Topps Tiles PLC Trading Update (4097O)

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RNS Number : 4097O

Topps Tiles PLC

02 October 2019

2 October 2019

Topps Tiles Plc

Trading Update

Trading

Topps Tiles Plc (the "Group"), the UK's leading tile specialist, announces a trading update for the 52 week period ending 28 September 2019.

Adjusted revenues(1) for the 52 week period are expected to be in the region of GBP214 million (2018: GBP214.8 million). Like-for-like revenues in the 52 weeks were ahead by 0.6% when compared to the prior year (2018: LFL flat).

Trading over the fourth quarter reflected a more challenging economic backdrop, with uncertainty impacting on consumer sentiment and like-for-like sales decreased by 1.9%.

Adjusted pre-tax profits for the year ending 28 September 2019 are expected to be within the range of current market estimates.(*)

* The current range of analyst forecasts for adjusted pre-tax profits for the 52 week period ending 28 September 2019 is GBP15.5 million to GBP16.0 million, with a consensus of GBP15.8 million.

Analysis of LFL sales by quarter

 
              Q1       Q2     First     Q3       Q4       H2      FY 
                               Half 
 FY 2019    (1.4)%   +1.8%    +0.2%   +3.8%    (1.9)%   +0.9%    +0.6% 
           -------  -------  ------  -------  -------  -------  ------ 
 FY 2018    +3.4%    (2.2)%   +0.6%   (2.3)%   +1.2%    (0.6)%   0.0% 
           -------  -------  ------  -------  -------  -------  ------ 
 

(1) Adjusted revenues exclude the Parkside and Strata businesses which are being treated as an adjusting item during the first two years of ownership while we invest for future growth.

Strategic Progress

 
      --   Group - our "Leading Product" strategy of differentiation 
            and innovation continues to deliver strategic advantage. 
            We launched 15 ranges in Q4, and a total of 40 new ranges 
            in the year, more than a third of which were developed 
            in-house. Continued progress on leveraging our buying 
            scale and advantage into the commercial sector means 
            that almost 70% of Group purchases have been made through 
            our core supplier group this year. 
      --   Retail - we launched our new website on October 1(st) 
            which fully integrates our online offer with our stores, 
            as we continue our journey towards a true omni-channel 
            capability. Our customer feedback ratings continue to 
            be very strong with an overall satisfaction score for 
            the year of 86% - ranking us #3 within the UK retail 
            sector (source: Institute of Customer Service). The 
            Group ended the period with 362 retail stores trading 
            (2018: 368), having closed three sites during the fourth 
            quarter. 
      --   Commercial - Our entry into the commercial tile market 
            has approximately doubled our addressable market while 
            staying within our core specialism of tiles. Our strategy 
            of "Disrupt and Construct" continues to make good progress 
            and we expect to report revenues of c.GBP5 million for 
            the year. Parkside opened its new design studio in the 
            Cotswolds during September, giving it a base of four 
            locations across the UK. In the recently acquired Strata 
            business we have been focused on initial integration 
            and leveraging efficiencies. 
 

Matthew Williams, Chief Executive Officer, said: "Despite continued tough market conditions it has been a year of significant strategic progress for the Topps Group. In Retail, the recent launch of our new, industry-leading website brings new levels of inspiration to our customers and further integrates our digital and in-store offer. In Commercial, our investments in building the salesforce, opening new design studios and improving its digital capabilities have enabled Parkside to establish significant momentum in its second year within the Group.

"Our sales growth across the Group for the year as a whole compares favourably with the overall tile market. However, political uncertainty continued to weigh on consumer confidence in the final quarter and we expect this to remain a feature until there is greater clarity. Longer term, we are confident that our growth strategy will continue to deliver market outperformance."

In addition, the Group has recently received a one-off cash repayment from HMRC relating to historic import duty. The Group expects to recognise GBP2.3 million in respect of this payment as an adjusting item in its results for the year ending 28 September 2019.

- Ends -

Enquiries:

 
 Topps Tiles Plc                              0116 282 8000 
 Matthew Williams, Chief Executive Officer 
 Rob Parker, Chief Financial Officer 
 
 Citigate Dewe Rogerson                       020 7638 9571 
 Kevin Smith / Nick Hayns 
 

Note to editors

Topps Tiles Plc is the UK's largest specialist supplier of tiles and associated products, targeting the UK domestic refurbishment and commercial market and serving a retail and trade customer base from 362 nationwide retail stores and four commercial showrooms.

Since opening its first store in 1963, Topps has maintained a simple operating philosophy - inspiring customers with unrivalled product choice and providing exceptional levels of customer service.

For further information, please visit www.toppstiles.co.uk/media-centre/investors.asp

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October 02, 2019 02:00 ET (06:00 GMT)