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Topps Tiles reports 4.7% rise in half year LFL sales

Topps Tiles

Topps Tiles Plc, the UK’s largest tile specialist with 345 stores, announces its interim results for the 26 weeks ended 2 April 2016./live/news/wysiwyg/2016-05-24 Topps Tiles.JPG

Financial Highlights

• Total sales growth of 3.8%, with like-for-likes sales ahead by 4.7%
• Gross margin increased to 61.5% (2015: 60.7%) driven by increased direct sourcing, product exclusivity and new product introductions
• Adjusted EPS growth of 15.5% year on year (2015: 14%)
• Net debt reduced by £2.6 million year on year to £28.4 million
• Interim dividend increased by 33% to 1.0p (2015: 0.75p)

Operational Highlights

• Successful strategy of “Out Specialising the Specialists” delivers profitable sales growth
• Multiple initiatives to strengthen Topps’ position as the UK’s leading tile specialist including development of exclusive ranges/brands, product innovation and exit from non-tile lines
• Two key simplification initiatives announced at year end - exit from the Topps Clearance format and consolidation of central teams into our main office in Leicester - now complete
• Seven new core stores opened (four new sites and three conversions from the Topps Clearance format), offset by nine closures (eight from the exit of the Topps Clearance format)
• Trade sales increased to 51.0% of total (2015: 48.3%) driven by accelerating “do it for me” trend and extension of successful trade loyalty scheme

Current Trading and Outlook

• The Group has made a strong start to the second half
• Like for like sales over the 7 weeks to 21 May 2016 increased by 8.4%5 (2015: increased by 6.3%)

Commenting on the results, Matthew Williams, Chief Executive said:

“Topps has delivered a robust first half performance as our successful strategy of “out-specialising the specialists” continues to generate profitable sales growth. Like-for-like sales grew by 4.7% in the period as initiatives to upgrade and rebrand our stores led more customers to reappraise the Topps brand and shop with us for the first time. Further improvements are in development and will be rolled-out in the remainder of the year and beyond.

“The Group has made a strong start to the second half, with like-for-like sales growth of 8.4%5 in the first seven weeks of the period. We are confident our plans to extend the appeal of the Topps brand have significant further potential and are excited about the opportunities ahead.”

Click to view the full publication here.

Click to view the Interim Results Presentation here

1 Adjusted operating profit is adjusted for business restructuring costs of £0.4 million and loss on disposal of plant, property and equipment of £0.1 million. The prior interim operating profit was adjusted for the gain on a lease surrender of £0.6 million, losses on disposal of plant, property and equipment, movements in onerous provisions and business restructuring costs of £0.1 million (charge).
2 Adjusted profit before tax is adjusted for the effect of the items above plus £0.2 million non-cash gain relating to forward currency contracts the Group (defined as Topps Tiles Plc and all its subsidiaries) has in place (per IAS 39) (2015: £0.1 million non-cash gain),
The prior interim adjusted profit before tax is adjusted for an increase to the provision for interest charges relating to historical HMRC corporation tax enquiries of £0.5 million.
3 Adjusted for the post tax effect of the above items.
4 Net debt is defined as bank loans, before amortised issue costs (note 6) and less cash and cash equivalents.
5 Current trading LFL sales growth was impacted by the earlier Easter in 2016. We estimate this increased LFL sales growth in the seven week current trading period by c.1.1%

Source : Topps Tiles Press Release

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24 May 2016

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