TIDMTPT
RNS Number : 7852B
Topps Tiles PLC
05 October 2022
5 October 2022
Topps Tiles Plc
Q4 Trading Update
A second record year for sales; full year profits towards upper
end of market expectations
Topps Tiles Plc (or the "Group"), the UK's leading tile
specialist, announces a trading update for the 52-week period ended
1 October 2022.
Group Summary
The Group has developed and diversified in recent years and now
operates across three business areas: our omni-channel Topps Tiles
brand is the clear market leader in the UK and offers specialist
product expertise and world-class customer service to trade and
homeowner customers; our Online Pure Play offer consists of Pro
Tiler Tools and Tile Warehouse; and, finally, our Parkside brand
works directly with architects, designers and contractors in the
commercial market.
Group sales in the 52-week period were approximately GBP247.3
million(1) , a second consecutive record year of turnover, with
year on year sales growth of 10.6% on a comparable 52-week basis(2)
. Group sales in the 13 weeks to 1 October were 4.3% higher year on
year(3) , with positive progress from all parts of the Group.
Summary of year-on-year sales Q4(3) FY(2)
growth
Topps Tiles (like-for-like
sales) (1.2)% +9.4%
------- -------
Online Pure Play (Pro Tiler
Tools and
Tile Warehouse - total sales)(4) +46.1% +34.3%
------- -------
Commercial (Parkside - total
sales) +39.9% +28.6%
------- -------
Group (total sales)(1) +4.3% +10.6%
------- -------
Topps Tiles brand
Topps Tiles continues to perform well against a very strong
comparative period last year. Like-for-like sales were 1.2% lower
than last year in the final quarter, with the underlying
like-for-like sales trend similar to that reported in the Q3
Trading Update. Like-for-like sales growth for the full year in
Topps Tiles was 9.4%.
Average weekly sales per store in Topps Tiles this year are 25%
higher than in the pre-pandemic period of FY19. Around half of this
growth is due to the transfer of sales from closed stores as we
successfully rationalised our store network and improved store
sales densities, with the remainder due to underlying sales growth,
including particular strength in trade sales.
Trade customers are key to the business's resilience and growth
as they provide repeat custom and high levels of customer lifetime
value, as well as a crucial link to our homeowner customers. Our
trade customer base has grown steadily over recent years, and has
continued to increase over the period:
FY15 FY19 FY22 Q4 FY22
Trade customers:
% of sales in the Topps
Tiles brand 50% 56% 59% 60%
----- ----- ----- --------
Online Pure Play - Pro Tiler Tools and Tile Warehouse
Pro Tiler Tools, acquired in March 2022(5) , is clearly focused
on trade customers and has continued its strong sales growth
trajectory since acquisition, with sales in the most recent quarter
up 43.0% year on year(6) . Pro Tiler Tools, alongside our newest
brand, Tile Warehouse, launched in May 2022, form an increasingly
strong Online Pure Play offer.
Commercial - Parkside
Parkside, which is focused on architects, designers and
contractors in the commercial market, continues to deliver good
levels of sales growth, with year-on-year revenue up 39.9%(3) in
the final quarter and 28.6%(2) in the year overall, significantly
outperforming the market. In the final quarter of the year, the
business has moved to breakeven levels of profitability and is
expected to deliver a positive contribution to the Group's
profitability from FY23 onwards.
Group Profit, Cash and Balance Sheet
Overall, the Group's adjusted profits for the year are expected
to be towards the upper end of market expectations(7) .
The Group has a positive net cash balance of approximately
GBP15.9 million at year end, with no borrowings. We are in the
final stages of renewing our GBP39.0 million Revolving Credit
Facility, which is currently committed until summer 2023. This will
be replaced with a new GBP30.0 million facility, which will be
committed until autumn 2025 with an option to extend for a further
two years. The new facility will contain a slightly favourable
margin structure compared to our existing facility and is expected
to complete shortly. This new facility demonstrates the support of
our banking partners and maintains our significant balance sheet
strength as we continue to invest in growth.
Rob Parker, CEO, said: "We are delighted to have delivered a
second successive year of record sales for the Group, with profits
expected to be towards the upper end of market expectations. All
parts of the Group contributed to this performance and are making
good strategic progress as we develop and diversify the
business.
"Our market leading omni-channel retail business, Topps Tiles,
has performed well against strong prior year comparatives and we
are continuing to grow our base of loyal trade customers. Our
expansion into the commercial market through our Parkside brand is
now generating in excess of GBP10 million of sales, and we expect
it to be profitable moving forwards. This year we have further
expanded our activities into online pure play through the
acquisition of Pro Tiler Tools and the creation of Tile Warehouse -
both of which present further opportunities for profitable
growth.
"The Group has worked hard to achieve a strong balance sheet
with positive net cash and this will serve us well as we move into
a period of macroeconomic volatility, leading to a more uncertain
environment for consumers. In this context, our 20% market share
goal of '1 in 5 by 2025' and our growth strategy to deliver this
will remain our primary focus, and we are confident that we will
deliver against them both."
(1) Before year end accounting adjustments including revenue
recognition and customer returns provisions. Includes sales from
Pro Tiler Tools in the period following acquisition only as per the
Group's consolidated accounts.
(2) Compared to a pro rated 52 week period last year - the last
financial year contained 53 weeks.
(3) Compared to a pro rated 13 week period last year - last
year's reported Q4 contained 14 weeks.
(4) Year on year growth for Pro Tiler Tools and Tile Warehouse
have been compared here to the relevant pre-acquisition period for
Pro Tiler Tools in 2021 to give a meaningful comparison.
(5) 60% of the share capital of Pro Tiler Limited was acquired
in March 2022, with options in place to acquire the remaining 40%
in March 2024.
(6) Year on year growth for Pro Tiler Tools (only) has been
compared here to the relevant pre-acquisition period for Pro Tiler
Tools in 2021 to give a meaningful comparison.
(7) Market expectations for adjusted profit before tax for the
52 week period ended 1 October 2022 are in the range GBP13.8
million to GBP15.4 million, with a consensus of GBP14.6
million.
For further information please contact:
Topps Tiles Plc
Rob Parker, CEO
Stephen Hopson, CFO 0116 282 8000
Citigate Dewe Rogerson
Kevin Smith
Ellen Wilton 020 7638 9571
Notes to editors
Topps Tiles Plc is the UK's largest specialist supplier of tiles
and associated products, targeting the UK domestic refurbishment
and commercial markets and serving homeowners, trade customers,
architects, designers and contractors from 304 nationwide Topps
Tiles stores, four commercial showrooms and six websites:
www.toppstiles.co.uk , www.parkside.co.uk , www.protilertools.co.uk
, www.northantstools.co.uk , www.premiumtiletrim.co.uk and
www.tilewarehouse.co.uk .
Since opening its first store in 1963, Topps has maintained a
simple operating philosophy -- inspiring customers with unrivalled
product choice and providing exceptional levels of customer
service. For further information on the Group, please visit
http://www.toppstilesplc.com/
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END
TSTUPGGCUUPPGMC
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