Topps profits slump by a third after sales woes
The group reported a 32.6% plunge in pre-tax profits to £6.4 million for the six months to March 31.
Retailer Topps Tiles has seen half-year profits tumble by nearly a third after the Beast from the East and timing of Easter hit sales.
The group, which has 375 stores across the UK, reported a 32.6% plunge in pre-tax profits to £6.4 million for the six months to March 31.
On an underlying basis, profits fell 28.7% to £7.2 million from £10.1 million a year earlier.
It said like-for-like sales dropped by 2.2% in its second quarter amid the extreme weather in late February and early March, marking a sharp reversal from the first quarter when comparable sales grew 3.4%.
Sales have continued to fall since the first half, but Topps has narrowed the decline to 0.2% in the seven weeks to May 19.
Topps said it continued to “take a prudent view” of trading over the rest of its financial year, but stuck by full-year profit guidance.
Shares lifted 3% after the half-year results.
Matthew Williams, chief executive of Topps, said: “After a strong start to the year, market conditions became more challenging over the second quarter, when our like-for-like sales performance was also impacted by the adverse weather and the earlier timing of Easter.”
“While we are retaining a cautious view of market conditions for the remainder of the year, we remain confident in our ability to continue to extend our market leading position,” he added.
Analysts are expecting Topps to post a 6.4% drop in annual profits, at £15.9 million, down from £17 million the previous year.
The chain has been grappling with a slowing housing market and a slowdown in the wider economy.
It saw annual profits slump 15% in the year to September 30.
But while trading has been impacted in the last few months, the group has seen an improvement on the big sales declines reported last year.
Overall comparable sales fell 0.6% in the latest half-year, which is an improvement on the 1.9% drop seen a year ago.
Topps is also leading a push into the commercial tiles sector, having bought commercial specialist Parkside last August.
It plans to become the market leader in the commercial tiles market, which represents around 45% of the overall UK tile market.
Analysts at Liberum said: “Topps’ leading, specialist market position leaves it better placed than competitors in a tough current market and the group’s longer-term growth prospects, including within the UK commercial tile sector, remain very much intact.”