Topps Tiles has reported a double-digit drop in profits for its full year despite seeing growth in sales, as it ploughs investment into expansion.
For the year to September 29, total sales edged up 2.4 per cent to £216.9 million, but sales on a like-for-like basis dipped 2.9 per cent.
Meanwhile, pre-tax profits dived 25.3 per cent to £12.7 million and gross margins remained largely flat across the group at 61.3 per cent.
This stark drop in profits was largely due to the opening of nine new stores during the period, costing a total of £1.5 million alongside a further £1.8 million it invested into store improvements across its existing estate.
Its Parkside business, which Topps Tiles acquired at the tail end of last year, also came in at a £1.1 million loss and dragged down wider group figures.
“This has been an important year of strategic progress for the Topps Tiles Group, in which our expansion into commercial has seen us double our addressable market while remaining firmly within our tile specialism, where our buying scale and expertise gives us a significant competitive advantage,” chief executive Matthew Williams said.
“Against a challenging market backdrop, the group delivered a robust trading performance for the year with flat like-for-like sales and market-leading gross margins in retail, and the foundations laid for significant sales growth in commercial in the year ahead.
“At the start of the new financial year, trading conditions remain challenging and like-for-like sales in the first eight weeks have been negative against a strong prior year comparator.”