REG - Topps Tiles - Q1 Trading Update

Topps TilesAnnouncement

11/01/2023 07:00

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RNS Number : 2987M  Topps Tiles PLC  11 January 2023

11 January 2023

Topps Tiles Plc

 

Q1 Trading Update

 

Topps Tiles Plc ("Topps Group", or the "Group"), the UK's leading tile
specialist, announces a trading update for the 13-week period ended 31
December 2022.

 

Group

 

The Group has developed and diversified in recent years and now operates
across three business areas: our omni-channel Topps Tiles brand is the clear
market leader in the UK and offers specialist product expertise and
world-class customer service to trade and homeowner customers; our Online Pure
Play offer consists of Pro Tiler Tools and Tile Warehouse; and our Parkside
brand works directly with architects, designers and contractors in the
commercial market.

 

Group sales in the 13 weeks to 31 December 2022 were 10.2% higher year on
year(1), with approximately half of this growth due to the comparative period
in 2021 being prior to the acquisition of Pro Tiler Tools.

 

Omnichannel - Topps Tiles

 

Topps Tiles continues to perform well and has delivered a strong first
quarter.  Like-for-like sales(2) were 5.1% higher than last year, with total
sales growth in Topps Tiles approximately 2 percentage points below this due
to a lower average number of stores trading this year(3).  The timing of
Christmas and New Year benefitted first quarter sales by about half a
percentage point.  Overall, the business delivered another strong period of
trading in the weeks leading into Christmas, and sales to trade customers
continued to be an area of particular strength.

 

Online Pure Play - Pro Tiler Tools and Tile Warehouse

 

Pro Tiler Tools, acquired in March 2022(4), has continued to grow at an
exceptional rate, with sales in the most recent quarter up significantly year
on year.  The introduction of new, trade-focused brands, further investment
in stock and a continued focus on outstanding customer service have
contributed to this performance, and we are currently working through options
to deliver additional value to the Group through the Pro Tiler team.  Tile
Warehouse, launched in May 2022, is now largely through the initial start-up
phase and we are now focusing on driving more traffic to the website and
higher levels of conversion.

 

Commercial - Parkside

 

Parkside's financial performance improved at pace in FY22 and, following a
strong second half, the business was trading at breakeven by the final
quarter.  Parkside is targeted to deliver a modest profit this year.

 

Summary

 

Overall, the financial year has started well.  Following strong market share
growth in FY22, our focus remains on our goal of '1 in 5 by 2025'(5), which we
now expect to deliver ahead of schedule.

 

As previously disclosed in the 2022 full year results, we expect Group
profitability in the current financial year to be more second half weighted
than is usually the case.  The drivers of this are a significant year on year
increase in our gas expense which will be weighted towards the autumn and
winter period, the timing of various accruals, the impact of the newer
businesses and some easing in supply chain costs as the year progresses.

 

The business remains strongly cash generative, with the balance sheet, cash
flows and profitability remaining in line with our expectations.

 

Rob Parker, CEO, said: "We are pleased with what has been a strong first
quarter of the new financial year, with strong like-for-like sales growth in
Topps Tiles of 5.1%, excellent performance from our recent acquisition, Pro
Tiler Tools, and overall Group sales up 10.2% compared with the same period
last year.

 

"We remain mindful of the macroeconomic headwinds which may impact UK
consumers and businesses in the forthcoming year, but the Group's strong
balance sheet, world class customer service, specialist expertise and
ambitious growth strategy gives us confidence that we will continue to deliver
value over the medium term."

 

(1) Group revenue growth is stated before accounting adjustments including
revenue recognition and customer returns provisions. Includes sales from Pro
Tiler Tools and Tile Warehouse in FY23 compared to £nil sales recognised in
in the Group's consolidated accounts for Q1 FY22 in the pre-acquisition /
pre-launch period.

(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) The lower number of stores this year is as a result of the store closure
programme, which has now been completed.

(4) 60% of the share capital of Pro Tiler Limited was acquired in March 2022,
with options in place to acquire the remaining 40% in March 2024.

(5) Refers to Topps' goal of accounting for £1 in every £5 spent on tiles
and associated products in the UK by 2025, thereby increasing its market share
to 20% from approximately 17% in 2019.  In the 52 weeks ended 1 October 2022
the Group's market share increased to 19.0% (2021: 17.6%).

 

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 refurbishment and commercial
markets and serving homeowners, trade customers, architects, designers and
contractors from 304 nationwide Topps Tiles stores, four commercial showrooms
and six 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) 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 http://www.toppstilesplc.com/
(http://www.toppstilesplc.com/)

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