That shares in Topps Tiles (TPT) outperformed the market on the day of its half-year figures had little to do with the retailer's first-half performance. Yes, the gross margin rose by 80 basis points, while adjusted operating profit rose 14 per cent to £10.9m, but it was the growth rate reported since the period-end that got the market excited. Like-for-like sales over the seven weeks to 21 May 2016 are tracking ahead by 8.4 per cent, comfortably beating last year's comparative rate of 6.3 per cent, albeit flattered by the timing of an early Easter.
Chief executive Matthew Williams puts the comparable sales result down to "good execution" of the group's strategy to broaden its appeal through an improved product range, a refurbished store estate and better customer service. The margin improvement was helped by better direct sourcing and a leaner, more integrated supply chain. This is helping to offset an increasing proportion of lower-margin trade customers.
Given the small outperformance on first-half numbers, and good momentum in the second, broker Peel Hunt has upped pre-tax profit forecasts for the year ending September 2016 by 4 per cent to £22.7m. That equates to EPS of 9.3p, compared with £20.4m and 8.5p in FY2015.
| TOPPS TILES (TPT) | ||||
|---|---|---|---|---|
| ORD PRICE: | 137p | MARKET VALUE: | £266m | |
| TOUCH: | 135.5-137p | 12-MONTH HIGH: | 171p | LOW: 128p |
| DIVIDEND YIELD: | 2.4% | PE RATIO: | 19 | |
| NET ASSET VALUE: | 6.6p | NET DEBT: | 220% | |
| Half-year to 2 Apr | Turnover (£m) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
|---|---|---|---|---|
| 2015 | 104 | 9.1 | 3.7 | 0.8 |
| 2016 | 108 | 10.1 | 4.2 | 1.0 |
| % change | +4 | +10 | +14 | +33 |
Ex-div: 9 Jun Payment: 15 Jul | ||||
