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LONDON, Feb 27 (Reuters) - British tile and wood flooring
retailer Topps Tiles warned on full year profit on
Wednesday, blaming weak consumer spending in the home
improvement sector, hammering its shares.
The group forecast that profit for its first half to March
28 will be "significantly below" the prior year level, while
adjusted pretax profit for its full year to Oct. 3 will be
"materially below" the bottom end of the current range of market
expectations of 13.5 million pounds ($17.5 million) to 14.5
million pounds.
Topps made adjusted pretax profit of 16 million pounds in
2018-19.
Shares in the group were down 25% at the opening, while B&Q
owner Kingfisher and Wickes owner Travis Perkins
were down 2.4% and 1.6% respectively.
Topps said retail like-for-like sales fell 5.5% in the eight
weeks to Feb. 22, having fallen 5.4% in its fiscal first quarter
- a shortfall it had blamed on political and economic
uncertainty in the run up to December's election.
Analysts at Liberum cut their full year profit forecast by
about 50% to 7 million pounds and shifted their recommendation
from 'buy' to 'hold'.
Chief executive Rob Parker said in a statement that the
company would reduce costs to remain competitive.
"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," he said.
Topps' update countered official UK retail sales data
published last week which showed that British shoppers started
spending again at the start of the year after a sluggish end to
2019.
($1 = 0.7696 pounds)
(Reporting by James Davey; editing by Sarah Young)
