Shares in Topps Tiles fell over 5% earlier this morning, down 2.5% to 72.88p, after the company issued a profits warning ahead of its full year results.

In a trading update, the group said 'challenging' market conditions meant it now expected full-year profits to be at the 'lower end' of market expectations.

Previously, the company's profits were expected to be between £18.5million and £19.5million, down from an earlier estimate of £21.65million. 

Revenues for the year are expected to be in the region of £211.6million, down on £215million a year earlier.

Over the past few months the company said its like-for-like sales have fallen by 3% but sales have seen a 'moderate improvement' in the final quarter. 

“It has been an important development year for the Group,” said chief executive Matthew Williams. “Significant strategic progress has been made and we remain excited by the growth opportunities open to us. 

“Despite this, the tougher market conditions we first highlighted in Q2 continued into the final quarter and as a result, we are taking a prudent view on market conditions for the year ahead.

“We remain focused on our strategy of 'Out Specialising the Specialists' and are beginning to gain traction with a number of new initiatives. In particular, we have made progress in the commercial tile market, completing a small acquisition during the period and building more commercial capability internally. 

“We will update shareholders on this initiative in more detail at the time of our full year results in November.”

In the past year Topps Tiles has opened five stores, bringing its total across the UK to 372; and launched 34 tile ranges, with new products accounting for 9.2% of its tile sales for the year.