Topps hit by slump in profits

Topps Tiles, which operates 320 stores and has a 26 per cent share of the market, saw underlying profits fall to £5.6m in the 26 weeks to the end of March, driven by a 4.7 per cent drop in like-for-like sales.

Sales at the start of the second half of its year were up by 4.5 per cent after April’s dismal weather put the focus back on home improvement projects.

However, the Leicester-based group, which also trades as Tile Clearing House, warned that trading conditions remain challenging and it was too early to say whether this marked the start of an improving trend.

Seymour Pierce stockbrokers said the profits figure was short of the £6.8m it expected but that recent trading meant it stuck by its full-year forecast for a profit haul of £13m.

Analyst Freddie George said: “We remain concerned the DIY sheds, in particular B&Q, which has launched a new tile range, and other retailers, which are improving their ‘Home’ offers, will start to impact Topps’ revenues.”

He added the completion of the firm’s second warehouse at its Leicestershire headquarters should enable a longer term shift to direct sourcing and improved margins.

Topps hopes the new facility will enable it to fulfil its ambition of expanding to 400 stores in the UK. It opened five new Topps stores and converted seven Tile Clearing Houses into the more profitable Topps format during the period.