Topps Tiles Share Chat (TPT)

Just posting again to make sure everyone knows the message below by Leonarle is an obvious scam. Don't interact with it.

Honestly, a marginal decline of about a percent including store closures and this. Absolute boulderdash.

"Group revenue (excluding CTD) for Q3 FY26 was £69.4 million, up 0.6% vs last year. "

Revenues aren't in an existential decline that indicates that tiles will no longer have a market.

Specifically, this company's revenues aren't lagging the market performance. As the market leader in a mature market, this is basically as sure as night follows day.

Smaller competitors serving niches or a command my h less share have gone.

This company is still here. It still had the strongest brand value in the market.

You just seem like a depressing horoscope incarnate. Vague or stating the obvious.

OK, which part is wrong?

Are revenues down?

Has main competitor not vanished?

Try to understand the basics, and cut out the childish twaddle, it reflects badly.

Again, what are you talking about, honestly? I think you're manufacturing a sense of how I feel in your mind for your ego.

Hey, you do you, though.

.wealthoracle.co.uk/company-results

Topps reported H1 26 adjusted revenue up 11.6% to £142.6m, lapping the CTD acquisition; on a proforma basis revenue was flat at -0.2%. Adjusted PBT of £2.2m, down £1.0m headline but flat proforma versus CTD's £1.0m loss in H1 25. Proforma adjusted operating profit up 17.3% on a 1.6ppt proforma gross margin uplift and tight cost control. Trade mix grew to 74.6% with Pro Tiler revenue up around 20% to £18.4m. Online revenue rose to c.21% of sales. CTD losses more than halved year-on-year to £0.4m and on track for H2 profitability. Three self-help cost initiatives announced including closure of 23 loss-making Topps stores, targeting c.£3m H2 benefit and c.£6m annualised. Q3-to-date Topps LFL turned positive at +0.6% versus -2% in Q2. Interim dividend 1.0p maintained. Modest year-on-year profit growth in line with consensus expected. IN-LINE

.wealthoracle.co.uk/company-results

That's a bit impolite isn't it.

If it's OK with you, I'll comment as I see it.

And if it's not, I'll do exactly the same.

Begone, I didn't summon you!

So, you ask if I'm still around on one post, then act surprised now.

Of course I'm still taking an occasional look, and commenting on the travails of the sector, which are real, but you and Trotters act blissfully unaware of.

Hey ho

Price dropping below 35p seems to be the summoning event for certain posters ;)

I think that you'll find that it has more to do with other factors that aren't necesarily specific to either TPT or the state of the economy e.g. the current welfare system that doesn't make it worthwhile for some people to work more than 10 hours a week and/or working mothers who need to top and tail their working day because they can't afford childcare. TPT is just mixing and matching i.e. where they might like/want one person to work a 40 hour week they split the job into two part-time jobs of 10 hours and 30 hours respectively.

Still around, al?

*at the time I made my investment, not 2008.

Indeed, I apologise, let things get the better of me.

2008/2009 was the top of a housing bubble, so everything related probably got inflated. I analysed the reports going back to 2005 at the time.

My points are that I believe the market that Topps operates in will continue to exist. It will be served by a hybrid of physical and online retailers. Yes, cost inflation and weak consumer sentiment do have short-term effects on profits, but survivors consolidate and benefit medium-term. In the end, competition enters and they earn average profits margins.

Granted, prior to the Iran war, immediate profit was looking considerably rosier, but the gas inflation was much, much higher after the Ukrain war began. Topps endured, consolidated but suffered margin pressure.

We've seen those margin pressures eased considerably over the last year before the end of Feb, and that drove normalised margins on an upward trend.

Tbh, a lot of what I have invested is in global tracker funds for diversification and I have been fortunate enough to build a significant nest egg that I only need to earn average returns to end up very wealthy, but I don't mind holding Topps for a few years or longer because I don't see how else the tile market can be served, nor do I see sustainable competitive advantages elsewhere.

I've also bought a few companies directly hit by the volatility, but in market-leading positions, sentiment does count if you pay attention to it. Otherwise, it's other things, but in hindsight, yeah, wish I timed things perfectly and sold everything at 50p and bought today. Ironically, my holding is still up nominally when accounting for dividends.

I agree that immediate profit expectations have been dampened, but I emphasise the importance of looking at sustainable profits when buying a business.

No malice intended this time ;)

As it goes, your last comment qualifies as really malicious!

