Last close As at 05/08/2026
GBP0.36
▲ 1.90 (5.56%)
Market capitalisation
GBP71m
Research: Consumer
Topps Tiles’ (TPT’s) H124 update shows that trading deteriorated further in Q224, following the weakness that began in Q124. Management attributes the decline to the soft external environment as noted by others in the repairs, maintenance and improvement market, other home improvement/DIY retailers and data from the Office for National Statistics. For the individual businesses, the trends remain consistent with previous updates: strong revenue growth for Online Pure Play offset by weakness in Topps Tiles stores, and Parkside continues to see a significant improvement in its financial performance. The company is well positioned for the upturn when it comes given its leading brand, breadth of product and customer service. The share price looks extremely undervalued with a prospective EV/sales multiple of 0.25x versus historical multiples of 0.7x and above in years when TPT reported operating margins that are consistent with current estimates.
Topps Tiles |
Market tough through H124 |
H124 trading update |
Retail |
3 April 2024 |
Share price performance
Business description
Next events
Analysts
Topps Tiles is a research client of Edison Investment Research Limited |
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Topps Tiles’ (TPT’s) H124 update shows that trading deteriorated further in Q224, following the weakness that began in Q124. Management attributes the decline to the soft external environment as noted by others in the repairs, maintenance and improvement market, other home improvement/DIY retailers and data from the Office for National Statistics. For the individual businesses, the trends remain consistent with previous updates: strong revenue growth for Online Pure Play offset by weakness in Topps Tiles stores, and Parkside continues to see a significant improvement in its financial performance. The company is well positioned for the upturn when it comes given its leading brand, breadth of product and customer service. The share price looks extremely undervalued with a prospective EV/sales multiple of 0.25x versus historical multiples of 0.7x and above in years when TPT reported operating margins that are consistent with current estimates.
Year end |
Revenue (£m) |
PBT* |
EPS* |
DPS |
P/E |
Yield |
09/22 |
247.2 |
15.9 |
6.2 |
3.6 |
7.2 |
8.2 |
09/23 |
262.7 |
13.8 |
4.6 |
3.6 |
9.6 |
8.2 |
09/24e |
249.6 |
7.9 |
2.7 |
3.6 |
16.3 |
8.2 |
09/25e |
263.8 |
11.9 |
4.3 |
3.6 |
10.1 |
8.2 |
Note: *PBT and EPS are normalised, excluding amortisation of acquired intangibles, exceptional items and share-based payments.
Revenue weaker than expected
TPT’s H124 revenue declined by 5.9% year-on-year against a ‘record’ H123 comparative, and represented a more negative trend than the 4% fall reported for Q124. The main cause for the overall decline was further weakness in Topps Tiles stores (c 88% of group revenue in FY23), with a revenue decline of 11.3% in Q224 following Q124’s fall of 7.1%. Here, management points to lower footfall, more so by retail than trade customers, albeit both have reduced, while conversion rates to sales actually grew, providing some encouragement about the company’s relative positioning. Online Pure Play continues to trade strongly, growing by 38.3% year-on-year, and it is pleasing to see TPT will purchase the remaining 40% stake soon and retain the co-founders. Parkside’s financial performance has improved, achieving break-even during H124 despite the commercial market being difficult.
Forecasts for FY24–25 reduced
The weaker-than-expected revenue growth compounds management’s prior guidance that profits will be H224 weighted due to the typical seasonality of profits from higher energy usage during the winter months and accrual for holiday pay. For Topps Tiles retail stores in particular, lower cost of goods pressures and ongoing operating cost controls have been offset by lower volumes and operating cost inflation and leverage. Management will provide details about future opportunities and goals at the interim results presentation. We reduce our FY24 and FY25 PBT forecasts, the former by 40%, with the broad assumption that H224 revenue declines by c 4% helped by a more supportive macro environment (eg real wage growth and lower interest rates), as well as an easier comparative.
