Topps cautious despite recent sales revival

TOPPS Tiles, the retailer, has posted a dip in half-year profits and warned that it expects trading to remain challenging.

The group, which has its head office in Handforth, and had nearly 320 shops nationwide – the majority (299) being in the Topps fascia and the remainder Tile Clearing House stores – said profits in the 26 weeks to March 31 fell from £7.2m to £5.6m.

Like for like revenues decreased by 4.7%, in line with expectations and, in part, reflecting tougher comparatives in H1 2011.

Topps said it had noticed a recent pick-up in demand with like-for-like sales in the seven weeks to 19th May up 4.5%.

While this is “encouraging” chief executive Matthew Williams said it is too early to say if this is part of a broader trend.

During the period there was further development of the store estate, with five new Topps Tiles stores opened and seven Tile Clearing House stores converted to the more profitable Topps format.

Net debt was reduced by £4.7m from year end to £46.3m at 31st March, with £10m of undrawn banking facilities. The interim dividend was held at 0.5p per share. 

Mr Williams said: “In the environment of continuing low levels of consumer confidence and housing transactions, we have been, and continue to be, focused on optimising returns from the existing store estate whilst continuing to make the investments necessary to support longer term growth. 

“In the last seven weeks we have been encouraged by trading which has seen like for like sales increase by 4.5%, although it is too early to determine whether this marks the beginning of a broader trend. 

“We expect trading conditions for retailers in the discretionary spend sector to remain challenging during the second half.”