Topps Tiles’ trading update for the 26 week period ended 27th March 2021 reveal that total revenues for the period were £103.6 million (2020: £106.2 million), with Retail like-for-like growth over the period of 2.0%.
As announced in Topps’ trading update in early January, retail like-for-like sales increased by 19.9% in the first 13 weeks of the current financial year, with good growth in sales across both professional fitters and homeowners.
The additional trading restrictions imposed during the current lockdown, including the closure of stores to Retail customers, significantly impacted sales and margins in the second quarter. Revenues from homeowners were particularly impacted, contributing to an overall reduction in like-for-like sales of 17.3% in the second quarter.
Trade sales are transacted at lower gross margins than sales to homeowners and there are additional costs associated with higher levels of delivery, so Topps is expecting second quarter gross margins to be lower than in the first quarter.
As trading restrictions lift by the middle of April, Topps expect a sharp increase in sales, with margins recovering to more normal levels. This view is underpinned by the Group's strong trading performance following the end of the first lock-down last summer.
Topps reports that within the Commercial sector, some market sectors have also been significantly affected by Covid-19, with particular impacts on the restaurants, bars, and leisure areas. As such, sales in the first half were down 10% year-on-year, which the company says represents a robust performance in difficult market. Forward indicators are positive, with orders increasing over the trading period.
Rob Parker, CEO, said: "Our revenues for the first half reflect a very strong first quarter followed by a period over the majority of the second quarter when sales, particularly to homeowners, were significantly impacted by the trading restrictions imposed on our stores during the third national lockdown. The Group adapted to the changed environment swiftly and effectively, producing a resilient performance in the circumstances.”
“We are looking forward to the lifting of lockdown restrictions in April and are concentrating on being well prepared for the return of all customers to our stores. We have a strong balance sheet, are debt-free, and are well positioned for growth this financial year as we move towards our goal of '1 in 5 by 2025'."
His final comment refers to Topps' goal of accounting for £1 in every £5 spent on tiles and associated products in the UK by 2025, thereby increasing its market share to 20% from approximately 17% at present.
The Group will announce its Half Year Results for the period on 18 May 2021.
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