2009 was the year that interest on bank deposits went so low as to be worthless, there was therefore a rush of folks joining sites like this to be informed about share owning/trading. They were exciting times, highly volatile, with 20% gains, or losses, happening daily. Served some really well, whilst others lost their shirts. TPT lost a massive part of its mcap in that era, many folks thought it wouldn't survive. A lesson perhaps that sentiment has a strong role to play. Depends what size of a crisis the current one is, but it will have a negative influence on the willingness of consumers to spend on non essentials. That's just a plain fact, not just the view of bitter old me. Or maybe the word realistic would be a better fit.

Ah, been here since 2009, nearing the end likely, I guess. Makes everyone a bit bitter.

Return of the 1-2 share trades again... When will the authorities take note of the concerns I raised, probably never?

Should be a chug-along update Wednesday. Jan and Feb should be okay-to-strong with some impact in March.

Strong market participant so will benefit from distress to others if current affairs carry on (I doubt they will) but Mr Market will do his thing in the interim, I guess. One of many investments that will look like no-brainers in hindsight, but you won't hear that at the moment.

YOY

RMI relating to people's houses was up in January mom. Up over 7% you.

Not so sure about that. Last year was a very good performance for all businesses while competitors struggled. They continued to grow even at the end of the year when things got frosty.

January GDP figures show encouraging signs for Topps main subsector in construction.

Not sure about that , but you can bet that most factories hedged aggressively, if they haven't already on the dip. I don't think it will be sustained, but let's see.

Freight isn't that high at all ATM, nothing like the commodity volatility for good reasons. Not sure freight costs are going to be a long-term problem at all.

Interest rates are unlikely to rise significantly, if at all, this isn't the post code boom. The global economy was slowing anyway, especially China.

There's credible reports that Iran is still letting out over 1mln barrels a day through shadow fleet ships.

Doesn't seem possible to argue with Trotters, off he goes, inventing commercial producers in Morocco. Really no grasp of what a modern factory looks like.

Shippers have notified surcharges on containers, increased fuel and insurance costs. Interest rates will rise, not fall, because inflation will be on an upward trend. Judging by the media reports, Iran won't be selling oil to anyone for years now, infrastructure in a junkyard.

TT, no exact breakdown is given, but they do give you some disclosure through the FX holdings. Turkey is mentioned on NA. India and other non-western countries will temporarily import gas from sanctioned sources, not what I want to see from a personal pov, but that will happen.

It's a flexible supply-chain, which was enhanced due to the previous energy price increase and will help to mitigate any impact, but I doubt producers even pass on short-term spikes, as that would just kill your customers' faith. A longer-term average will be partially passed on, but a rebalancing away from those suppliers will help, and the precedent is that Topps passed on every pound of goods inflation in the Russia spike, which was much, much worse than this one has been.

There's effects, but you can calculate the effects, and they are very likely to be marginal if cooler heads prevail and phased into next year.

I believe this won't be material because it can be offset and not as big as the panic assumed. Fwiw, energy costs for stores etc H2 will probably be less than 1m, even at higher cost.

Also, note the tailwinds of rate reductions, reduced cash outflows relating to the CMA, reduced outflows relating to businesses moving into profitability and Fired Earth selling high-value products. I also think having 100k of economically strong people potentially coming back to the UK and looking for somewhere to live feeds into a favourable effect on RMI.

I bet you there are plenty of companies that are on sale ATM. Topps is one of them.

Allfista, Thanks for that insightful response; not. It's my recollection, and I may well be incorrect, that Topps sourced a lot of tiles from North Africa, Morrocco in parrticular (or certainly did at one time). North African countries are not reliant on supplies from Iran! Obviously, tiles sourced from Europe and, say, the Indian sub-continent, as an example, will have been affected.

Gas is not easy to transport in bulk; you need pipelines and not all pipelines give you automatic access to external markets (either by cross-border pipelines, such as Nordstream 1, or via coastal LNG production plants). In the absence of the necessary infrastructure needed to export your gas, the dynamics of the local market becomes totally different. People often wrongly assume that the US, for example, has uniform gas pricing; it doesn't. Pricing on the West, South and East coasts is totally different to the pricing in Central USA because they lack the interconnectors needed to ship gas produced in much of Central USA to external markets.

Bottom line, how badly, or not, Topps is affected depends on where it sources its tiles and whether those producers are subject to international or local gas pricing. The main tenet of my "waffle" was that it would be wrong to simply assume that all countries and producers are likewise affected.

