News Column

Topps Tiles Tops Up By Dividend 30% As Interim Profit, Sales Rise

May 20, 2014

Rowena Harris-Doughty

LONDON (Alliance News) - UK retailer Topps Tiles PLC Tuesday reported a higher profit for the first half of the year, driven by a 12% increase in sales, and raised its interim dividend by 30%.

The group reported a pretax profit of GBP8.0 million for the 26 weeks to March 29, up from GBP4.7 million a year earlier, driven by a 12% increase in revenue to GBP97.7 million from GBP87.4 million. Like-for-like revenues increased 10%, which Topps said reflect it strategic focus on market share gains and strong levels of consumer confidence.

Its gross margin increased marginally to 60.8%, up from 59.8%, supported by further supply chain efficiencies and tighter management of its costs base, including direct sourcing and new product development.

"We believe our first half sales growth was significantly ahead of the overall tile market," said Chief Executive Matthew Williams in a statement.

Topps Tiles said that current trading is good, with like-for-like sales in the seven weeks to May 17 up 5.6%, compared with a 2.6% decline last year in the same eight-week period.

"We have made a good start to the second half with a healthy level of sales growth in the initial seven weeks of the period...and remain confident that our strategy will continue to deliver profitable market share gains, against a backdrop of a steady improvement in UK economic indicators," Williams added.

Signalling its confidence, Topps Tiles raised its interim dividend by 30% to 0.65 pence, up from 0.50 pence per share.

The group said it has seen encouraging results so far from the trial of a new smaller format of "Topps Tiles Boutique" stores. It said it will continue the trials in the second half of the year, and will open two more stores in and around the M25 motorway.

The group has also continued to increase its store portfolio, and has continued with its store refit programme. During the period, the group spent GBP3.4 million in capital expenditure, excluding freehold acquisitions, compared with only GBP1.9 million last year.

Topps Tiles shares were up 2.5% at 123.00 pence Tuesday morning.

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Source: Alliance News