Topps Tiles reports overall rise in like-for-like sales during H1

Topps Tiles Plc (the "Group"), the UK's largest tile specialist, announces a trading update for the 26 week period ending 31 March 2018. The Board will announce interim results for the period on 22 May 2018.

Total revenues for the 26 week period were £109.4 million (2017: £106.6 million).

Like-for-like revenues for the 26 week period increased by 0.6%.

The Group ended the period with 376 stores, having opened 5 and closed 3 stores during the first half.

Trading in the second quarter has seen a slow down from the levels reported in Q1, with like-for-like sales down by 2.2%.  While we estimate that short term weather factors in late February and March, and the timing of an earlier Easter, account for around 1.6% of the second quarter like-for-like sales reduction, it is also clear that that there has been a softening of the underlying market.  We believe that we have continued to outperform the market which we attribute to the execution of our strategy and continued strong promotional positioning.

Analysis of LFL sales by quarter

Strategic Progress

We continue to invest in the business and to make good progress with our core strategy of "Out-Specialising the Specialists" to extend our market leading position in the UK tile market.  Specific strategic progress in the period includes:

• Commercial - we are investing in our Parkside business with an ambition to develop this into a leading brand in the commercial tile market.  We have launched a new website, parkside.co.uk, and are very encouraged by the response we have received in our drive to build a talented sales team.
  
  
• Range - we are seeing encouraging signs that we can leverage our buying scale and range advantage into the commercial segment, effectively almost doubling the size of our addressable market while staying within our specialism of tiles.
  
  
• Stores - we have commenced our all store improvement programme which will involve us implementing the latest customer merchandising treatments, such as our design advice area, across our entire estate over the next two years.
  
  
• Digital - Toppstiles.co.uk, has been voted a top 50 UK retail website by InternetRetailing.  The classification was for customer experience and was based on ease of navigation, usability, speed and customer service response times. 

Matthew Williams, Chief Executive Officer, said: "After a strong start to the year, market conditions have become more challenging over the second quarter. While the business has responded well with a performance ahead of the overall tile market, we are retaining a cautious view of market conditions for the remainder of the year."

Fiona Cincotta, the Senior Market Analyst at City Index, gave us her view:

“Nasty winter storms have taken a toll on sales but there's more to these weaker figures than the inclement weather. Management's claim that underlying trading has also softened will send a chill down the spine of investors who thought last year's woes had passed.

"British punters are evidently still shying away from splashing out on home renovations as the property market stalls and wage growth remains weak. To their credit, management is continuing to invest throughout the cycle and the commercial business still holds a lot of promise. However, with the strong first quarter proving to be something of a false dawn, investors will be losing patience.”

Source : Topps Tiles

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