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Pressure in housing market to affect Topps

Published: 27 May 2008
Analysts forecast drop in profits.
Topps Tiles is expected to report a three per cent fall in first-half profits tomorrow, according to analysts at the broker Dresdner Kleinwort.

For the six months to March 30, the analysts at the City investment house are predicting pre-tax profit of £17.7m, down from £18.3m in the previous corresponding period.

While analyst Andrew Wade of Seymour Pierce says the rising pressure on the housing sector will lead to further dips in performance following the company's first-half trading update.

He supports this by highlighting a deceleration in Topps Tiles' UK like-for-like sales growth of 0.5% in 1H, and a decline in like-for-like sales in Holland in 2Q.

However, analyst Philip Dorgan of Panmure Gordon maintains a more positive stance than the other two.

In a research note published today, he says Topps Tiles' interim results are expected to exhibit 'resilience'.

Although, he adds that Topps is likely to have taken interest charges of £2 million associated with a marked-to-market adjustment on hedging, which is expected to result in the pre-tax profits declining from £18.7 million to £15.5 million in the period.

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