Record Topps Tiles sales but inflation dampens profits
Topps Tiles has reported record sales driven, it said, by “nationwide store coverage, world class customer service, and strong omni-channel capability”.
The UK’s biggest tile specialist, which is marking its 60th year in business, said in the six months to April 1 it saw group revenues of more than £130 million, up 9.3 per cent on a year before.
Topps said its plan to take 20 per cent of the UK market by 2025 was now ahead of schedule with average sales per store up 30 per cent compared to 2019. However, adjusted pre-tax profits were down 38 per cent on the same six months a year earlier at £4.4 million, following adverse exchange rate movements and the impact of inflation on costs. The company did add that gross margins were heading the right way again as shipping and gas prices normalise.
In an interim trading update the business said: “Previous well-documented headwinds in supply chain, inflation and recruitment are now easing, strengthening our confidence in the gross margin and trading outlook for the second half.
“Profit in [the] second half [is] expected to increase materially, driven by the growth of our new businesses, improving gross margins, as well as gas costs reducing and holiday pay accruals reversing, giving confidence that we will perform in line with current market expectations for the year as a whole.
“Our strategy is delivering, leaving us well-positioned to deliver our market share goal of ‘1 in 5 by 2025’ ahead of schedule.”
Chief executive Rob Parker said: “As we mark our 60th anniversary, we are pleased to be reporting record first half revenue for the Topps Group, reflecting our successful development and diversification as we strengthen our position as the UK’s leading tile specialist.
“Our Topps Tiles brand delivered a further period of robust like-for-like sales growth, with Pro Tiler Tools achieving another exceptional performance, to maintain its strong track record since acquisition in 2022.
“As expected, our first half profitability reflects the impact of inflation year on year, including significantly increased energy costs, and a number of other one offs.
“These effects are now reducing or will reverse in full in the second half, underpinning our confidence in a much stronger profit performance in the balance of the year.
“Our strong trading, when combined with our successful strategy, world class customer service, leading product offer and strong balance sheet, gives us increasing confidence in our outlook. We remain confident that we are on track to hit our 20 per cent market share target ahead of schedule.”
