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Topps Tiles reports improved trading after grim second quarter
Topps Tiles said trading had improved in recent weeks after the tile retailer suffered a sharp slowdown in the second quarter of its financial year.
Reporting first-half results, the tile retailer said sales at stores open a year or more edged down 0.2% in the seven weeks since the end of March.
Like-for-like sales rose 0.6% in the six months to 31 March but a 3.4% increase in the first three months of the year was followed by a 2.2% drop in the second quarter as bad weather and an earlier Easter affected the figures.
Pre-tax profit in the six months to 31 March fell 32.6% to £6.4m. Revenue increased to £110.5m from £106.6m as Topps added more stores.
Operating costs rose by £4.6m to £59.8m as the company opened stores and spent more on marketing and wages. Inflation accounted for £1.1m of extra costs.
Matthew Williams, Topps' chief executive, said he expected full-year pre-tax profit to be within the range of market expectations. Analyst forecasts range from £15.5m to £16.5m and consensus is £15.9m.
Williams said: "After a strong start to the year, market conditions became more challenging over the second quarter. Against this background, our clear strategic focus, coupled with strong promotional positioning, enabled us to outperform the overall UK tile market.
"Trading in the first seven weeks of the second half has improved on Q2. 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."
Topps' performance is linked to the UK property market, which has virtually stalled amid economic uncertainty. The company is branching out into commercial tile sales in a move it says doubles its potential market.
The company's shares were up 3% to 71p not long after midday on Tuesday.