Also, this is a bit out-there, but there 100,000s of UK citizens that are coming back to the UK, likely good-earners. That seems to have the potential to boost the economy.

Good growth coming into the first 9 weeks considering the environment. Another consolidation and a good net cash position with CTD going from a drag to a positive for next year. Well done, Rob and team.

Hopefully there's a sustained dip for more accumulation.

Yeah, it's ironic because this is a 2-3 bagger hiding in plain sight. That's markets for you.

Agree totally......if MS Galleon had any sense (and the cash) they should bid for it before the operational gearing inherent starts to pull thro' at some point next year

FTM, perhaps, but I noted accumulation far before the dividend was mentioned if you look back.

Agreed on that. Things look very promising for Topps. Here's to good times ahead hopefully!

What is really impressive is the execution across all of its businesses. Growth was everywhere this year. I am disappointed to have lost the CEO and CFO, but they've laid a great foundation.

Ex-dividend not till 19 December, so I doubt its accumul for dividend. Mebbe just mebbe people are actually starting to look at the fundamentals and realise that this company is in way better shape than its been in years!

1.7m traded....and sp barely budges. Does anyone have any clue ?

Here we go again....1.25m shares traded and it looks like 2 chunky sales of c£83.500 aggregate one late pm and after late reported

Which retailers are you talking about? CTD was not included in l4l, and is break-even in q4 and was actually a small cash burn for the year.

Anyway, survivors who consolidate are called winners. In what way? I ran an online business and there's obvious technical differences in accounting for expenses by nature. Online is a higher bottom-line margin at the moment than the core business.

Also, their budget online retailer was the fastest growing in the sector, allbeit from a low base.

People will keep buying tiles.

Think you are failing to appreciate that they took some market from the demise, or near demise, of their two main national retailers. The whole market has fallen, and they face a monopoly difficulty if the creaking gate competitor vanishes.

The online fire only burns margins.

Private RMI is holding up well. Feel like the inflection point has already been reached, and the bottom of the cycle has already happened. The l4ls were excellent for this year and across everything. Also, online is on fire.

I'm not sure how you can be negative here. But be greedy when others are fearful etc

If you believe that, I've got a bridge to sell you.

Market for retail non essentials will be tough post Budget, If the Guv pick pockets, there's less for consumers to spend. Interst rates will not go down, could well go up.

Not good

The volume and value is super-high for the day. Bravo to the people who dragged this down for a cheap buy.

Just look at the number of trades compared to a usual day. The 1 and 2 shares were probes yesterday for the drag down. Expect some sizeable volume and then nothing after accumulation has completed. Could be a nice adding opportunity.

Lol, so obviously being purposely pushed down for clients to accumulate. Can't complain as trimmed at high and picked up at low.

Clearly being probed by market makers imo after the recent update

I think I'm going to report this. It's so obviously being played with.

All those 1 share trades and then other stuff. If anyone has other shares that they've seen this on, let me know and I'll put it in the report to the FCA. Got a response last time.

You work hard all day trying to climb the mountain and the very next day they chop your legs off ;-)

Regardless of how illiquid this share may be, it doesn't help when the MMs cut the bid-offer prices from the get-go. Ho-hum!

The NIC changes kicked in at the start of H2 , are expected to increase H2 costs by c£2m and are over and above earlier inflationary changes. QED c£4m per annum going forward. In the longer terms some of those additional costs will be offset by general price increases, its the way of the world, but some of those additional costs will inevitably stick and will have to be offet by increases in future sales volumes.

Bit of a mixed bag. The core business showed some improvement (which appears to have continued into H2) but its clearly facing some headwinds e.g. the NIC changes might be expected to increase annual costs by c£4m (offsetting most of the cost efficiencies that TPT is trying to implement). ProTiler continues to trade strongly. The CMA investigation into the acquisition of CTD may not have identified any major concerns but the integration of the acquired business has been stalled for six months whilst the investigation was ongoing (you've got to question the merits of the investigation and the time it took to complete) and some housebuilder and A&D customers have been lost that TPT would, no doubt, have liked to have retained. TPT has also incurred some additional one off costs because of the delay. It'll probably take TPT six months to steady the ship and probably at least 12 months for CTD to start gaining new traction.

One appreciates that the CMA has a job to do but the remnants of CTD were on the verge of collapse and the delay could have proven terminal; the interim manager installed whilst CTD conducted their investigation had no concern in growing/improving the business and has hampered the turnaround process. The CMA's remit is now too wide (it now has to consider local/regional competition issues, not just national) and it's a hamfisted process.

