2nd Oct 2019 09:58
(Alliance News) - Topps Tiles PLC on Wednesday said its annual performance was hurt by challenges it faced in the final quarter, resulting in a decline in profit of as much as 3.1%.
The tiles retailer said adjusted revenue for the 52 weeks to last Saturday is expected to be about GBP214 million, compared to GBP214.8 million reported a year earlier. On a like-for-like basis, revenue for the year was up by 0.6%.
Adjusted revenue excludes the Parkside and Strata businesses which are being treated as an adjusting items during the first two years of ownership. Both businesses now form a part of the company's Commercial segment.
Parkside opened its new design studio in the Cotswolds during September, giving it a base of four locations across the UK, Topps noted. Meanwhile, in the Strata business, Topps said it has been focused on initial integration and achieving efficiencies.
Trading over the fourth quarter reflected a more challenging economic backdrop, Topps noted, with uncertainty hurting UK consumer sentiment. Like-for-like sales in the final quarter decreased by 1.9%, the company said.
Topps said it expects adjusted pretax profit for the year to be within the range of current market estimates, which is between GBP15.5 million and GBP16.0 million, with a consensus of GBP15.8 million. In financial 2018, Topps delivered an adjusted pretax profit of GBP16.0 million.
"Our sales growth across the group for the year as a whole compares favourably with the overall tile market. However, political uncertainty continued to weigh on consumer confidence in the final quarter and we expect this to remain a feature until there is greater clarity," said Chief Executive Matthew Williams.
He added: "Longer term, we are confident that our growth strategy will continue to deliver market outperformance."
In addition, Topps said its strategy of differentiation and innovation continues to deliver strategic advantage. The company launched 15 ranges in the fourth quarter of its recently ended financial year, and a total of 40 new ranges in the entire financial year, more than a third of which were developed in-house.
In the Retail division, Topps launched a new website on Tuesday which fully integrates its online offer with its stores. The company had 362 retail stores trading as at September 28 compared to 368 a year prior, having closed three sites during the fourth quarter.
In the Commercial unit, the company's strategy continues to make "good progress", it said, and Topps expects to report revenue of GBP5 million for the year.
Topps shares were trading 6.5% lower on Wednesday in London at 64.51 pence each.
By Evelina Grecenko; [email protected]
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