Topps Tiles has posted a double-digit drop in profits amid its interim results, citing “adverse weather” and a challenging second quarter for its woes.
In the 26 weeks to March 31, the tiling retailer saw net revenues increase by 3.7 per cent to £110.5 million compare to the same period last year.
Despite the rise in sales, it saw pre-tax profits drop 32.6 per cent to £6.4 million, while its gross margin plunged 90bps to 60.3 per cent.
On an adjusted basis, revenues rose 2.8 per cent to £109.6 million, with adjusted pre-tax profits also dropping significantly by 28.7 per cent to £7.2 million.
This was reportedly due to a difficult second quarter, which saw like-for-like sales drop 2.2 per cent, offsetting the more promising 3.4 per cent rise in the first quarter.
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It managed to reduce its net debt over the period by £1.5 million to £25.1 million, and its interim dividend held at 1.1p.
“After a strong start to the year, market conditions became more challenging over the second quarter, when our like-for-like sales performance was also impacted by the adverse weather and the earlier timing of Easter,” chief executive Matthew Williams said.
“Against this background, our clear strategic focus, coupled with strong promotional positioning, enabled us to outperform the overall UK tile market.
“We continue to strengthen our position as the UK’s leading tile specialist. Our entry into the commercial tile segment approximately doubles the size of our addressable market while staying within our core specialism of tiles.
“Trading in the first seven weeks of the second half has improved on Q2, with like-for-like sales down by 0.2 per cent. While we are retaining a cautious view of market conditions for the remainder of the year, we remain confident in our ability to continue to extend our market leading position.”
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