Perhaps normal but what drove the rise today? no news I can see..

It's all to do with accounting conventions. Distribution, selling, marketing, website and similar costs, which tend to be much higher for online businesses, aren't included in cost of sales and are therefore excluded from gross margin caclulations. You clearly need to get some new specs ;-)

I know what I see.

PT + tiny margin

TPT+massive, mahoosive margin.

Are you really saying all of the difference goes on upkeeping the b&m stores?

Really?

"TPT and PT operate on similar margins !! Are you having a giraffe?"

A clear example of you not knowing the difference between gross margin and operating margin.

Oh I certainly do.

Thing about figures is, if tortured enough, they will comply with any narrative.

It's an online business, tiny mark up. What they pay suppliers, and what they charge, is a known known.

And it doesn't add up.

They're doing what the others are, making SFA in the hope of eliminating competition. It may work, but many have tried.

You clearly don't appreciate the difference betwen gross margin and operating margin; which begs the question what you understand at all.

Interesting but rather overly simplistic article.

E.g. He assumes that MS Galleon is unhappy just because the sp has dropped (it doesn't help) but MSG's primary reason for being unhappy is Topp's continuing refusual to offer a large range of MSG tiles. If MSG had its way, its tiles would account for at least of 30% of Topp's tile sales; effectively enabling MSG to potentially siphon off Topps profits without actually having to pay to acquire the 70% of Topps it doesn't already own.

If he actually bothered to step away from his keyboard for a moment and take a look outside he'd realise that, from Covid onwards, this has been a very tough period for retail generally and big ticket spending particularly. I still hold to the view that the majority of tile/flooring sales, excluding new construction, tend to align with discretionary refurbishments which can be deferred almost indefinitely, unlike repairs.

As regards on-line vs stores, I personally concur with his view that the majority of one-off purchasers still want to physically view tiles before they buy and therefore, more often than not, tend to make their purchases in-store rather than online. In part this will be due to tile retailers, unlike (say) electrical stores, not normally stocking common product lines; so you can't generally walk into a store, decide on a tile and then go and buy it cheaper from a different online seller, as you might (say) a tv. Although Topps has been making inroads into online sales it still has the largest independent store portfolio in the UK (which has been further increased by it's CTD acquisition)! Topps caters for both markets. It's as if he hasn't even bothered to look at its accounts!

With regard to financial firepower, Topps remains cash generative and is better placed than most of its direct competitors to deal with the continuing economic downturn; it's been doing exactly that since before Covid. Yes, its cash resources have become more depleted in the last financial year but that's because they've just completed the acquisition of Pro Tiler and opportunistic acquisition of CTD Tiles (the two acquisitions accounted for £18.9m of expenditure in the last financial year). Topps still has c£9m of cash and no debt; a far shout from where it was at the time of the 2008 financial crisis when it was lumbered with a large debt due to a mis-timed, debt funded return of capital to shareholders.

Https://www.msn.com/en-gb/money/other/should-i-buy-this-dividend-stock-that-one-analyst-says-is-210-undervalued/ar-AA1ygvJw?ocid=msedgdhp&pc=EDGEXST&cvid=96a0b3cdedc74513a2b32082596da4c1&ei=51

Have Topps gone one step too far with their latest acquisition?

https://www.toppsgroup.com/investors/rns-feed/rns-announcement/?rid=6335185

48.10 v 49.50p +2.25p

A good move up with some large-size buys

47p +1.35p (2.97%) / Better things to come

Chart with comments ... https://uk.advfn.com/p.php?pid=chartscreenshot&u=qLL1FPeoop%2F8Cz69WwYWnLtDpXE0KOVMqsm%2FEee0aiQ%3D

Today's move higher was due to Yesterday's Acquisition and with that a BREAKOUT in the chart and is with volume so very bullish.

Chart ... http://uk.advfn.com/p.php?pid=staticchart&s=L%5ETPT&width=600&height=265&p=2&t=1&dm=2&vol=1&cb=

....for them to get Alusid to IPO, hopefully later this year.

Not sure if this is news to those invested here, I dont follow Topps.

https://news.sky.com/story/tile-supplier-ctd-on-brink-of-collapse-as-sector-downturn-bites-13191288

It's not easy to read the ramblings of a socialist. At least Trotters should be happy with the new Marxist regime, they are going to build the new utopia using the highest cost and least reliable energy in the world.. If you believe that I have a bridge to sell you.

