Profit before tax (PBT) has fallen slightly year-on-year at DIY retailer Topps Tiles despite rising sales, according to full-year results published today.
Like-for-like sales grew 1.7 per cent in the 52 weeks ending September 26th compared to a 13.1 per cent drop the previous year, whilst total sales increased two per cent in 2010.
Adjusted PBT fell to £16.3 million during the period from £17.5 million in 2009, and gross margin dropped from 59.2 per cent last year to 58.7 per cent in these latest results.
Matthew Williams, CEO of Topps Tiles, said: “This has been a robust performance from the business during a tough trading period, which demonstrates the effectiveness of our strategy and the strength and resilience of our business model.
“Through the prudent management of costs and careful control of our business, we have significantly reduced our net debt position during the period and continued to build on our market leading position.”
The retailer has managed to cut net debt by £22.1 million in the year to its current position of £49.12 million, and a massive 133 per cent increase in capital expenditure has also hit the company’s profit margins.
UK stores increased from 309 to 312 in the 12 months and the Topps Tiles management team hope to open a further ten stores in the next year.
Construction has already commenced on a second warehousing facility at the retailer’s Leicestershire headquarters, which is expected to cost around £3 million.
Williams added: “We are encouraged by current trading despite the challenging economic outlook and subdued levels of consumer confidence.
“We are confident that the business will benefit from our growth strategy and our continued focus on delivering outstanding value to our customers.”
Topps Tiles’ market share rose from 23 to 25 per cent year-on-year, but of slight concern might be the drop in customer satisfaction, according to the retailer’s own findings, from 98.8 per cent to 97.6 per cent over the same period.