Ceramic tile and wood flooring company Topps Tiles said on Tuesday it expected slightly lower underlying profit and sales for the year ended September, but that it had seen some improvement in recent weeks.
Although the market remains challenging, the company has seen an improvement over the last 5 weeks with overall sales increasing by 9.0 percent and like for like sales increasing by 1.9 percent, the company said in a statement.
It said profit before tax was expected to be in the region of 39.0 million pounds after exceptional costs of approximately 1.1 million pounds in the 52 weeks to end September, versus 39.2 million the previous year.
Like for like sales were expected to be 1.8 percent below the same period last year, with overall sales seen up 4 percent at 180.2 million pounds, it said.
Things are still pretty tough out there and consumers are still careful spending money, Chief Executive Nick Ounstead told Reuters, adding the increase in sales over the past few weeks was mainly because of low comparison figures a year ago.
Ounstead said Topps Tiles would continue to open new stores, despite growing competition from DIY retailers such as B&Q increasingly focussing on ceramic products.
All I can say really is our market share is growing ... I know there's been talk about DIY retailers muscling in. But I think it's still quite difficult for them really to achieve the ranges and services (that we offer). So our policy is still to open up near them.
Our target is a minimum of 400 (stores in the UK) in four or five years. But that's a minimum target.
Topps Tiles, which runs 271 stores in the UK, said it had acquired the remaining 50 percent stake of a 50/50 joint venture in the Netherlands and planned to add a minimum of 5 new stores each financial year to its current 15 stores in Holland.
Shares in the company, which have outperformed its UK peers by 6 percent over the past six months, were down 0.7 percent at 259 pence by 08:17 GMT (9:17 a.m. British time), valuing it at around 442 million pounds.
A return to positive trading is welcome, albeit the revenue performance was a little below our own forecast...We remain buyers of the stock...there is still plenty of scope for physical expansion and the tile market has excellent long term growth characteristics, Paul Deacon, a Bridgewell Securities analyst, said.