Topps Tiles: Like-For-Like Sales Hit By Political And Economic Uncertainty

Topps Tiles Plc (the “Group”), the UK’s largest tile specialist, announces a trading update for the 13 week period ended 28 December 2019.

Like-for-like retail revenues for the first 13 weeks of the current financial year decreased by 5.4% (2019: decreased by 1.4%).  As announced on 26 November 2019, retail like-for-like revenues across the first eight weeks of the quarter decreased by 7.2%.  For the final five weeks of the quarter, performance improved significantly, with the decrease in retail like-for-like revenues reducing to 1.4%. 

Strategic Progress 

• Group – the Group continues to focus on its core purpose to inspire customers through our love of tiles. We are also maintaining a tight focus on costs and on maximising the conversion of turnover into free cash flow.  During the quarter the success of our “Leading People” strategy was recognised by Glassdoor who presented Topps Tiles with an ‘Employees’ Choice’ award in the Best Places to Work category for 2020, where we were the highest placed retailer, finishing ninth overall. 
  
  
• Retail – our overall customer satisfaction score continues to improve, with 88% of customers telling us that they were “highly satisfied” across the quarter.  The Group continues to actively manage its store portfolio – ending the period with 361 stores, having closed one store and relocated another.
  
  
• Commercial – our entry into Commercial has approximately doubled our addressable market and our strategy of creating a new market leader continues to make good progress.  Commercial sales for the quarter were £2.3 million, an increase of c.250% year on year (or c.150% on a comparable basis) and we remain encouraged by our progress towards our target of a broadly breakeven outcome for the current financial year.  

Rob Parker, CEO, said: “Our first quarter performance reflects the full impact of the heightened political and economic uncertainty evident in the run up to December’s General Election, which we first noted in our 2019 full year results announcement.  Trading conditions remained challenging throughout the period and, against this backdrop, we ensured that we continued to offer our customers excellent value for money.  As expected, the retail like-for-like sales decline began to return to its pre-election trend towards the end of the quarter.  

“As we enter 2020, we remain confident that our market-leading retail offer and growing commercial operations give us a strong platform from which to deliver sustainable growth over the medium and long term." 

Topps Tiles will hold its Annual General Meeting on 22 January 2020.  In line with previous practice, no further update on trading will be given at this point. 

The Company will announce a trading update for the 26 weeks ended 28 March 2020 on 1 April 2020.

Comment

Nigel Frith, a senior market analyst at www.asktraders.com, gave his views on Topps Tiles' performance: 

"The weak first quarter update from Topps Tiles shows just how challenging the conditions were at the end of last year. Trading to a backdrop of political uncertainty ahead of the UK general election, customers were not in the mood for spending. According to the Office of National Statistics retail sales were weak across the board in November and the construction sector remained deep in contraction, as a result the odds were not looking good for Topps Tiles.

"Whilst sales are picking up post-election, the UK consumer is looking for more clarity over Brexit before spending will pick up in any meaningful way."

Source : Topps Tiles PLC

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