Topps Tiles Plc has announced a trading update for the eight weeks ended 22 February 2020.
In early January 2020 Topps Tiles Plc reported that its trading performance in the first quarter of its current financial year, which ended on 28 December 2019, had been impacted significantly by political and economic uncertainty in the run up to the UK General Election, with Retail like-for-like sales in the period falling by 5.4%.
Trading in the first eight weeks of the second quarter has remained challenging against a backdrop of continued weak home improvement spending. Retail like-for-like sales in the eight weeks to 22 February 2020 decreased by 5.5%.
With most of the period complete, the Group now expects that first half profit will be significantly below the prior year level. As a result, management expect adjusted profit before tax for the 53 weeks ended 3 October 2020 will be materially below the bottom end of the current range of market expectations1.
The Group remains cash generative and, in light of current trading conditions, has further strengthened its focus on costs and cash management.
Rob Parker, CEO, said: “Trading conditions in our second quarter have remained challenging, reflecting continued weakness in home improvement spending. Against this backdrop we are taking appropriate action to ensure we remain competitive, to reduce costs and to strengthen cash flows.
“While UK housing market indicators have shown an encouraging improvement in the period since the General Election, these traditionally have a lagged impact on our trading and we would not expect to see any benefit from these until later into the second half – our performance during this period will be key to the outcome for the year as a whole.
“We remain confident that our market-leading retail offer and recently established commercial operations give us a strong platform from which to deliver sustainable growth over the medium and long term.”
The Group’s next update will be the announcement of its results for the 26 weeks ended 28 March 2020 on 19 May 2020.
1 The current range of market expectations for adjusted profit before tax for the 53 weeks ended 3 October 2020 is £13.5m to £14.5m
Source: Insight DIY Team & Topps Tiles