TIDMTPT
RNS Number : 1073O
Topps Tiles PLC
06 October 2021
6 October 2021
Topps Tiles Plc
Q4 Trading Update
Record year for sales; full year profits slightly ahead of
forecasts
Topps Tiles Plc ("Topps" or the "Group"), the UK's leading tile
specialist, announces a trading update for the 53-week period ended
2 October 2021.
Group revenues in the 53-week period(1) were approximately
GBP227.5 million, or GBP222.5 million on a comparable 52-week basis
(FY20: GBP192.8 million), a record year of turnover for the Group.
Supported by a buoyant home improvement market in the UK, this
record performance is even more notable given that one quarter of
the year included significant trading restrictions and a national
lockdown. We believe it demonstrates the success of our growth
strategy and is a good step towards the achievement of our market
share goal of '1 in 5 by 2025'(2) .
Our omni-channel Retail business has continued to perform well
over the final quarter of the year. On a two-year basis, Retail
like-for-like sales were up 21.7% in quarter four, which is an
acceleration from the 18.5% growth reported in the Q3 Trading
Update (for the period after the lifting of trading restrictions).
On a one-year basis, Retail like-for-like sales were up 3.0% in the
final quarter, against a comparative period last year which saw a
strong bounce back in sales following the initial national
lockdown.
Q1 Q2 H1 Q3 Q4 H2 FY
Two-year Retail
like-for-like
sales +13.0% -23.1% -4.5% +12.9% +21.7% +17.4% +6.3%
------- ------- ------ -------- ------- ------- -------
One-year Retail
like-for-like
sales +19.9% -17.3% +2.0% +131.0% +3.0% +39.8% +19.6%
------- ------- ------ -------- ------- ------- -------
We believe that our excellent omni-channel retail offer,
award-winning website, strengthened value position, world class
customer service and good stock availability have all contributed
to this result.
As highlighted in the Q3 Trading Update, our percentage gross
margins are lower than last year due to higher shipping costs,
product mix changes and our continued investment into value,
however gross profits were strong, and costs were well controlled.
We have invested in higher levels of inventory over the current
period, which we believe is a significant competitive advantage in
a market which is facing well-documented supply chain
challenges.
In the Commercial business, sales have continued to grow as key
market sectors re-open, and, in the year as a whole, sales(1) were
approximately 15% higher than last year at c. GBP8.6 million (FY20:
GBP7.5 million), a result we believe is ahead of the market.
As a result, adjusted profit before tax(3) is now expected to be
slightly above consensus forecasts(4) for the financial year.
Our balance sheet has remained strong and the business is
debt-free, with adjusted net cash of c. GBP28 million at the year
end, slightly higher than last year (FY20: GBP26.0 million),
despite an GBP11 million outflow of working capital due to the
timing of the 53(rd) week and the repayment of deferred VAT
relating to the period April - June 2020.
The Group remains confident in its strategy and outlook but is
continuing to monitor the impact of rising levels of input cost
inflation and supply chain disruption closely, with mitigation or
pass through of the associated cost pressures remaining a key focus
for the business as it begins the new financial year.
As previously disclosed, the Board expects to reinstate dividend
payments at the end of the year, with a final dividend payment
relating to the whole financial year, rather than just the second
half.
Rob Parker, CEO, said: "The Group has delivered an excellent
final quarter and we have achieved a record level of annual
revenue, despite operating with trading restrictions for
significant parts of the year. These results are testament to the
hard work and commitment of our colleagues, and I thank them again
for their unwavering dedication and support.
"Like-for-like sales were strongly ahead of 2019 in the final
quarter but were also above the same period in 2020, when our sales
bounced back strongly following the first national lockdown. This
performance reflects a robust level of consumer demand but also
underlines the strength of our growth strategy and the success of
initiatives such as our improved value range and investment in our
award-winning digital offer. We remain confident on the outlook,
against a backdrop of strong demand for DIY products and continued
investment into home improvements."
The Group will announce its results for the 53 weeks ended 2
October 2021 on 30 November 2021.
(1) Before year end accounting adjustments including revenue
recognition and customer returns provisions.
(2) Refers to Topps' goal of accounting for GBP1 in every GBP5
spent on tiles and associated products in the UK by 2025, thereby
increasing its market share to 20% from approximately 17% in 2019 -
see the FY20 year end results for more information.
(3) Adjusted profit before tax excludes items which are one-off
in nature or can fluctuate significantly from year to year.
(4) Market expectations for adjusted profit before tax for the
53 week period ended 2 October 2021 are in the range GBP13.2
million to GBP14.0 million, with a consensus of GBP13.6 million.
These forecasts exclude the benefit of any Covid-related government
support in the second half.
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 market and serving a retail and trade customer base
from 313 nationwide Retail stores, 7 Commercial showrooms and three
trading websites: www.toppstiles.co.uk , www.parkside.co.uk and
www.stratatiles.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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END
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