TIDMTPT

RNS Number : 4209B

Topps Tiles PLC

04 April 2017

4 April 2017

Topps Tiles Plc

H1 Trading Update

Trading

Topps Tiles Plc (the "Group"), the UK's largest tile specialist, announces a trading update for the 26 week period ending 1 April 2017. The Board will announce interim results for the period on 23 May 2017.

Total revenues for the 26 week period were GBP106.5 million (2016: GBP108.0 million).

Like-for-like revenues for the 26 week period decreased by 1.9%.

Trading in the second quarter reflected softer market conditions and the Group is also reporting against a stronger period from the prior year when housing transactions accelerated ahead of the Stamp Duty changes in April 2016.

Lower sales growth over the first half will primarily be offset by reduced operating expenditure. Based on an improving trend across the second quarter and a prudent view of the second half, management expectations for full year profits are within the current range of analyst forecasts.

Analysis of LFL sales by quarter

 
               Q1         Q2       First Half 
---------  ---------  ----------  ----------- 
 FY 2017    +0.3%(1)   -4.1% (2)   -1.9% (3) 
---------  ---------  ----------  ----------- 
 FY 2016     +4.4%       +4.9%       +4.7% 
---------  ---------  ----------  ----------- 
 

(1) Quarter 1 in 2017 includes one additional trading day due to the timing of public holidays which we estimate will have increased LFL sales growth in the quarter by c.0.6%. This effect reversed during the second quarter.

(2) Quarter 2 includes the loss of a trading day explained in (1) above and also the effect of a later Easter which generates one additional trading day. These two adjustments broadly offset each other over the quarter.

(3) The net impact of (1) and (2) over the first half is one additional trading day which benefits LFL sales growth by c.0.3%.

Strategic Progress

We continue to invest in the business and make good progress with our strategy of "Out-Specialising the Specialists", with specific initiatives in the period including:

 
      --   Inspiration - the Rewards+ trade loyalty 
            programme continued to gain traction 
            and we now have over 35,000 traders actively 
            collecting points, an increase of 11,000 
            traders since the end of the first quarter. 
      --   Range - we have delivered good growth 
            over the period from our new XL tile 
            range and extensions to our wood effect 
            tile offer. These gains have helped to 
            offset the lost sales following the exit 
            from the low margin wood flooring category. 
            We estimate the net position is around 
            1% less sales and a small positive on 
            a gross profit basis. 
      --   Convenience - we opened 10 new stores 
            in the core estate over the first half 
            and closed three. The Group is currently 
            trading from 358 stores, including 15 
            Boutique stores (2016: 340 stores including 
            13 Boutique stores). We expect to open 
            circa 15 net new stores in the current 
            financial year. 
      --   People - during the first half we completed 
            the implementation of a new Learning 
            Management System and launched our new 
            employer brand campaign. These initiatives 
            will help to both increase our attractiveness 
            to new candidates and retain and develop 
            our existing colleagues over the longer 
            term. 
 

Matthew Williams, Chief Executive Officer, said: "Market conditions over the second quarter have been tougher, but the business has responded well with tight control of costs. While we are taking a prudent view on the outlook for the balance of 2017, an improving trend over the second quarter provides some encouragement. We will continue to invest in the business and focus on executing our strategy of Out Specialising the Specialists to extend our market leading position in the second half of the year."

(1) The current range of analyst expectations for underlying profit before tax for the year ended 30 September 2017 is GBP21.0m to GBP22.3m, with consensus at GBP21.8m.

- 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 tools and accessories, targeting the UK domestic refurbishment market and serving a retail and trade customer base from 358 stores nationwide.

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

This information is provided by RNS

The company news service from the London Stock Exchange

END

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