Exhibit 1: Financial summary
Year end 30 September; accounts IFRS; £m |
2021 |
2022 |
2023 |
2024e |
2025e |
||
INCOME STATEMENT |
|||||||
Revenue |
|
|
228.0 |
247.2 |
262.7 |
249.6 |
263.8 |
Cost of sales |
(97.3) |
(111.8) |
(123.5) |
(116.1) |
(123.5) |
||
Gross profit |
130.7 |
135.4 |
139.2 |
133.5 |
140.3 |
||
EBITDA |
|
|
47.6 |
44.2 |
42.0 |
35.6 |
40.0 |
Operating profit (before amort. and excepts.) |
|
|
20.6 |
19.8 |
18.1 |
11.3 |
15.3 |
Amortisation of acquired intangibles |
0.0 |
0.0 |
0.0 |
(0.5) |
(0.5) |
||
Exceptionals |
(1.9) |
(4.5) |
(6.1) |
(2.0) |
0.0 |
||
Share-based payments |
(0.7) |
(0.5) |
(0.9) |
(0.9) |
(0.9) |
||
Reported operating profit |
18.0 |
14.8 |
11.1 |
8.0 |
13.9 |
||
Net Interest |
(4.1) |
(3.9) |
(4.3) |
(3.4) |
(3.4) |
||
Joint ventures & associates (post tax) |
0.0 |
0.0 |
0.0 |
0.0 |
0.0 |
||
Exceptionals |
0.0 |
0.0 |
0.0 |
0.0 |
0.0 |
||
Adjusted profit before tax (company) |
|
|
15.0 |
15.6 |
12.5 |
6.5 |
10.5 |
Profit before tax (norm) |
|
|
16.5 |
15.9 |
13.8 |
7.9 |
11.9 |
Profit before tax (reported) |
|
|
14.0 |
10.9 |
6.8 |
4.5 |
10.5 |
Reported tax |
(3.3) |
(1.8) |
(2.9) |
(1.7) |
(2.9) |
||
Profit after tax (norm) |
13.3 |
12.4 |
9.8 |
5.7 |
8.6 |
||
Profit after tax (reported) |
10.7 |
9.2 |
3.9 |
2.8 |
7.6 |
||
Minority interests |
(0.0) |
(0.2) |
(0.7) |
(0.4) |
0.0 |
||
Discontinued operations |
0.0 |
0.0 |
0.0 |
0.0 |
0.0 |
||
Net income (normalised) |
13.3 |
12.2 |
9.1 |
5.4 |
8.6 |
||
Net income (reported) |
10.6 |
9.0 |
3.2 |
2.5 |
7.6 |
||
Average number of shares outstanding (m) |
195 |
196 |
196 |
197 |
197 |
||
EPS - basic normalised (p) |
|
|
6.81 |
6.22 |
4.63 |
2.73 |
4.39 |
EPS - normalised fully diluted (p) |
|
|
6.73 |
6.15 |
4.59 |
2.70 |
4.35 |
EPS - basic reported (p) |
|
|
5.46 |
4.60 |
1.63 |
1.25 |
3.87 |
EPS - adjusted (company) (p) |
|
|
6.02 |
6.14 |
4.34 |
1.98 |
3.87 |
Dividend (p) |
3.10 |
3.60 |
3.60 |
3.60 |
3.60 |
||
Revenue growth (%) |
18.2 |
8.4 |
6.3 |
(5.0) |
5.7 |
||
Gross margin (%) |
57.3 |
54.8 |
53.0 |
53.5 |
53.2 |
||
Normalised operating margin (%) |
9.0 |
8.0 |
6.9 |
4.5 |
5.8 |
||
BALANCE SHEET |
|||||||
Fixed Assets |
|
|
122.5 |
119.0 |
109.0 |
108.8 |
107.8 |
Intangible Assets |
0.5 |
7.5 |
6.9 |
8.2 |
9.3 |
||
Tangible Assets |
119.1 |
109.4 |
100.2 |
98.6 |
96.7 |
||
Investments & other |
2.9 |
2.1 |
1.9 |
1.9 |
1.9 |
||
Current Assets |
|
|
65.6 |
61.8 |
65.4 |
60.5 |
64.0 |
Stocks |
32.8 |
38.6 |
36.4 |
34.2 |
36.3 |
||
Debtors |
