Sparks - Topps Tiles

The key takeaways from Topps Tiles’ (TPT’s) H125 results are: 1) there is meaningful progress on the Mission 365 initiatives announced one year ago; 2) the company is back into revenue and profit growth, despite inflationary cost pressures, demonstrating its operational gearing; and 3) management is in the early stages of being able to manage CTD Tiles, which is much needed following a prolonged CMA review during which trading was relatively weak. The more encouraging trends in trading that were evident in H125 have continued into strong current trading in the first seven weeks of H225, with 9.5% y-o-y revenue growth at the group level.

TPT had already reported revenue in the pre-close trading update. Adjusted (ie excluding CTD Tiles) revenue increased by c 4%, gross profit by 3% (lower than revenue growth due to business mix changes), profit before tax by c 3% and EPS by c 9% as the Pro Tiler Tools non-controlling interest was removed.

The trading statement is encouraging. In the first seven weeks of H225 adjusted sales (ie excluding CTD Tiles) increased by 9.5%, with Topps Tiles’ like-for-like sales up 6.2% and accelerating growth in other areas. While the group total is against a relatively easy comparative of -7.3%, it represents the first positive two-year growth rate in this financial year.