The tile market might be growing at a slower pace than last year, but Topps Tiles (TPT) is still taking market share. A report covering the tile industry by research provider MBD says growth in 2015 is likely to be 3.6 per cent, compared with the 5.5 per cent seen in 2014. This is reflected in the group's like-for-like sales: up 5.4 per cent for the year to 3 October, compared with 8.1 per cent the previous year. But the figures still suggest the company has achieved its target of taking £1 out of every £3 spent in the UK domestic tile market ahead of schedule. And, crucially, market share is not coming at the expense of margins, which rose 30 basis points to 61.2 per cent at the gross level.
Chief executive Matt Williams said the key driver of the year's performance was Topps' range of products. The company has "forged forward in terms of the differentiated and exclusive ranges" it has available, and he argues that this helped attract customers. Topps launches at least one product every week, and sales of new ranges in the past 12 months accounted for more than £12m - or 9.3 per cent of tile sales.
While the 'do it yourself' or DIY market continues to trundle on, the 'do it for me' trend is growing strongly. Management said trade sales now account for half of total revenue, helped by a loyalty programme launched last year that has attracted new trade customers and "increased the share of wallet" from existing ones.
Management continues to focus on its 'core' edge-of-town store format, as well as the new town-centre boutique format, at the expense of its clearance outlets. Many of these have already been converted to the more profitable core format, and of the remaining 11 four will be converted and seven closed. Eight boutique stores were added in the period, including the first two outside London, taking the total to 13.
House broker Peel Hunt expects pre-tax profit of £21.9m in the 2015-16 financial year, leading to EPS of 8.8p, compared with £20.4m and 8.5p in FY2015.
| TOPPS TILES (TPT) | ||||
|---|---|---|---|---|
| ORD PRICE: | 163p | MARKET VALUE: | £316m | |
| TOUCH: | 162.8p-163.3p | 12-MONTH HIGH: | 171p | LOW: 112p |
| DIVIDEND YIELD: | 1.8% | PE RATIO: | 24 | |
| NET ASSET VALUE: | 5.6p | NET DEBT: | 260% | |
| Year to 3 Oct | Turnover (£m) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
|---|---|---|---|---|
| 2011 | 176 | 7.9 | 3.0 | 1.00 |
| 2012 | 178 | 12.5 | 5.1 | 1.25 |
| 2013 | 178 | 10.6 | 4.8 | 1.50 |
| 2014 | 195 | 16.7 | 6.5 | 2.25 |
| 2015* | 212 | 17.0 | 6.8 | 3.00 |
| % change | +9 | +2 | +4 | +33 |
Ex-div: 7 Jan Payment: 4 Feb *53-week period | ||||
