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RNS Number : 4860A
Topps Tiles PLC
30 September 2020
30 September 2020
Topps Tiles Plc
Trading Update
Strong finish to the year, modest pre-tax profits expected
Trading
Topps Tiles Plc (the "Group"), the UK's leading tile specialist,
announces a trading update for the 52 week period ended 26
September 2020.
Retail trading over the fourth quarter remained strongly
positive and reflected both a robust home improvement market and
the strength of the Topps business model. Retail like-for-like
sales grew by 16.5% in the 13 weeks to 26 September 2020.
The strong finish to the year, with the Retail like-for-like
sales performance being robustly ahead of the comparative period,
gives the Board confidence that the Group will generate a modest
level of adjusted profit before tax(1) for the 52 weeks ended 26
September 2020.
Average Weekly Sales*
Apr May Jun Jul Aug Sep
FY 2020 GBP0.8m GBP1.3m GBP3.3m GBP4.4m GBP4.5m GBP4.6m
-------- -------- -------- ------- ------- --------
FY 2019 GBP4.0m GBP4.2m GBP4.1m GBP3.9m GBP3.9m GBP4.1m
-------- -------- -------- ------- ------- --------
YoY% (80)% (69)% (20)% +12% +14% +14%
-------- -------- -------- ------- ------- --------
* Average weekly sales for Topps Tiles retail business (stores
and online business)
Revenues for the 52 week period are expected to be in the region
of GBP192 million (2019: GBP219 million). Retail like-for-like
revenues in the 52 weeks were down by 12.5% when compared to the
prior year (2019: +0.6%).
Retail
The Retail business performed robustly across the final quarter
, driven by continued strong demand from DIY customers and an
accelerating recovery in trade activity which increased steadily
across the period. All of our stores are open and operating with
social distancing and hygiene protocols in place and the Group
ceased to utilise the UK Government's job retention scheme in
August. Our website continues to play an important role, with sales
remaining above the prior year level throughout the final quarter
and customers doing more of their research online before visiting a
store. Customers are also returning to pre Covid-19 behaviours with
a visit to store being at the heart of the majority of customer
journeys.
Our order bay(2) at period end was significantly ahead of the
prior year level, providing a positive outlook as we start the new
financial year.
Commercial
Activity across the Commercial sector has been rebuilding more
slowly following the period of Covid-19 related disruption but we
are starting to see increased levels of engagement by architects,
designers and contractors on new specification projects, and some
existing clients are now re-commencing fit-out activity. Despite
this significant slowdown in activity we anticipate full year
revenue of GBP7.5 million, which is 53% above the prior year
level*, and a small reduction in the full year trading loss
compared to the prior year.
Over the course of the fourth quarter we have completed the
systems and operational integration of Strata into our Parkside
operation, with both brands being retained from a customer
perspective but all back office and support activities now
operating under a central team based at our Leicestershire
headquarters. This initiative will make the business more efficient
and remove some costs as we move forward, supporting a further
reduction in trading losses in the new financial year.
* Prior year sales only include six months of revenue for Strata
Tiles Ltd following the purchase in April 2019
Liquidity
The Group's liquidity position remains very strong following the
disposal of the freehold on our head office and warehouse
facilities in Enderby for GBP18.1 million in June and the period of
strong retail trading over the fourth quarter. At period end the
Group had c.GBP25 million of net cash and available cash headroom
of c.GBP74 million within its financing facilities. This includes
around c.GBP7 million relating to year end working capital timing
and c.GBP6 million relating to VAT deferrals, both of which will
represent cash outflows in the new financial year.
Appointment of CFO
As announced on 4 September 2020, Stephen Hopson joins the Board
as Chief Financial Officer on 2 November 2020. An experienced
finance professional, Stephen has a strong track record across both
consumer and trade facing markets, having held senior finance roles
at Molson Coors, BSS, Travis Perkins and Mitchells &
Butlers.
Rob Parker, Chief Executive, said: "Our people remain at the
heart of our business and I would like to thank all of our
colleagues for their unwavering support through the last six
months.
"Our Retail business has performed strongly over the final
quarter and our order bay provides an encouraging view of the early
weeks of the new financial year. While the commercial market is
rebuilding more slowly, impacting on the recovery trajectory of our
Commercial business, it remains a key part of our longer term
growth strategy.
"I remain very positive about the longer term outlook for the
Group but also recognise that the continuing impact of the Covid-19
pandemic may lead to more difficult trading conditions over the
short to medium term. As market leader, and with our strong balance
sheet, the business is well positioned to navigate these conditions
and to meet future challenges."
1 Adjusted profit before tax excludes items which are one off in
nature or can fluctuate significantly from year to year (such as
some property related items - including IFRS16 adjustments)
2 Orders received from customers which are in process but not
yet fulfilled
- Ends -
Enquiries:
Topps Tiles Plc 0116 282 8000
Rob Parker, Chief Executive Officer
Citigate Dewe Rogerson
Kevin Smith 020 3926 8509
Nick Hayns 020 3926 8503
Note 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 342 nationwide retail stores and four commercial
showrooms.
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, please visit
http://www.toppstilesplc.com/
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END
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