All of the traditional manufacturing jobs have gone east, on the orders of the UN/WEF world masters. they want us poorer, and our governments are dutifully delivering.

Today's Headlam offering confirms the malaise. It's tough out there.

I said "our historical manufacturing base". Our manufacturing base is a fraction of what it used to be (it's now less than 17% of UK GDP) and, as we saw during COVID put us at a distinct disadvantage to our international competitors. We struggled to source materials during the initial outbreak. Imagine how we would have faired if COVID had proven to have had a very high mortality rate. We have serious structural problems in the UK today because of Maggie's short-sighted policies. Change was needed but Maggie took it to extremes that have ended up favouring the few (and getting fewer) over the many. In the end it is in all our interests to keep imbalances in check because history shows us that if we don't revolutioni is often the next step. Thankfully civil unrest in the UK has never quite boiled over into open revolution but the elastic has, on many occasions in the past, been drawn fairly thin. Who now remembers Peterloo?

The Trotsky.....not really.....our 'destroyed manufacturing base'.... currently produces £180 billion in output a year.

Dcov, What would you expect with all those North Sea tax revenues and selling off the "family jewels"? Don't forget about Sid.

In the meantime, she and her government destroyed our historical manufacturing base and helped to replace it with cliches ("get on your bike", "loadsamoney" etc. etc,). The opportunity was just frittered away. We had massive unemployment and a generation of people was effectively cast onto the scrap heap (some were capable of being retrained but most never had the education or necessary capabilities - they either had a narrow range of manual skills learnt on the job or no skills at all). Rather than reducing debt they should have used this once in a lifetime opportunity to invest for the future benefit.

Who'd have then thought that flipping burgers at a fast food outlet for minimum wage and few benefits would become a lifelong job for many? Historically flipping burgers had been a stop gap for students and the like between leaving education and getting a "proper job". A job that would have enabled them to support a family, without income credits and not rely on food banks - remember those? Instead Maggie handed out tax incentives to try and lure overseas investors who, once the tax incentives dried up, more often than not simply upped sticks and moved on to the next country offering inducements.

With a properly managed sovereign fund (investing for a commercial return rather than just giving it away and hoping that some of the largesse might "stick") we might have tackled (at least in part) our unfunded state pension policy. Maggie gave it all away in one mad sugar rush. Short term policies for short term benefits. Maggie placed all her trust in the markets not realising that the markets weren't interested in UK plc; they were just in it for the "free lunch".

Maggie was an idealist who was lauded by her sycophants thena and now but we should at least be able to look back now and say that her economic policies were a long term failure. The UK had become a basket case when she came into power and all she ended up doing was delaying the decline. Maggie was the equivalent of Sir John Harvey-Jones at ICI; lauded for his business acumen but who fundamentally changed nothing (ICI operated in a highly cyclical market and always made loads of money during market upturns; the trick, which Harvey-Jone forgot, was to make enough money in the upturns to tide it over in the inevitable downturns that followed). Maggie failed to understand that business had become global with little or no affiliation with the UK (large UK businesses now tend to make most of their earnings abroad and have little or no care for the national interest that they might have once had).

The Trotsky....under Margaret Thatcher the debt to GDP ratio fell from 46% to 31%.

I have no issue with organic growth in complementary segments.

I do however think this is left wide open for them to buy another bonus by buying other businesses.

People can't have it both ways. One minute they are complaining about a fall in tile sales (in a very tough retail market) and the next they are complaining about the company setting itself new sales targets in complementary market segments. No pleasing some people.

Pro Tiler is looking like a very successful acquisition (they've already doubled sales in two years) and plan to double sales again. To have built a Pro Tiler-like business from scratch, assuming they had the necessary skillset, could easily have cost £10m+ and taken 4-5 years+. You have to build the website, market it and then steadily build sales until it breaks even. Pro Tiler was incorporated in 2010 and only managed c£8m of sales by 2021. Sometimes taking a short cut makes sense. The acquisition of Pro Tiler doesn't look so great at the moment because of the accounting treament they've had to adopt for the acquistion of the remaining 40%. TPT has had to absorb c£8m of acquisition costs being charged to the P&L over the last two years which has impacted both EPS and dividend cover but EPS and dividend cover should start to look a lot better by the end of this financial year (subject to current trading). You might ask why they didn't set their sights on a larger online tile retailer but that would be to ignore competition issues; so TPT has to buy ancilliary businesses and grow its own online presence orignanically and I've no doubt that the the online expertise within Pro Tiler will help their other online offerings too (with patience).

