Topps Tiles upbeat as it pays dividend

BRITISH tile and wood flooring retailer Topps Tiles was yesterday upbeat on its prospects in the face of tough economic headwinds, saying its focus on customer service has paid off and it will restart its dividend.

“I do not really see there being any reason why we cannot continue to take market share. But if the market is down, there is little we can do apart from continue to outperform that market,” chief executive Matthew Williams said yesterday.

Williams said Topps Tiles was winning share both from large DIY sheds – Kingfisher’s B&Q, Home Retail’s Homebase and Travis Perkins’s Wickes – as well as from small independent players.

He was speaking after the 312-store Topps Tiles met forecasts with a seven per cent fall in full-year profit, resumed dividend payments and reported solid current trading.

Sales at stores open over a year were up 3.2 per cent in the first seven weeks of the company’s new financial year.

Arden Partners analyst Nick Bubb said the current trading data was “encouraging and better than expected”.

Williams said there was pent-up demand for tiling projects, which typically average £300-£350. “At some stage these things have to start coming through because people need to get on with life.”

Topps made an underlying pre-tax profit of £16.3m in the 53 weeks to 2 October, in line with analyst forecasts of £14.5m to £16.6m and up from £17.5m in 2008-09.

Revenue rose two per cent to £182m, with sales at stores open over a year up 1.7 per cent.
Topps, which cut net debt by £22.1m to £49.1m, is paying a final dividend of 1p.

Yesterday its shares closed up 1.69 per cent at 60p.

Source : Harry Banks - City AM