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Topps Tiles Reports Record Interim Sales

Topps Tiles Watford Peter Fleming iStockphotodotcom 1418450114

Topps Tiles Plc, the UK's leading tile specialist, announces its unaudited consolidated interim financial results for the 26 weeks ended 1 April 2023. 

Strategic and Operational Highlights 

  • Record six-month period for sales of £130.3 million, up 9.3% year on year

  • Record first half for sales in the Topps Tiles brand, driven by nationwide store coverage, world class customer service, and strong omni-channel capability, with average sales per store up 30% compared to 2019

  • Strong results in Online Pure Play brands, with exceptional sales growth in Pro Tiler Tools

  • Group growth strategy on track to deliver market share goal of ‘1 in 5 by 2025’ ahead of schedule

  • Proud to be celebrating 60 years of trading since the first Topps Tiles store opened in Sale, Manchester in 1963, in a developed and diversified Group

Financial Highlights

 

26 weeks ended

26 weeks ended

YoY

 

1 April 2023

2 April 2022

 

 

(H1 2023)

(H1 2022)

(restated5)

 

Adjusted Measures

 

 

 

Topps Tiles like-for-like revenue year-on-year1

4.3%

19.7%

n/a

Adjusted profit before tax2

£4.4 million

£7.1 million

(38.0)%

Adjusted earnings per share3

1.57p

2.83p

(44.5)%

Adjusted net cash at period end4

£19.9 million

£13.4 million

£6.5 million

 

 

 

 

Statutory Measures

 

 

 

Group revenue

£130.3 million

£119.2 million

9.3%

Gross profit

£68.7 million

£66.9 million

2.7%

Gross margin %

52.8%

56.1%

(3.3) ppts

Profit before tax

£1.7 million

£5.6 million

(69.6)%

Basic earnings per share

0.25p

2.14p

(88.3)%

Interim dividend per share

1.2p

1.0p

20.0%

Financial Summary

  • Group revenue up 9.3% to £130.3 million

  • Group gross profit up 2.7% to £68.7 million

  • Group gross margin lower at 52.8%, due to rapid growth in Pro Tiler Tools, which operates at a lower gross margin, and adverse FX movements

  • Gross margin percentage within the Topps Tiles brand starting to increase as shipping and gas prices normalise

  • Adjusted profit before tax of £4.4 million, down 38.0% as previously guided, following adverse exchange rate movements and the impact of inflation on operating expenses

  • H1 profits were also impacted by a non-cash holiday pay accrual of £0.9 million which will reverse in full in H2

  • Cash increased £6.5 million against H1 2022, with strong operating cash flows and positive working capital movements

  • Robust balance sheet with £19.9 million net cash and £49.9 million headroom within committed borrowing facilities

  • Interim dividend of 1.2 pence declared (H1 2022: 1.0 pence)

Current Trading and Outlook

  • Like-for-like sales in Topps Tiles over the first seven weeks of the second half were up 4.1% on an underlying basis, with a negative impact of about 1.3 percentage points due to the additional bank holiday, giving overall like-for-like sales growth of 2.8%

  • Previous well-documented headwinds in supply chain, inflation and recruitment are now easing, strengthening our confidence in the gross margin and trading outlook for the second half

  • Profit in second half expected to increase materially, driven by the growth of our new businesses, improving gross margins, as well as gas costs reducing and holiday pay accruals reversing, giving confidence that we will perform in line with current market expectations for the year as a whole6

  • Our strategy is delivering, leaving us well-positioned to deliver our market share goal of ‘1 in 5 by 2025’ ahead of schedule

Commenting on the results, Rob Parker, Chief Executive said:

“As we mark our 60th anniversary, we are pleased to be reporting record first half revenue for the Topps Group, reflecting our successful development and diversification as we strengthen our position as the UK’s leading tile specialist.  Our Topps Tiles brand delivered a further period of robust like-for-like sales growth, with Pro Tiler Tools achieving another exceptional performance, to maintain its strong track record since acquisition in 2022. 

“As expected, our first half profitability reflects the impact of inflation year on year, including significantly increased energy costs, and a number of other one offs.  These effects are now reducing or will reverse in full in the second half, underpinning our confidence in a much stronger profit performance in the balance of the year.  Our strong trading, when combined with our successful strategy, world class customer service, leading product offer and strong balance sheet, gives us increasing confidence in our outlook.  We remain confident that we are on track to hit our 20% market share target ahead of schedule.”

Source : Topps Tiles

Image : Peter Fleming / iStockphoto.com (1418450114)

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24 May 2023

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