Sparks - Topps Tiles

Topps Tiles’ H125 trading update indicates improving volume and revenue trends through Q225, with an exit rate of high-single-digit revenue growth in March 2025. There is a clear message that the Mission 365 initiatives to grow revenue (category extension, greater trade and digital sales) are coming through against a subdued backdrop for the homeowner. In addition to good revenue growth, there is positive news on gross margin, helped by pricing, mix and discount structures to counter the dilution from growing trade sales. Our FY25 forecasts require the good growth seen in March to continue through the rest of the year against weak comparatives.

Group revenue excluding the contribution from CTD Tiles increased by 4% y-o-y to £127.7m (H124: £122.8m). Underlying revenue growth improved from +3.3% in Q125 to 4.4% in Q4 to give an increase for H125 of 3.9%, weighted toward the end of the period following a weak start in January 2025, consistent with trends we have seen with a number of companies.

The group numbers include continued strong growth for Pro Tiler Tools and Tile Warehouse as well as 3% like-for-like growth in the Topps Tiles brand, which was driven by 12% growth in trade sales and 15% through digital channels.

With respect to profitability, management reiterates the significant H2 weighting of profits in FY25 given the phasing of revenue growth (new initiatives) and costs (typical higher energy usage in H125) as well as investment.