Topps Tiles Plc, the UK's tile specialist, announces its interim results for the 26 weeks ended 31 March 2018, reporting first half like-for-like sales growing by 0.6%, reflecting strong trading in Q1 (+3.4%) followed by a more challenging market in Q2 (-2.2%) when sales were also impacted by adverse weather conditions and an earlier Easter.
Adjusted profit before tax of £7.2 million (2017: £10.1 million), the reduction being due to a decline in gross profit, combined with an increased investment in marketing and inflationary cost pressures.
Net debt reduced by £1.5 million year-on-year to £25.1 million.
Specialist service provided by colleagues in our 375 retail stores remains a crucial part of our customer offer, with almost all customers visiting a store at some point in their transaction for advice and support;
Updated store catchment analysis has identified a further 20-25 priority new store opportunities in locations where we are not currently represented.
Topps Tiles continues its seamless integration of digital and stores continues, with growing confidence in the direct linkage between online traffic and store footfall. There are also plans for continued new product development, with a proportion of sales from its new tile ranges equalling up to 15% of overall sales (2017: 10.2%) in the first half with 95% of its range being own brand or exclusive.
Topps Tiles has said that entry into commercial market through the Parkside acquisition has approximately doubled the size of the Group's addressable UK market whilst maintaining its specialism in tiles; and say good progress is being made with recruitment of talented sales teams and establishing central capability.
The company has said in its report that it has one new commercial showroom which has opened in Chelsea, with a plan to open two more in Clerkenwell and the Midlands during the second half.
Like for like sales over the 7 weeks to 19 May 2018 decreased by 0.2% (2017: decreased by 5.8%).
The company said: "We continue to take a prudent view of the second half outlook and expect that pre-tax profits for the full year will be within the current range of market expectations."
Commenting on the results, chief executive Matthew Williams said: "After a strong start to the year, market conditions became more challenging over the second quarter, when our like-for-like sales performance was also impacted by the adverse weather and the earlier timing of Easter. Against this background, our clear strategic focus, coupled with strong promotional positioning, enabled us to outperform the overall UK tile market.
"We continue to strengthen our position as the UK's leading tile specialist. Our entry into the commercial tile segment approximately doubles the size of our addressable market while staying within our core specialism of tiles.
"Trading in the first seven weeks of the second half has improved on Q2, with like-for-like sales down by 0.2%. 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."