Topps suffers as home refurbs delayed
A stagnant housing market and drop in domestic purchasing power have been blamed for a rapid decline in profits and revenue at Leicestershire-based Topps Tiles. The company posted a fall of more than £4m in its year-end pre-tax profits.
Despite dropping from £12.4m to £7.9m in profit before tax, the company said it still believes there is room to expand Topps Tiles' portfolio by a further 79 stores.
Topps grew the number of outlets it operates from 312 to 320 over the year to 1 October. Chairman Michael Jack said he thought the company could extend to 400 over the next few years.
But as homeowners put renovation profits on a backburner, Topps' revenues slipped almost £7m over the year, from £182.4m to £175.5m. Net debt also grew to £50.9m, up £900,000 on its 2010 result.
The company's 2011 results comprised a 52-week period, while the previous year was the trading results of 53 weeks.
Matthew Williams, chief executive, said the company's focus had been on strengthening its market leading position.
"We further upgraded and expanded our store estate, continued the evolution of the Topps Tiles offer and supported this with new marketing initiatives in-store, on television and online," he said. "In addition, we made some significant infrastructure investments across the business which will benefit our future performance.
"Looking ahead, we expect economic conditions will remain difficult in 2012, with consumer budgets again under pressure. Our response will be to take further cost out of the business, grow margin and maximise sales opportunities, whilst making operational improvements that will position the business for future growth as economic conditions improve."
The company trades under the brands Topps Tiles and Tile Clearing House stores, which function as clearance units for the main business.
For the first seven weeks of the new financial year, Topps said group revenues, which are on a like-for-like basis, decreased by 6.9 per cent.
A final dividend of 0.6p per share was paid out at the year-end, compared with 1 pence per share at the end of 2010.