TPT was in dire straits back in 2008 having taken on c£80m of debt at the wrong time to purchase its own shares and that impacted the business without a doubt for over 10 years but the business is on a much sounder financial footing now than it has been for over 15 years. Also, they're not planning to be gung-ho about their new initiatives. They plan to roll out the new products in a limited number of stores to test the waters first (as they have already been doing with outdoor tiles).

A plan is better than no plan at all.

Mission 365 requires a huge leap in sales.

Can't see how they will make that organically. Looks like another LTIP where they will need to buy up other businesses to get their bonus.

Agreed,

The management has certainly become weaker over time with regards to experience on the tile market.

Robert Parker was clearly a fine CFO, but does that always translate to a CEO position.

Stephen Hopson is another money man with no experience of the industry.

The latest HR director lasted a matter of weeks, and I believe they are looking for a replacement Regional Durector of Sales.

It would appear all is not so rosy.

Alfista, We'll have to compare notes in 12-18 months time. The economy has been in the tank for the last 12 months and Topps Tiles has a mature store portfolio (so can't offset falling LfL sales with new store openings sales). These figures were already pencilled in. Where we go from here depends on how quickly the economy starts to recover. Whilst money remains tight people will continue to put off big ticket spending and the construction industry will remain subdued. Now is not the time for Topp Tiles to be trying to boost its top line by discounting. H2 is always better than H1 cost-wise and EPS may still surprise once the acquisition of ProTiler has been completed. You think bricks and mortar is dead; I disagree (and so does Amazon). ProTiler continues to perform well, in part, because its not so reliant on big ticket spending; it's more reliant on small ticket spending (repairs rather than wholesale replacement).

Dessertstar, Unlike B&Q, TPT does not sell potted plants & grow bags! TPT is far more reliant on big ticket spending than B&Q; small ticket spending always tends to be less affected in recessions as people opt to repair rather than replace and extend the life of what they've already got. So, unless B&Q gives a breakdown of its tile business, a direct comparison is like comparing chalk and cheese.

As regards, having sold laminate in the past and subsequently exiting the market, I would suggest that the environment has changed (some of its previous bricks and mortar competitors have gone under) and it may prove easier to grab some of that bricks and mortar market this time round. One would also hope that they've learnt from their past mistakes. Whether or not you like their current tile range, over 60% of their tile range is unique to Topps; so, if people do like their tiles, they have no option but to buy from Topps. It remains to be seen whether they can do something similar with laminates. I'm somewhat doubtful, uniqueness wise, but if selling laminate doesn't increase their fixed running costs, making greater utilisation of existing store space is never a bad thing if that space cannot be put to more profitable use.

Finally, as regards Parkside, it has always struck me as being a rather niche business and I'm not sure what its addressable market size is. It is therefore either a question of the addressable market not being that big to start with or failing to make the break through (yet). If the latter, they've recently restructured the Parkside business and it needs to be given time to see if the changes start to bear fruit. If the former, you have to consider whether there's any potential cross-selling benefit to the wider business (at the end of the day, a sale is a sale, whether it's made directly by Parkside or indirectly by Topps Tiles as a result of buisness relationships fostered by Parkside). Regardless, at the moment I don't see a reason for TPT to jetison profitable sales.

Well Trotters. I don't know if your position as company spokesperson and chief propagandist is self appointed, or if you are actually connected with the business, but you are busting a gut to support.

Rising costs, falling revenues. Never a good recipe is it.

Trotsky , I simply am pointing out that we get the same old repeated message from Management and personally I no longer have any confidence In then

You mention the new 365 , I will do some research but some of those categories Topps used to sell and exited like laminate flooring. I point again to parkside and what waste of management time it has been.

This company needs fresh leadership in my opinion.

B&Q figures yesterday were not showing a -10% LFL .

Dessertstar, Have you looked at the economy lately? The top line isn't the be all and end all. TPT has managed to improve its gross margins in H1 and preserve cash (that's no mean feat). I'm sure that TPT and other tile retailers could grab higher sales if they were willing to discount but any increase in sales would likely be insufficient to offet the falls in gross margins and operating profits. Going "large" in a recession (technical or not) is usually a one-way ticket to insolvency.

