Topps Tiles Regulatory News (TPT)

31 March 2021

Topps Tiles Plc

First Half Trading Update

Resilient performance against a challenging backdrop

Topps Tiles Plc ("Topps" or the "Group"), the UK's leading tile specialist, announces a trading update for the 26 week period ended 27 March 2021.

Total revenues for the 26 week period were £103.6 million (2020: £106.2 million), including Retail like-for-like growth over the period of 2.0%.

Retail

As announced in our trading update in early January, Retail like-for-like sales increased by 19.9% in the first 13 weeks of the current financial year, with good growth in sales across both of our main customer groups, professional fitters and homeowners, and margins in line with expectations.

The additional trading restrictions imposed during the current lockdown, including the closure of stores to retail customers, significantly impacted sales and margins in the second quarter. Revenues from homeowners were particularly impacted, contributing to an overall reduction in like-for-like sales of 17.3% in the second quarter. Trade sales are transacted at lower gross margins than sales to homeowners and there are additional costs associated with higher levels of delivery, so we expect second quarter gross margins to be lower than in the first quarter, as highlighted in our January trading update.

As trading restrictions lift by the middle of April, we expect a sharp increase in sales, with margins recovering to more normal levels. This view is underpinned by the Group's strong trading performance following the end of the first lock-down last summer.

Commercial

Within the Commercial sector, some market sectors have also been significantly affected by Covid-19, with particular impacts on the restaurants, bars and leisure areas. As such, sales in the first half were down 10% year on year, representing a robust performance in difficult market. However, forward indicators are positive, with firm orders in hand increasing consistently over the trading period, and we expect to make good progress in the second half as the economy continues to unlock.

Rob Parker, CEO, said:

"Our revenues for the first half reflect a very strong first quarter followed by a period over the majority of the second quarter when sales, particularly to homeowners, were significantly impacted by the trading restrictions imposed on our stores during the third national lockdown. The Group adapted to the changed environment swiftly and effectively, producing a resilient performance in the circumstances.

We are looking forward to the lifting of lockdown restrictions in April and are concentrating on being well prepared for the return of all customers to our stores. We have a strong balance sheet, are debt-free, and are well positioned for growth this financial year as we move towards our goal of '1 in 5 by 2025'*."

The Group will announce its Half Year Results for the period on 18 May 2021.

* Refers to Topps' goal of accounting for £1 in every £5 spent on tiles and associated products in the UK by 2025, thereby increasing its market share to 20% from approximately 17% at present.

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Notes to editors

Topps Tiles Plc is the UK's largest specialist supplier of tiles and associated products, targeting the UK domestic refurbishment and commercial market and serving a retail and trade customer base from 331 nationwide Retail stores, 4 Commercial showrooms and three trading websites: www.toppstiles.co.uk, www.parkside.co.uk and www.stratatiles.co.uk.

Since opening its first store in 1963, Topps has maintained a simple operating philosophy ‐ inspiring customers with unrivalled product choice and providing exceptional levels of customer service. For further information on the Group, please visit http://www.toppstilesplc.com/