Sparks - Topps Tiles

Topps Tiles’ strong FY25 results are a great send off for the departing CEO Rob Parker, with growth initiatives under the Mission 365 strategy, along with more favourable markets than the prior year, providing a good revenue recovery (+6.8% excluding CTD) and more significant profit growth (+46% growth excluding CTD) that is at the top end of expectations. Shareholders have also been rewarded with a c 21% increase in the dividend for the year.

Investors will be pleased the revenue growth was broad based across the group, with all brands increasing year on year, as were the improvements in gross margin. Trade customers continue to be the engine of growth, with over 14% revenue growth on an underlying basis, as the company’s many initiatives to modernise the trade digital experience have translated through to good growth in the number of trade customers and conversion. Other notable highlights include: Parkside has generated a profit for the first time, Pro Tiler Tools has seen an acceleration in sales during H2 as its capacity became unconstrained, and Tile Warehouse continues to grow well and now has an eye on moving into profit.

It will come as no surprise that revenue growth has slowed a little in the first nine weeks of the year, given the general nervousness and weak consumer confidence ahead of the UK Budget. However, it is worth bearing in mind the overall growth is compounding positive growth from the start of FY25 and is not against weak comparatives as it was through FY24. In the first nine weeks of the new financial year, group sales excluding CTD have increased by 3.3% and like-for-like sales for the Topps Tiles branded stores are 2%.

Along with the results, management has also announced the acquisition of the Fired Earth brand, IP, website and an estimated £2.5m of stock for what looks to be a low cost of £3m.

The results demonstrate the Mission 365 strategy is working and there is significant upside potential to profit if management continues to deliver on the strategy.