Some feel good factor may at last be returning to the economy (early shoots perhaps) but that probably only extends as far as a few more latte in the local coffee shop or a meal out at the moment. We need to see interest/mortgage rates starting to fall before people will start to think the worst is over and start considering spending again. People have been trading up to 35 year mortgages just to keep their mortgage costs in check; hardly a good indicator that they'd be willing to add another £5-£10k to their mortgage loan to undertake some DIY!

Good presentation this morning. Interesting to note that since acquiring 60% of ProTiler in March 2022 for £5.3m a further £8.7m has been expensed through the P&L (of which £3.1m has been expensed in 24H1) with regard to the acquisition of the remaining 40% which is expected to be completed in 24H2.

So, although that the acquisition cost of ProTiler for tax purposes will be £14m, only £5.3m of the acquisition cost will be recognised in fixed assets. In effect, under the current accounting rules, £8.7m of the acquistion cost has been written off despite ProTiler having doubled sales since the initial acquistion and arguably now being worth more than the £14m being paid. Under previous accounting rules all of the costs would have been capitalised in fixed assets and only ever written off to the extent that the value of the business was deemed to have fallen below the amount paid.

So, the acquistion has not only reduced profits by £8.7m over the last 24 months but, to "add insult to injury", only 60% of ProTiler's profits have been attributed to TPT's shareholders to date despite its sales and operating profits being reported gross (the adjustment is made "below the line"). So, completion of the remaining ProTiler acquisition, should immediately enhance profits in 24H2 (at least partially, in not fully, offsetting the impact of the current top line sales decline), in addition to the normal seasonal cost addjustments (heat and light, and holiday pay) and earnings per share should also be enhanced too (all other factors being equal). On the flipside, of course, TPT now has to pay out a further £8.7m in cash (I don't believe that there is any provision for the earn out to be paid in shares).

I'm not trying to "paint lipstick on the pig" or gloss over the impact of falling sales, just merely pointing out that the ProTiler acquisition has been articificially depressing the profits of TPT for the last 24 months. Not only that, no tax relief is obtained for the acquisition costs being expensed.

TheTrotsky,

I'm not sure that assumption is correct as Topps also sell adhesives and ancillary products. As far as I know it was just 1 in 5 of the tile market including adhesives etc.

Whatisgoingon, I accept that management bonus schemes should always be kept under review but the 1:5 target is, I believe, soley in reference to tiles and ProTiler doesn't sell tiles (it sells ancillary products). Most, if not all, of the growth in tile sales have been through organic growth.

I agree 100% with dessertstars view on Management Share Schemes.

In order to hit their target of 1 in 5, they simply bought other businesses.

Where the strategy used to be "profitable market share" the word profitable didn't matter to them in this case.

Scandalous really that they can make huge bonuses in this way.

Bad news in rns today.

Thank you for your analysis and opinion. Fascinating.

Considering the current economic backdrop and the impact of minority interest accounting on the results (including the cost of acquiring the remaining interest in ProTiler being expensed to the P&L), the last results were actually pretty good. TPT is not immune from the economic headwinds but, despite the tile market contracting, TPT has managed to grow its market share. Also, the fact that gross margins have fallen is somewhat misleading; the ProTiler brand actually delivers similar operating margins to the Topps Tile brand. When, as expected, TPT buys out the remaining minority interests in ProTiler at the end of March there will be an immediate boost to both PBT and EPS (even if FY24 results continue to slide). Furthermore, TPT has a healthy amount of cash and continues to be cash generative.

When the economy begins to rebound TPT will be in a very stong position. FY24 may prove tough as last year's inflationary rises really start to bite and people start to tighten their belts still further (as the recent Q1 update showed) but TPT is well placed to benefit from any future uptick.

I'm really not sure what you expected from last year's results unless you expected TPT to hand its profits to MS Galleon on a plate! MS Galleon clearly has an axe to grind (it wants all of the benefits of outright ownership without the associated cost). What's your beef?

Thank you for your calm and considered reply - but yes I am aware that Galleon hold a large chunk and as it happens still think that the performance was less than stellar and joined them in voting against the remuneration package and the Chair of the remuneration committee. It's called expressing a personal opinion which clearly you don't agree with - which is fine.

Why don't you do some research before you post?

The directors' remuneration (including LTIPs) was c£1.7m or c0.6% of turnover last year. The reason that there was such a large vote against their remuneartion package (and the head of the remuneration committee) can be summed up in one shareholder - MS Galleon - who owns just under 30% of the shares and wants to dictate who TPT buys their products from without actually paying the premium needed to acquire a controlling interest.

