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Topps Tiles sales slip as muted demand for "big ticket" items weighs

3rd Apr 2024 09:33

(Alliance News) - Topps Tiles PLC on Wednesday said first half sales fell as subdued retail demand offset a more resilient showing from trade customers.

Shares in Topps Tiles, the fell 3.0% to 42.70 pence in London on Wednesday morning.

In a trading update for the 26-week period ended March 30, Topps Tiles said total sales fell 5.9% to GBP122.6 million from the year before.

The weaker market, higher pay and seasonally higher energy usage would weigh on first half profit, the Leicester-based tile retailer said. Annual profit is expected to be weighted towards the second half.

The company said subdued demand in the domestic repair, maintenance and improvement sector, especially for bigger ticket projects, has persisted into 2024, resulting in lower footfall into stores.

But trade customers once again proved more resilient, although trade sales were also lower year-on-year, the firm said.

Topps Tiles said like-for-like sales were 11% lower year-on-year in the second quarter, driven by lower footfall and volume.

Gross margin improved, as cost of goods pressures continued to ease, but net profit was hit by lower volumes, operating cost inflation and the impact of operational gearing.

Trading in the online Pure Play business remained strong, with good growth in Pro Tiler and positive sales progress in Tile Warehouse, resulting in year-on-year sales growth of 38%.

Parkside continues to show a significant year-on-year improvement in its financial performance, the firm added, with the business expected to be at breakeven over the first half.

Topps Tiles said it was "well positioned" to benefit from a cyclical recovery in the RMI market and remains in a strong financial position, with a robust balance sheet.

The company said it would discuss new goal and future profit growth opportunities alongside interim results in May.

By Jeremy Cutler, Alliance News reporter

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