Broker snap: Current trading weak for Topps Tiles

While Topps Tiles' interim results were broadly in line, finnCap has reduced its forecasts full-year forecasts after factoring in weaker-than-expected current trading.Topps registered a half-year pre-tax profit of £7.2m, just under the £7.4m the broker estimated. However, the 'miss' came at the earnings before interest and tax (EBIT) level after operating expenditure was more than anticipated.However, like-for-like sales in the first seven weeks of the second half fell by 2.1%, "although apparently on an improving trend." While the third quarter comparator is a little easier, the fourth quarter comparator is tougher, notes analyst David Stoddart."We remain bearish on the consumer outlook, which we expect to remain restrained for many months," he said.Pre-tax profit and earnings per share forecasts for the 12-month period have both been scaled back by 7.4%.Nevertheless, a 'buy' rating and target price of 75p are maintained.---BC Topps Tiles