REG - Topps Tiles - First Half Trading Update

Topps TilesAnnouncement

03/04/2024 07:00

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RNS Number : 0540J  Topps Tiles PLC  03 April 2024

 

3 April 2024

Topps Tiles Plc

 

First Half Trading Update

 

Topps Tiles Plc ("Topps Group", or the "Group"), the UK's leading tile
specialist, announces a trading update for the 26-week period ended 30 March
2024.

 

Total Group sales in the first half were £122.6 million(1), down 5.9%
year-on-year, against a record revenue performance in 2023.

 

Subdued demand in the domestic Repair, Maintenance and Improvement ("RMI")
sector, especially for bigger ticket projects, has persisted into 2024,
resulting in lower footfall into Topps Tiles stores, especially across the
homeowner customer group.  Trade customers have once again proved more
resilient, although trade sales were also lower year-on-year.  While
conversion rates grew year-on-year and the brand made further improvements to
its already world-class customer service scores (up 1.0 percentage point
year-on-year to 92.5% overall satisfaction), like-for-like sales(2) in Topps
Tiles were 11.3% lower year-on-year(3) in the second quarter, driven by lower
footfall and volume.  As expected, the gross margin percentage in Topps Tiles
was up year-on-year as cost of goods pressures continued to ease, but net
profits were impacted by lower volumes, operating cost inflation and the
impact of operational gearing, despite strong cost control throughout the
period.

 

Trading in the Online Pure Play businesses remained strong, with good growth
in Pro Tiler and positive sales progress in Tile Warehouse, resulting in
year-on-year sales growth of 38.3%(1) over the first half.  The Group will
soon complete the acquisition of the remaining 40% shareholding in Pro Tiler
Limited, following the end of the earn-out period, and is delighted that the
co-founders will be remaining with the business as we continue to invest in
and grow the brand.

 

Parkside continues to show a significant year-on-year improvement in its
financial performance. Following the business improvement plan implemented
last year, we have achieved our short-term aim and expect the business to be
at breakeven over the first half, despite the difficult commercial market.

 

Group profitability in the first half of the year will be impacted by a number
of factors including the weaker market, the timing of the holiday pay accrual
and seasonally higher energy usage in the period. We continue to expect the
Group's profits in 2024 to be weighted towards the second half as indicated in
our Q1 trading update.

 

With its market leading brands, specialist expertise and world-class service,
the Group is well positioned to benefit from a cyclical recovery in the RMI
market. The business remains in a strong financial position, with a robust
balance sheet, and is focused on maximising market opportunities and emerging
in a stronger competitive position as the market improves. The Group plans to
discuss its new goal and future profit growth opportunities at the Interim
Results on 21 May 2024.

 

Notes:

(1) All revenue numbers are stated before accounting adjustments including
revenue recognition and customer returns provisions which will be included in
the Interim Results.

(2) Topps Tiles like-for-like sales is defined as online sales and sales from
Topps Tiles stores that have been trading for more than 52 weeks.

(3) Topps Tiles like-for-like sales in the second quarter were negatively
impacted by approximately 80 basis points due to the the first week of the
Easter holidays falling into the period, which is a quieter time for the
business with lower trade sales.  Last year, both weeks of Easter were in the
second half of the Group's financial year.

 

 

For further information please contact:

 

 Topps Tiles Plc
 Rob Parker, CEO         0116 282 8000

 Stephen Hopson, CFO
 Citigate Dewe Rogerson
 Kevin Smith             020 7638 9571

 Ellen Wilton

 

Notes to Editors

 

Topps Tiles Plc is the UK's largest specialist supplier of tiles and
associated products, targeting the UK domestic and commercial markets and
serving homeowners, trade customers, architects, designers and contractors
from 304 nationwide Topps Tiles stores, a commercial showroom in London and
eight customer-facing websites: www.toppstiles.co.uk
(http://www.toppstiles.co.uk) , www.parkside.co.uk (http://www.parkside.co.uk)
, www.protilertools.co.uk (http://www.protilertools.co.uk) ,
www.northantstools.co.uk (http://www.northantstools.co.uk) ,
www.premiumtiletrim.co.uk (http://www.premiumtiletrim.co.uk) ,
www.warmfloorstore.co.uk (http://www.warmfloorstore.co.uk)
www.flooringmaterials.co.uk (http://www.flooringmaterials.co.uk) and
www.tilewarehouse.co.uk (http://www.tilewarehouse.co.uk) .

 

Since opening its first store in 1963, Topps has maintained a simple operating
philosophy ‐ inspiring customers with unrivalled product choice and
providing exceptional levels of customer service.  For further information on
the Group, please visit www.toppsgroup.com (http://www.toppsgroup.com)

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