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RNS Number : 5899O
Topps Tiles PLC
04 October 2023
4 October 2023
Topps Tiles Plc
Q4 Trading Update
Third consecutive year of record sales; FY23 profits in line
with market expectations
Topps Tiles Plc ("Topps Group", or the "Group"), the UK's
leading tile specialist, announces a trading update for the 52-week
period ended 30 September 2023.
Group
Group sales in the year were approximately GBP263 million (1) .
FY23 was the third consecutive year of record turnover for the
Group, with sales now more than GBP40 million higher than FY19, the
last financial year before the Covid pandemic. Year on year, sales
increased by 6.4% (1) , which we believe represents a significant
outperformance relative to the UK tiling market. The Group will
update its market share estimate in its full year results
announcement for FY23 once third-party market data is available,
but expects to report a strong increase from the 19% reported last
year as it moves rapidly towards the early delivery of its goal of
'1 in 5 by 2025' (2) .
Group sales grew by 3.2% in the 13 weeks to 30 September 2023.
The comparative period in Q4 2022 contained a full contribution
from Pro Tiler Tools following its acquisition in March 2022.
Omnichannel - Topps Tiles
Like-for-like sales (3) were 3.1% higher in the 52-week period
and 1.2% higher year on year in the final quarter. Average sales
per store were 30% higher than FY19, as a result of significant
underlying sales growth and our successful store rationalisation
programme, which has now concluded. As expected, gross margins have
increased sequentially through each quarter of the financial year
as shipping and product cost inflation moderated.
The world-class customer service delivered by Topps Tiles was
recognised again by our customers in the year, with overall
customer satisfaction up another 1.6 percentage points to
91.5%.
Online Pure Play - Pro Tiler Tools and Tile Warehouse
Overall, Online Pure Play continues to deliver excellent sales
growth, up over 40% in the final quarter of the year, led by the
Pro Tiler Tools business which was acquired in March 2022. Sales
growth over the whole year, including relevant comparatives from
the pre-acquisition period, was approximately 50%, representing an
excellent first full year for the business as part of Topps
Group.
Commercial - Parkside
As reported in the Q3 trading update, a business improvement
plan for Parkside was launched and swiftly concluded in the second
half of the year, resulting in an operating cost reduction of c.
35%. As a result, the business moved back into profitability in the
fourth quarter. With the business now stabilised, the focus will
shift back to consistent profitable growth in the next financial
year.
Through Parkside, Pro Tiler Tools and a dedicated contractor
team within Topps Tiles, the Group is well positioned to serve the
contractor and commercial markets moving forward.
Summary
As expected, sales growth moderated in the final quarter,
reflecting the impact on residential RMI spend of the prolonged
period of inflation, higher interest rates and the slowing housing
market. However, against this market backdrop, we expect to have
made strong market share gains, driven by our specialist expertise,
broad product offering and world class customer service.
Profitability improved in H2 as expected and adjusted profit
before tax for the 52 weeks ended 30 September 2023 is expected to
be in line with market expectations (4) . Our cash flow and balance
sheet are also in line with our expectations.
Rob Parker, CEO, said: "As we celebrate our 60(th) anniversary,
we are delighted to have delivered a third consecutive year of
record sales in Topps Group, having increased our sales by over
GBP40 million since the pre-pandemic period, reflecting the
significant development and diversification of the Group over that
time.
"It was also a year of strong strategic progress, in which Topps
Tiles continued to take significant market share, Parkside was
set-up for profitable growth and Pro Tiler's performance went from
strength to strength. As a result of this progress, we anticipate
delivering our goal of '1 in 5 by 2025' significantly ahead of
schedule.
"Despite a slowing RMI market, 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
grow sales, profitability and cash generation in the years ahead,
delivering value for all stakeholders."
(1) Group sales for FY23 are stated before year end accounting
adjustments including revenue recognition, loyalty scheme
accounting and customer returns provisions. The FY22 period
includes sales from Pro Tiler Tools in the period following
acquisition only as per the Group's consolidated accounts.
(2) Refers to Topps Group's 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. In the 52 weeks ended 1 October 2022, the Group's market
share increased to 19.0% (2021: 17.6%).
(3) 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.
(4) Current market expectations for FY23 as of 3 October 2023
are a range of GBP11.3 million to GBP12.3 million of adjusted
profit before tax, with a consensus of GBP11.8 million.
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 and commercial
markets and serving homeowners, trade customers, architects,
designers and contractors from 303 nationwide Topps Tiles stores, a
commercial showroom in London and eight customer-facing 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 www.flooringmaterials.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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END
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