4.5 |
6.4 |
5.3 |
5.2 |
5.3 |
||
Cash & cash equivalents |
27.8 |
16.2 |
23.4 |
20.7 |
22.0 |
||
Other |
0.5 |
0.5 |
0.4 |
0.4 |
0.4 |
||
Current liabilities |
|
|
(69.3) |
(63.3) |
(66.9) |
(66.9) |
(69.5) |
Creditors |
(47.4) |
(43.7) |
(45.1) |
(50.5) |
(53.2) |
||
Tax and social security |
(2.0) |
(1.2) |
(0.4) |
(0.4) |
(0.4) |
||
Short term borrowings |
0.0 |
0.0 |
0.0 |
0.0 |
0.0 |
||
Leases |
(19.5) |
(18.2) |
(15.6) |
(15.6) |
(15.6) |
||
Other |
(0.4) |
(0.4) |
(5.9) |
(0.3) |
(0.3) |
||
Long-term liabilities |
|
|
(93.8) |
(88.4) |
(81.1) |
(79.7) |
(78.3) |
Long-term borrowings |
0.0 |
0.0 |
0.0 |
0.0 |
0.0 |
||
Leases |
(91.8) |
(84.7) |
(78.9) |
(77.5) |
(76.0) |
||
Other long-term liabilities |
(2.0) |
(3.7) |
(2.2) |
(2.2) |
(2.2) |
||
Net Assets |
|
|
25.0 |
29.0 |
26.4 |
22.7 |
24.1 |
Minority interests |
0.0 |
2.5 |
3.2 |
0.4 |
0.4 |
||
Shareholders' equity |
|
|
25.0 |
31.5 |
29.6 |
23.1 |
24.5 |
CASH FLOW |
|||||||
Operating Cash Flow |
47.6 |
44.2 |
42.0 |
35.6 |
40.0 |
||
Working capital |
(14.6) |
(11.0) |
3.4 |
7.8 |
0.3 |
||
Exceptional & other |
(0.8) |
(2.9) |
(0.8) |
(0.9) |
(0.5) |
||
Tax |
(1.5) |
(3.5) |
(3.3) |
(1.7) |
(2.9) |
||
Net operating cash flow |
|
|
30.6 |
26.8 |
41.3 |
40.8 |
36.9 |
Capex |
(2.3) |
(3.0) |
(4.2) |
(6.4) |
(6.1) |
||
Acquisitions/disposals |
(0.2) |
(4.0) |
0.0 |
(7.5) |
0.0 |
||
Net interest |
(4.1) |
(3.9) |
(4.0) |
(3.4) |
(3.4) |
||
Equity financing |
0.1 |
0.1 |
0.0 |
0.0 |
0.0 |
||
Dividends |
0.0 |
(8.0) |
(7.5) |
(7.1) |
(7.1) |
||
Other |
(27.4) |
(19.6) |
(18.5) |
(19.1) |
(19.1) |
||
Net Cash Flow |
(3.2) |
(11.5) |
7.1 |
(2.7) |
1.3 |
||
Opening net debt/(cash) |
|
|
(26.0) |
(27.8) |
(16.2) |
(23.4) |
(20.7) |
FX |
0.0 |
0.0 |
0.0 |
0.0 |
0.0 |
||
Other non-cash movements |
5.1 |
(0.1) |
0.1 |
0.0 |
0.0 |
||
Closing net debt/(cash) |
|
|
(27.8) |
(16.2) |
(23.4) |
(20.7) |
(22.0) |
Closing net debt/(cash) including leases |
|
|
83.5 |
86.7 |
71.1 |
72.4 |
69.7 |
Source: Topps Tiles accounts, Edison Investment Research
|
|
Research: Industrials
Solid State’s trading update affirms the sustained strength in demand throughout H224, resulting in record FY24 revenue and adjusted PBT ahead of prior consensus of £155m and £12.5m, respectively. This is attributable to the earlier-than-expected delivery of a NATO contract. As a result, consensus FY24 revenue and adjusted PBT estimates have been raised by c 6% and c 20%, with respective FY25 estimates declining commensurately.