If MS Galleon had their way, TPT would now be buying c30% of their tiles from MS Galleon and no doubt diverting profits from TPT to MS Galleon in the process. The other c70% of shareholders told them where to get off last January and it still rankles with them. If you think the results are less than stellar in the current economic environment, think how much less stellar they would have been if MS Galleon had successfully diverted most of the profits to themselves!

Interestingly, in today's investors' presentation TPT were keen to stress that the operating margin for both the Topps Tiles and Online Pure Play (primarily ProTiler) businesses were in the range of 8-10% (despite Topps Tiles having a gross margin of c60% and Online Pure Play having a gross margin of c30%) i.e. although gross margin is a metric, it's not the key metric when comparing the relative performance of the two businesses. The Topps Tiles business has much higher distribution, sales and other overheads than the Online Pure Play business and, as such, (a) the two businesses do compliment each other and, (b) driving sales in the Online Pure Play business will not harm the bottom line (both businesses are delivering fairly similar marginal operating returns).

Not sure it will be a "huge drag". It may have lower gross margins than Topps but it also has lower overheads and a much higher growth trajectory. Unlike Topps, ProTiler doesn't have to bear store costs (which are expensed through distribution and selling costs). The margin including distribution and selling costs has fallen from 18.5% to 17.3% YoY which, given the current economic backdrop, is not too bad.

If you say so. ProTiler and the other web operation will be a huge drag on the gross margin going forwards. Indeed, many of their competitors online seem determined to lose money.

Never mind, the "investment" in covering the warehouse roof with Chinese polysilicone solar panels, made using coal, will provide all the electricity they need.

At mid day

In June

If it's not cloudy.

~£2.5m of the decline in profits YoY is due to ProTiler share puchase expenses (provision for the expected cost of acquiring the remaining 40% of the ProTiler shares under the terms of the original share purchase agreement). Historically, under old accounting conventions, such costs would have been capitalised rather than expensed. Regardless of whether you agree or disagree with the current accounting convention, most, if not all, of these costs should not be recurring beyond March 2024 (assuming that Topps exercises its option at the earliest opportunity). It should also be noted that these expenses are not tax deductible for purposes of computing corporation tax (they are, instead, deductible for the purposes of calculating any chargeable gains should ProTiler ever be sold).

Also, ~£0.7m of the PAT is currently attributable to non-controlling interests (the original shareholders of ProTiler) and is excluded from EPS atrributable to Topps' shareholders (ProTiler is currently accounted as if Topps owns 100% of the shares and the profits attributable to the original shareholders of ProTiler is then adjusted out via the non-controlling interest line). Once the acquisition of the remaining 40% is completed there should be an automatic boost to the profits attributable to the Topps' shareholders.

For comparison purposes, the adjusted profit before tax is probably a fairer reflection of the profits that will be attributable to Topps shareholders once the acquisition of the outstanding ProTiler shares has been completed and, on that basis and assuming corporation tax at 25%, the adjusted earnings per share have fallen from 5.9p per share to 4.8p per share YoY.

First impressions. Big decline in profits, dividend exceeded profit, and current market conditions subdued.

Looks like the market is reflecting that.

TPT is now in a far better financial position than it has ever been before/during previous recessions/downturns (it's debt free). Who else here still remembers the share buyback made using borrowed funds back in 2006? It proved to be a total disaster following the 2008 banking collapse; took TPT years to repay the debt, the dividend was cut to zero (and has only recently started to recover albeit still less than 50% of pre-2008 levels) and the share price still hasn't recovered!

I would suspect that TPT is in a far better financial position than many of its direct competitors and is therefore well placed to increase market share if some of those competitors go to the wall (as they inevitably do during recessions). So, although the cake may be smaller TPT's share of the UK market is likely to get bigger. TPT may not be totally immune but it might ride out a recession/downturn a lot better than some might otherwise give it credit for.

Producers are talking of really significant drop in volumes, causing a lot of kiln closures and job furloughs. Can't really see how Topps can avoid the negative impacts of high interest rates and reduced construction activity. Doesn't take a candlestick to shed light on an industry in tough times IMHO

Plenty of historic overhead supply at 60, which would be expected to impede upward progress. The chart is deceptive, until the candlesticks are looked at . The shadows, that part of the trading outside the open and close, at least equals , the differences between open and close. The verdict, the equity is volatile. volume in the last couple of days was less than 10,000. Not really a suitable equity for an investor , with such volatility .