Topps Tiles profit deteriorates, cautious outlook

First half pre-tax profit declined at tile specialist Topps Tiles, reflecting weaker levels of consumer confidence, and said it remains cautious for the remainder of the current year.

Pre-tax profit fell to £4.7m for the 26 weeks ended March 30th 2013 from £5.0m the year before. Revenue increased to £87.4m, up 0.9% from last time.

Like-for-like (LFL) revenues slipped 0.2% during the year. LFL sales over the more recent eight weeks to May 25th fell 2.6% compared to a 3.2% gain in 2012.

Chief Executive Matthew Williams commented: "In response to the weaker market conditions we saw across the second quarter, we are implementing a programme of self-help initiatives and significant cost reduction measures and are pleased with the progress made to date."

It is targeting £2.0m of cost savings during the second half of the year.

"We are also mindful of the current trading environment which has deteriorated slightly over the last eight weeks. At this early point in the second half, assessing the likely impact on the full year outcome is difficult, but we continue to be cautious on the like for like sales outlook for the remainder of the current year."

Topps Tiles added that while recent indications of an improvement in the UK housing market give encouragement, it is too early to judge the sustainability of this trend. However the group said it remains well placed to respond to any sustained increase in housing market volumes.

Net debt reduced by £0.7m from year-end to £44.9m at March 30th, with £5.0m of undrawn bank facilities.

The dividend payment has been maintained at 0.50p per share.

Its shares fell 2.80% to 65.00p at 09:20 in London.

CJ