-like sales grew in both quarter three and quarter four and we also grew total revenues year on year. We have continued to move forward as a business and strengthen our market leading position.”

He added: “Looking ahead, we recognise that economic conditions are likely to remain uncertain throughout 2013. However, I believe that we are operating in an environment where customers value Topps’ unique blend of outstanding product range, affordability, industry leading customer service and locational convenience.”