Topps Tiles: Interims Reveal Two Contrasting Trading Periods

Topps Tiles Plc ("Topps", "Topps Tiles", "the Group" or “the Company”), the UK's largest tile specialist, announces its interim consolidated results for the 26 weeks ended 27 March 2021. 

Strategic and Operational Highlights

• The Group’s first half performance reflects two distinct and contrasting periods of trading;

• Q1 saw record sales, with Retail like-for-like sales up 19.9% and margins in line with our guidance;

• Q2 was significantly impacted by trading restrictions, with homeowners (representing nearly half the Group’s usual customer base) unable to enter our stores for three months. While a strong digital performance and operational flexibility supported sales, Retail like-for-like sales were down 17.3% in the quarter;

• Commercial sales down 10% in H1 but with c 35% growth in sectors outside hospitality and leisure;

• The Group’s stores re-opened to all customers on 12 April and sales and margins are now recovering strongly – Retail like-for-like sales up 16.8% on a two-year basis in the five weeks since re-opening;

• Omni channel Retail proposition and expanding Commercial offer position the Group strongly to take advantage of an expected increase in consumer spending moving forward as we focus on our goal of ‘1 in 5 by 2025’.

Financial Highlights

Adjusting items are detailed in the notes here – these include items which are one-off in nature or can fluctuate significantly from year to year (such as some property-related items). 

Financial Summary

• Group revenue down 2.8%, including Retail like-for-like sales up 2.0% and total Retail sales down 2.4%, including the impact of store closures;

• Gross margins at 59.1% in Q1 and 55.4% in Q2 – recovering quickly following easing of lockdown;

• Adjusted profit before tax of £5.1 million, up significantly year on year as a result of strong sales in Q1, with trading losses in Q2 partially offset by business rates relief;

• £32.7 million increase in adjusted net cash against H1 2020;

• No interim dividend declared, however it is the Board’s intention to reinstate dividends by the end of year.

Current Trading and Outlook

• Rapid increase in sales and gross margins following easing of lockdown – two-year like-for-like sales +16.8%;

• Outlook for domestic home improvement remains strong;

• Commercial forward indicators improving – confident of improved performance over the second half.

"In another reporting period dominated by the impacts of Covid-19, Topps has once again shown its flexibility and resilience and I would like to thank all colleagues across the Group for the continued hard work and commitment underpinning these results.

Commenting on the results, Rob Parker, Chief Executive said:

“Inevitably, our first half results reflect two sharply contrasting periods of trading.  An exceptionally strong performance in Q1 demonstrated the ability of the business to bounce back following the initial lockdown.  Our performance in Q2, while materially stronger than in the first lockdown, was heavily impacted by the re-imposition of Covid-related trading restrictions at the start of the period.

“The re-opening of our stores to all customers on 12 April has once again been received very positively and we have seen a strong recovery in sales and gross margins, with Retail like-for-like sales 16.8% ahead of the same period in 2019 in the five weeks since re-opening.  We are confident of a much-improved performance in the second half and believe the Group remains well positioned to take advantage of an expected increase in consumer spending as we focus on our market share goal of ‘1 in 5 by 2025’.”

Source : Topps Tiles

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