Last close As at 05/08/2026
GBP0.36
▲ 1.90 (5.56%)
Market capitalisation
GBP71m
Research: Consumer
Topps Tiles’ (TPT’s) H124 results demonstrate the effects of the general market softness of spend on repairs, maintenance and improvement, as evidenced by other companies and external data. Of more importance is TPT’s updated strategy, which includes targeting new markets and further/better leverage of existing brands, and ‘medium-term’ financial goals, the most notable being an indicated more than quadrupling of adjusted PBT from our FY24 estimates. Management points to more encouraging forward indicators for customer spend (including mortgage approvals and consumer confidence), albeit current trading remains weak. With a prospective FY24 EV/sales multiple, excluding leases, of 0.25x, the shares look primed to provide strong returns when the market backdrop becomes more supportive, and if management delivers on its strategy (as it has previously) and new financial goals. Our forecasts are under review.
Topps Tiles |
Looking to the future |
H124 results |
Retail |
21 May 2024 |
Share price performance
Business description
Analysts
Topps Tiles is a research client of Edison Investment Research Limited |
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Topps Tiles’ (TPT’s) H124 results demonstrate the effects of the general market softness of spend on repairs, maintenance and improvement, as evidenced by other companies and external data. Of more importance is TPT’s updated strategy, which includes targeting new markets and further/better leverage of existing brands, and ‘medium-term’ financial goals, the most notable being an indicated more than quadrupling of adjusted PBT from our FY24 estimates. Management points to more encouraging forward indicators for customer spend (including mortgage approvals and consumer confidence), albeit current trading remains weak. With a prospective FY24 EV/sales multiple, excluding leases, of 0.25x, the shares look primed to provide strong returns when the market backdrop becomes more supportive, and if management delivers on its strategy (as it has previously) and new financial goals. Our forecasts are under review.
Year end |
Revenue (£m) |
PBT* |
EPS* |
DPS |
P/E |
Yield |
09/22 |
247.2 |
15.9 |
6.2 |
3.6 |
7.0 |
8.3 |
09/23 |
262.7 |
13.8 |
4.6 |
3.6 |
9.4 |
8.3 |
09/24e |
249.6 |
7.9 |
2.7 |
3.6 |
16.1 |
8.3 |
09/25e |
263.8 |
11.9 |
4.3 |
3.6 |
10.0 |
8.3 |
Note: *PBT and EPS are normalised, excluding amortisation of acquired intangibles, exceptional items and share-based payments.
The market weakness and TPT’s relative outperformance were reported in the April 2024 pre-close trading update. The new news is the improvement in the gross margin (+1.1pp to 53.9%) and lower operating costs that helped to mitigate the revenue decline so that adjusted PBT fell by 29.5%, to £3.1m (H123: £4.4m). Despite the drop in profitability, the cash position at the period end was relatively unchanged, enabling the declaration of a stable interim dividend of 1.2p per share. Current trading for the first seven weeks of H224 remains weak; total sales are 7.3% lower year-on-year, which appears broadly similar to Q224.
Having achieved its prior market share target of ‘1 in 5 by 2025’ two years ahead of schedule, management has introduced new financial goals, ‘Mission 365’, alongside the updated strategy. This includes a ‘medium-term’ (date not specified) revenue goal of £365m with an adjusted (company definition) PBT margin of 8–10% (in line with prior aspirations), a ‘minimum of £30m’. From FY23’s base (revenue of £262.7m and adjusted PBT of £12.5m), the goals represent growth of 39% and at least 140%, respectively, and significantly more versus FY24’s lower figures (consensus revenue estimate per management of £250m and our forecast adjusted PBT using management’s definition of £6.5m).
The new strategy has five key areas of focus that management expects will drive growth: 1) modernise the trader digital experience in Topps Tiles, including investing in and improving the trade website and app; 2) expand into new product categories (ie hard surface coverings), increasing TPT’s addressable markets by 75%; 3) business-to-business sales (ie better leveraging TPT’s three complementary brands); 4) continue to support Pro Tiler, which has provided exceptional growth since acquisition; and 5) develop Tile Warehouse, TPT’s offering for value-conscious customers, to maturity.
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Research: Metals & Mining
On 9 May, Pan African announced that it was narrowing its production guidance for the year ending 30 June 2024 to 186–190koz (cf 180–190koz previously), notwithstanding the cessation of production from surface sources at Evander in H2. Group AISC guidance was maintained at US$1,325–1,350/oz (at ZAR18.50/US$) however. Consequently, we have increased our H2 production forecast by 2.5% as well as increasing our H224 gold price by 9.2% to result in a US$20.6m positive variance in H224e revenue, only partially offset by incidental higher costs, to result in a 41.7% increase in H224e normalised EPS and a 19.1% increase in FY24e normalised EPS. Production guidance was also provided for FY25 of 215–225koz, which compares with Edison’s prior (and unchanged – and, in the event, relatively conservative) forecast of 216.6koz.