Revenues fell 4.1% vs the previous period, and 1.9% vs 2016, sending shares down 7%
Companies: Topps Tiles Plc
Sales at Topps Tiles, the UK's largest tiling retailer, fell -4.1% during the second quarter as market conditions toughened and the housing market slowed. The figures were reported in a trading update that sent shares tumbling more than 6% on Tuesday.
The Group said that total revenues for the half fell 1.3% to £106m, with like-for-like sales down 1.9% versus the same period last year, adding that lower sales growth will be offset in the following half-year by a reduction in Opex.
Trading reflected softer market conditions and a less active housing market, but it is also important to recognise that the figures for Q117 were reported against a much stronger period in 2016 when transactions accelerated ahead of the stamp duty rise.
Despite the fall, the Board stressed that expectations for full-year profits are still within the current range of analyst forecasts. According to Digital Look, this should be around £22m, 10% higher than last year. Consensus forecasts are also expecting a dividend of 3.75p which would yield a not too shabby 3.9%.
Stockbroker Liberum said that it was a tougher market, better that Topps Tiles was better placed than its competition to deal with it. Analyst Tom Gadsby added that cost control and opportunities to reduce variable elements had left management comfortable with the current full year consensus range.
CEO Matt Williams said market conditions over the quarter had been tougher, but that the business had sought to respond by tightening 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."
