Despite Management's "prudent" view of the market, sales in the lead-up to Christmas were up 3.4%.
Companies: Topps Tiles Plc
Topps Tiles (LON: TPT) has issued a Trading Update today for the final 13 weeks of 2017, the first Quarter of FY18, which has pleased investors amidst fragile market conditions.
The UK's largest tile retailer reported LFL Revenue growth of 3.4%, up from the flat 0.3% growth in the same period in 2016.
It also closed net one store in the final quarter of last year.
Whilst the Group has a stronghold on the retail tile market, Management has had a "prudent" view of the market for a while and has new division targeting the commercial tile market which is "progressing":
"Building on the acquisition of Parkside Ceramics in September 2017, we are investing in the capabilities necessary for future growth. The Parkside commercial offer was launched at the 100% Design trade show in October and our first commercial showroom opened in Chelsea in December."
Matthew Williams, Chief Executive Officer, commented on its commercial market expansion and outlook...
"Our expansion into the commercial market is also progressing to plan, with the first investments made in the Parkside business adding new capabilities and resource. While we are pleased with the like-for-like sales growth achieved in Q1, we are retaining our prudent view of market conditions for the year ahead."
The small jump in sales is welcome news for the Group after brokers downgraded their forecasts by 10% in October off the back of a Profit Warning for FY17.
Shares in TPT were up over 8% to 86p at the time of writing.
Paul Scott from Stockopedia gave an insightful take on the Group in his Small Cap Report today:
"My opinion - as mentioned in my last report here on 4 Oct 2017, I'm warming towards this company. Consumer spending seems to be pretty solid, based on surprisingly good reports so far from retailers. Hence why I think this could possibly be quite a good entry point for modestly valued retailers which are reporting positive trading now.
There's an attractive dividend yield with this share too, still over 4%, even after today's rise. I don't expect this share to shoot the lights out, but it looks to me as if it's possibly set up for a better performance in 2018 than in 2017. Overall then, I'm moderately positive about this share, hence why it's now in my personal portfolio."
