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4 Oct 2017 07:00
4 October 2017
Topps Tiles Plc
Trading Update
Trading
Topps Tiles Plc (the "Group"), the UK's largest tile specialist, announces a trading update for the 52 week period ending 30 September 2017.
Revenues for the 52 week period are expected to be in the region of £211.6 million (2016: £215.0 million). Like-for-like revenues in the 52 weeks decreased 2.9% on the prior year (2016: +4.2%).
Like-for-like revenues in the 13 weeks ended 30 September 2017 decreased by 3.0%.
Whilst we have seen a moderate improvement in trading in our final quarter, market conditions remain challenging and the Group expects adjusted pre-tax profits for the 52 week period ended 30 September 2017 will be at the lower end of the current range of market expectations.
The Group is now trading from 372 stores (2016: 351), having opened a net five stores during the quarter.
Analysis of LFL sales by quarter
| Q1 | Q2 | First Half | Q3 | Q4 | H2 | Full Year |
FY 2017 | +0.3%1 | -4.1% 2 | -1.9% 3 | -4.7%4 | -3.0% | -3.9% | -2.9% |
FY 2016 | +4.4% | +4.9% | +4.7% | +6.2% | +1.4% | +3.8% | +4.2% |
1 Quarter 1 in 2017 included one additional trading day due to the timing of public holidays which we estimate increased LFL sales growth by c.0.6%. This effect reversed during the second quarter.
2 Quarter 2 2017 included the loss of a trading day explained in (1) above and also the effect of a later Easter which generated one additional trading day. These two adjustments broadly offset each other over the quarter.
3 The net impact of (1) and (2) over the first half of 2017 was one additional trading day which benefited LFL sales growth by c.0.3%.
4 Quarter 3 2017 includes the loss of a trading day, due to a later Easter, when compared to the prior year. The impact of this is to reduce LFL sales by approximately 0.6%.
Strategic Progress
We continue to invest in the business and to make good progress with our strategy of "Out-Specialising the Specialists" to strengthen our market leading position. We have also maintained good control over gross margins and effective cost management over the year. Specific strategic initiatives in the period include:
| · Inspiration - Our aim is to continue to inspire our customers and deliver competitive advantage by evolving both our online experience and the store environment. Our customer service ratings were at record levels during the period and we continue to build strong customer engagement with our industry leading online visualiser.
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| · Range - We have launched 34 new tile ranges over the last 12 months. New products accounted for 9.2% of our tile sales for the year. Continued focus on increasing the contribution of in-house developed ranges, together with more own brand and owned brand ranges, means that more than 83% of our tiles are now exclusive to us.
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| · Trade - Our Rewards+ loyalty scheme is now 12 months old and has been a great success. We have 55,000 traders registered, an increase of around 35% year on year. |
| · Commercial - We completed a small acquisition in the commercial tile market during the period and continue to build our capability for addressing commercial opportunities originating through our store network.
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| · People - This quarter we have finalised our business-wide service training for all store management and further developed the use of our new learning management system, "theHub", which has resulted in the business being shortlisted for an external award.
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Matthew Williams, Chief Executive Officer, said: "It has been an important development year for the Group. Significant strategic progress has been made and we remain excited by the growth opportunities open to us. Despite this, the tougher market conditions we first highlighted in Q2 continued into the final quarter and, as a result, we are taking a prudent view on market conditions for the year ahead.
"We remain focused on our strategy of "Out Specialising the Specialists" and are beginning to gain traction with a number of new initiatives. In particular, we have made progress in the commercial tile market, completing a small acquisition during the period and building more commercial capability internally. We will update shareholders on this initiative in more detail at the time of our full year results in November."
Topps Tiles will announce its final results for the 52 week period ended 30 September 2017 on Tuesday 28 November 2017.
- Ends -
Enquiries:
Topps Tiles Plc | 0116 282 8000 |
Matthew Williams, Chief Executive Officer |
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Rob Parker, Chief Financial Officer |
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Citigate Dewe Rogerson | 020 7638 9571 |
Kevin Smith / Nick Hayns |
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Note to editors
Topps Tiles Plc is the UK's largest specialist supplier of tiles and associated tools and accessories, targeting the UK domestic refurbishment market and serving a retail and trade customer base from 372 stores nationwide.
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, please visit www.toppstiles.co.uk/media-centre/investors.asp
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