20th May 2025 12:33
(Alliance News) - Topps Tiles PLC shares climbed on Tuesday as it swung to a pretax profit in the first half of the year, amid an improved sales trend which has continued into the second half.
The Leicestershire, England-based tile retailer said it swung to a pretax profit of GBP1.9 million in the six months to the end of March from a loss of GBP1.5 million a year ago.
Revenue climbed 16% to GBP142.9 million from GBP122.8 million, while cost of sales increased 22% to GBP68.8 million from GBP56.5 million.
Shares in Topps Tiles were up 9.8% to 37.10 pence in London on Tuesday afternoon.
The company said its statutory pretax profit includes trading losses from CTD Tiles Ltd, costs associated with the UK Competition and Markets Authority investigation and a benefit of lower depreciation from impairments.
Topps agreed a GBP9 million purchase of 30 CTD Tiles stores in August last year, but following a phase 1 investigation, the CMA found sites in Dorking, Edinburgh, Inverness and Aberdeen created competition concerns in the supply of tiles to customers.
In April, it said it will divest the four CTD Tiles stores where the CMA identified potential concerns. At the time, the firm said this process is "being executed at pace" and is expected to complete "in the coming months".
Group operating profit multiplied to GBP5.2 million in the first half of the year from GBP797,000.
Adjusted pretax profit was up 3.2% to GBP3.2 million from GBP3.1 million. The firm swung to a GBP2.0 million gain in property adjustments from a GBP1.4 million loss, given the removal of a depreciation on impaired assets.
Topps Tiles said there was an improving trend in sales across the first and second quarters.
The company declared an interim dividend of 0.80 pence, down 33% from 1.20p a year ago.
It added that the full year dividend will be "at least consistent" with the prior year.
"I am pleased with the progress we have made over the first half, which has included an improving sales trend, offsetting the majority of our inflationary cost pressures, and continuing to deliver our strategy; while also delivering a small increase in underlying profitability," said Chief Executive Rob Parker.
Looking ahead, Topps said it has made a "strong start" to the second half, with adjusted sales up 9.5% in the first seven weeks of the year.
Like-for-like sales are 6.2% higher, while growth in other areas of the business has accelerated, Topps noted.
It said it is well-positioned to deliver sales and profit growth this year.
"As we look forward to the second half, current trading shows a strong improvement in both our market leading omni-channel business, Topps Tiles, and also in the newer parts of the group; and we have a clear plan to move CTD into profitability by the final quarter of our financial year and into growth beyond that. As a result, we expect our full year profits to show a meaningful improvement over the prior year," CEO Parker concluded.
By Michael Hennessey, Alliance News reporter
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