REG - Topps Tiles - Q4 Trading Update

Topps TilesAnnouncement

05/10/2022 09:34

For best results when printing this announcement, please click on link below:
http://newsfile.refinitiv.com/getnewsfile/v1/story?guid=urn:newsml:reuters.com:20221005:nRSE7852Ba&default-theme=true

RNS Number : 7852B  Topps Tiles PLC  05 October 2022

5 October 2022

Topps Tiles Plc

 

Q4 Trading Update

 

A second record year for sales; full year profits towards upper end of market
expectations

 

 

Topps Tiles Plc (or the "Group"), the UK's leading tile specialist, announces
a trading update for the 52-week period ended 1 October 2022.

 

Group Summary

 

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, finally, our
Parkside brand works directly with architects, designers and contractors in
the commercial market.

 

Group sales in the 52-week period were approximately £247.3 million(1), a
second consecutive record year of turnover, with year on year sales growth of
10.6% on a comparable 52-week basis(2).  Group sales in the 13 weeks to 1
October were 4.3% higher year on year(3), with positive progress from all
parts of the Group.

 

 Summary of year-on-year sales growth   Q4(3)   FY(2)
 Topps Tiles (like-for-like sales)      (1.2)%  +9.4%
 Online Pure Play (Pro Tiler Tools and  +46.1%  +34.3%

 Tile Warehouse - total sales)(4)
 Commercial (Parkside - total sales)    +39.9%  +28.6%
 Group (total sales)(1)                 +4.3%   +10.6%

 

 

Topps Tiles brand

 

Topps Tiles continues to perform well against a very strong comparative period
last year.  Like-for-like sales were 1.2% lower than last year in the final
quarter, with the underlying like-for-like sales trend similar to that
reported in the Q3 Trading Update.  Like-for-like sales growth for the full
year in Topps Tiles was 9.4%.

 

Average weekly sales per store in Topps Tiles this year are 25% higher than in
the pre-pandemic period of FY19.  Around half of this growth is due to the
transfer of sales from closed stores as we successfully rationalised our store
network and improved store sales densities, with the remainder due to
underlying sales growth, including particular strength in trade sales.

 

Trade customers are key to the business's resilience and growth as they
provide repeat custom and high levels of customer lifetime value, as well as a
crucial link to our homeowner customers.  Our trade customer base has grown
steadily over recent years, and has continued to increase over the period:

 

                                       FY15  FY19  FY22  Q4 FY22
 Trade customers:                      50%   56%   59%   60%

 % of sales in the Topps Tiles brand

 

 

Online Pure Play - Pro Tiler Tools and Tile Warehouse

 

Pro Tiler Tools, acquired in March 2022(5), is clearly focused on trade
customers and has continued its strong sales growth trajectory since
acquisition, with sales in the most recent quarter up 43.0% year on year(6).
Pro Tiler Tools, alongside our newest brand, Tile Warehouse, launched in May
2022, form an increasingly strong Online Pure Play offer.

 

 

Commercial - Parkside

 

Parkside, which is focused on architects, designers and contractors in the
commercial market, continues to deliver good levels of sales growth, with
year-on-year revenue up 39.9%(3) in the final quarter and 28.6%(2) in the year
overall, significantly outperforming the market.  In the final quarter of the
year, the business has moved to breakeven levels of profitability and is
expected to deliver a positive contribution to the Group's profitability from
FY23 onwards.

 

 

Group Profit, Cash and Balance Sheet

 

Overall, the Group's adjusted profits for the year are expected to be towards
the upper end of market expectations(7).

 

The Group has a positive net cash balance of approximately £15.9 million at
year end, with no borrowings.  We are in the final stages of renewing our
£39.0 million Revolving Credit Facility, which is currently committed until
summer 2023.  This will be replaced with a new £30.0 million facility, which
will be committed until autumn 2025 with an option to extend for a further two
years.  The new facility will contain a slightly favourable margin structure
compared to our existing facility and is expected to complete shortly.  This
new facility demonstrates the support of our banking partners and maintains
our significant balance sheet strength as we continue to invest in growth.

 

 

Rob Parker, CEO, said: "We are delighted to have delivered a second successive
year of record sales for the Group, with profits expected to be towards the
upper end of market expectations.  All parts of the Group contributed to this
performance and are making good strategic progress as we develop and diversify
the business.

 

"Our market leading omni-channel retail business, Topps Tiles, has performed
well against strong prior year comparatives and we are continuing to grow our
base of loyal trade customers.  Our expansion into the commercial market
through our Parkside brand is now generating in excess of £10 million of
sales, and we expect it to be profitable moving forwards.  This year we have
further expanded our activities into online pure play through the acquisition
of Pro Tiler Tools and the creation of Tile Warehouse - both of which present
further opportunities for profitable growth.

 

"The Group has worked hard to achieve a strong balance sheet with positive net
cash and this will serve us well as we move into a period of macroeconomic
volatility, leading to a more uncertain environment for consumers.  In this
context, our 20% market share goal of '1 in 5 by 2025' and our growth strategy
to deliver this will remain our primary focus, and we are confident that we
will deliver against them both."

 

 

 

 

(1) Before year end accounting adjustments including revenue recognition and
customer returns provisions. Includes sales from Pro Tiler Tools in the period
following acquisition only as per the Group's consolidated accounts.

(2) Compared to a pro rated 52 week period last year - the last financial year
contained 53 weeks.

(3) Compared to a pro rated 13 week period last year - last year's reported Q4
contained 14 weeks.

(4) Year on year growth for Pro Tiler Tools and Tile Warehouse have been
compared here to the relevant pre-acquisition period for Pro Tiler Tools in
2021 to give a meaningful comparison.

(5) 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.

(6) Year on year growth for Pro Tiler Tools (only) has been compared here to
the relevant pre-acquisition period for Pro Tiler Tools in 2021 to give a
meaningful comparison.

(7) Market expectations for adjusted profit before tax for the 52 week period
ended 1 October 2022 are in the range £13.8 million to £15.4 million, with a
consensus of £14.6 million.

 

 

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/)

This information is provided by RNS, the news service of the London Stock Exchange. RNS is approved by the Financial Conduct Authority to act as a Primary Information Provider in the United Kingdom. Terms and conditions relating to the use and distribution of this information may apply. For further information, please contact
rns@lseg.com (mailto:rns@lseg.com)
 or visit
www.rns.com (http://www.rns.com/)
.

RNS may use your IP address to confirm compliance with the terms and conditions, to analyse how you engage with the information contained in this communication, and to share such analysis on an anonymised basis with others as part of our commercial services. For further information about how RNS and the London Stock Exchange use the personal data you provide us, please see our
Privacy Policy (https://www.lseg.com/privacy-and-cookie-policy)
.   END  TSTUPGGCUUPPGMC