Topps Tiles Sees Strong Demand During Q1

Topps Tiles Plc (“Topps” or the “Group”), the UK's leading tile specialist, announces a trading update for the 13-week period ended 1 January 2022.

Trading has remained good in our omni-channel Retail business, with like-for-like sales on a two-year basis up 21.0% in the first 13 weeks of the year.  On a one-year basis, Retail like-for-like sales were 1.0% higher in the first 13 weeks against a very strong comparative in FY21 (FY21: +19.9%).  Compared to last year, we saw good levels of trading extending further into December as our customers sought to finish projects by Christmas.

During the quarter, we have taken significant steps to fully mitigate or pass through cost pressures caused by higher shipping costs and general inflation in cost of goods, thereby protecting gross profit.  However, as selling prices will increase by a lower percentage than cost prices, we do expect percentage gross margins to be moderately lower year on year as a result.

Operating costs in the business remain well controlled and in line with forecasts, despite the ongoing pressures in areas such as utilities, employment costs, fuel costs and taxation.

Our Commercial business has started the new year with good momentum and sales in the first three months are c. 21% higher than last year.

Against the backdrop of global supply chain challenges, over the first quarter we continued to hold higher levels of inventory than we have done historically.  This stock holding and the flexibility in our supply chain provide a buffer against the current uncertainties around the availability of both product and shipping and we believe we are well positioned relative to our marketplace.

Our stores have adapted to the additional Covid-19 control measures implemented at the end of 2021 and at this stage, we have yet to see any significant impact on customer behaviour.  Like many businesses, we are currently experiencing higher levels of staff absence due to confirmed or suspected Covid-19 infections, however our teams have responded superbly to this challenge and our stores are well-equipped to deal with more stringent social distancing.  Our strong operational focus and award-winning website position us well to trade through any period of tighter restrictions.

The business remains well capitalised and the balance sheet is strong.

Rob Parker, CEO, said: “We have made an encouraging start to the new financial year, with strong customer demand during the first quarter and like-for-like sales growth on both a two year and one year basis against tough comparatives.  Global supply chain challenges, higher staff absence due to Covid-19 and material cost price inflation continue to provide significant headwinds, however we are managing these challenges effectively.  I am confident that our successful strategy and strong balance sheet leave us well-positioned to deliver sustainable long term growth and our 20% market share goal of ‘1 in 5 by 2025’.”

Source : Topps Tiles

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