RNS announcement

13 August 2020

This announcement contains inside information for the purposes of Article 7 of EU Regulation 596/2014.

Topps Tiles Plc

Trading Update

Robust like-for-like growth; modest pre-tax profits now expected for FY20; well-positioned to strengthen market position

Trading

Topps Tiles Plc (the "Group"), the UK's leading tile specialist, announces a trading update for the six week period ended 8 August 2020.

Retail trading over the first six weeks of our final quarter has been robust, with like for like retail revenues growing by 15.5% year-on-year.   

Home improvement demand has been strong across the period, with DIY activity increasing sharply and Trade customer activity recovering steadily from April lows.  While online sales have moderated from the peaks seen in April and May they remain above previous levels, leveraging the Group's recent online investments.

Average Weekly Sales*

 * Average weekly sales for Topps Tiles retail business (stores and online business)

The business is now operating as normal with all stores open and the vast majority trading a full seven day week.  With our colleagues having now returned to work, the Group has ceased to make use of the UK Government's Job Protection Scheme. 

Our Retail performance over the last six weeks, combined with an order bay¹ which is significantly ahead of the prior year, means that the Board now expects that the Group will generate a modest level of adjusted profit before tax² for the 52 weeks ended 26 September 2020.

In our Commercial business sales remain subdued but activity levels are starting to improve.  Given the long lead times involved in the construction industry, we are not expecting a sudden increase in sales but we believe the Group can continue to take market share and we remain committed to our goal of building a market leading Commercial business over the medium term.

The combination of strong trading and receipt of the proceeds from the sale and lease back of the Group's head office and warehouse buildings at Enderby in June, have had a material impact on the Group's liquidity position. The Group currently has c.£9 million of net cash and available cash headroom of £58 million within its financing facilities. 

While recent trading has been extremely robust, uncertainty related to COVID-19 persists and it is unusually difficult to assess the outlook beyond the short term.  However, the performance of the business through the pandemic period has been significantly better than initial expectations and this, together with the strength of its management team and balance sheet, gives the Board confidence that the business remains well positioned and capable of strengthening its market leadership position as its markets recover.

Rob Parker, Chief Executive, said: "I am pleased with how well the business has navigated the crisis to date and feel that we are well positioned for whatever comes next.  Our colleagues have responded brilliantly over the last five months and I would like to once again place on record my thanks for their dedication and endeavour.  I am also very grateful to our loyal customers who have continued to support us during this period.

"Our response to the pandemic has strengthened the business and fundamentally improved our liquidity position, providing further flexibility and putting us in a strong position both to benefit from the recovery in our markets and to meet any future challenges."

1 Orders received from customers which are in process but not yet fulfilled

2 Adjusted profit before tax excludes items which are one off in nature or can fluctuate significantly from year to year (such as some property related items - including IFRS16 adjustments)

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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 351 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 http://www.toppstilesplc.com/