5 July 2023
Topps Tiles Plc
Q3 Trading Update
Topps Tiles Plc ("Topps Group", or the "Group"), the UK's leading tile specialist, announces a trading update for the 39-week period ended 1 July 2023.
Group
Group sales remained strong in the third quarter, with total sales growth of 4.4% against last year. The comparative period in Q3 2022 included a full contribution from Pro Tiler Tools following its acquisition in March 2022. For the year-to-date 39-week period, total sales growth was 7.6% year on year.
Omnichannel - Topps Tiles
The robust sales performance from Topps Tiles continued into the third quarter. Like-for-like sales1 were 2.5% higher year on year in the quarter, and 3.7% higher on a year-to-date basis.
As expected, gross margins in Topps Tiles continued to improve sequentially quarter on quarter, as inflationary pressures on cost of goods and shipping costs reduce. Operating costs and profits remain in line with our expectations.
Customer satisfaction remains at world class levels and recruitment and supply chain pressures continue to reduce over time.
Online Pure Play - Pro Tiler Tools and Tile Warehouse
The sales performance within the Online Pure Play brands remains excellent, with sales growth in excess of 60% in the third quarter, led by Pro Tiler Tools.
Commercial - Parkside
As announced in the Interim Results, following a period of weaker trading, a business improvement plan was launched in Parkside in the period. A significant cost reduction plan is now complete, resulting in an annualised reduction in operating expenses of £1.4 million. The cost of implementation was approximately £0.4 million, which will be treated as an adjusting item at year end. As a result of this change, we believe Parkside is now right sized for current market conditions.
The Group remains well positioned for future growth in the important B2B market, which is almost as large as the domestic RMI market, through Parkside, Pro Tiler Tools and the dedicated contracts team in Topps Tiles.
Summary
Trading in the third quarter saw a continuation of the good performance reported for the first half. We remain confident that adjusted profit before tax in the second half will be materially higher than the first half, and that we will perform in line with market expectations2 for the year as a whole.
The Group's growth strategy, strong brands and world class customer service, underpinned by our strong balance sheet, give us confidence that we will continue to take market share and deliver our goal of '1 in 5 by 2025'3 ahead of schedule.
Rob Parker, CEO, said: "As we celebrate our 60th anniversary, we are pleased to be reporting a continued robust performance in the third quarter, led by Topps Tiles and Pro Tiler Tools, and the successful implementation of a business improvement plan at Parkside.
"Looking ahead, we are confident that our core strengths of leading brands, world class customer service, specialist expertise and a strong balance sheet will enable us to continue to deliver value for all stakeholders."
1 Topps Tiles like-for-like sales is defined as online sales and sales from Topps Tiles stores that have been trading for more than 52 weeks.
2 Current market expectations for FY23 as of 4 July 2023 are a range of £11.3 million to £12.3 million of adjusted profit before tax, with a consensus of £11.8 million.
3 Refers to Topps' goal of accounting for £1 in every £5 spent on tiles and associated products in the UK by 2025, thereby increasing its market share to 20% from approximately 17% in 2019. In the 52 weeks ended 1 October 2022 the Group's market share increased to 19.0% (2021: 17.6%).
For further information please contact:
Topps Tiles Plc | |
Rob Parker, CEO Stephen Hopson, CFO | 0116 282 8000 |
Citigate Dewe Rogerson | |
Kevin Smith Ellen Wilton | 020 7638 9571 |
Notes to Editors
Topps Tiles Plc is the UK's largest specialist supplier of tiles and associated products, targeting the UK domestic refurbishment and commercial markets and serving homeowners, trade customers, architects, designers and contractors from 304 nationwide Topps Tiles stores, a commercial showroom in London and seven websites: www.toppstiles.co.uk, www.parkside.co.uk, www.protilertools.co.uk, www.northantstools.co.uk, www.premiumtiletrim.co.uk, www.warmfloorstore.co.uk and www.tilewarehouse.co.uk.
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 on the Group, please visit http://www.toppstilesplc.com/
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