Topps Tiles sees profits and sales fall amid ‘weak market’
It added that macroeconomic lead indicators such as GDP, mortgage approvals and customer confidence are all improving however trading results are ‘yet to benefit from these upsides’
Topps Tiles posted a loss before tax of £1.5m for the 26 weeks ended 30 March 2024 as it faced a “challenging” tile market.
The group also saw revenues decline 5.8% to £122.8m, down from £130.3m the previous year. It said this was impacted by lower footfall which led to like-for-like sales falling 9.2% year-on-year. However, despite the performance it said it managed to increase its market share during the period.
Looking ahead it said the first seven weeks of the second half of the year have seen sales 7.3% lower year-on-year, with like-for-like sales 0.1% lower year-on-year, with no material changes to trends seen in H1 2024.
It added that macroeconomic lead indicators such as GDP, mortgage approvals and customer confidence are all improving however trading results are “yet to benefit from these upsides”.
Chief executive Rob Parker said: “Trading conditions in the first half have been challenging in a tile market which is down 20% against 2019. Against this backdrop, we are continuing to take market share, our online pure play businesses are growing strongly and the Group remains in a robust financial position. Lead indicators of market activity such as mortgage approvals, consumer confidence and smaller ticket DIY spend are improving, and while we are yet to see this feed through into our customer’s spending patterns, as market leader Topps Group remains well-positioned for recovery.
“Notwithstanding the challenges of current market conditions, we believe that Topps Group has a substantial opportunity to increase sales and profitability over the medium term through our new growth strategy of Mission 365.”
He added: “Mission 365 includes the development of new digital platforms for Topps Tiles trade customers; an increase in our addressable market of 75% by entering new product areas adjacent to our core tile specialism; a drive for accelerated growth in B2B markets through a more coordinated group-wide approach; and continued momentum in our high growth online pure play businesses, Pro-Tiler and Tile Warehouse. Together these initiatives represent an opportunity to grow sales to £365m over the medium term, while delivering profit before tax margins in the range of 8-10%.”
