Topps Tiles (TPT) has been beefing up its presence in the commercial tile market, a sensible move, given that this represents nearly half of the UK’s overall tile market. And it’s one that appears to be paying off – with revenues “more than tripling” for its commercial ‘Parkside’ business during the six months to March 2019. The acquisition of Strata Tiles in April should add to Topps’ offering here.
True, Parkside endured a £1m trading loss. But this stemmed from an ongoing two-year investment programme. And, it follows that, on an adjusted basis – excluding Parkside, as well as non-recurring property provision movements – Topps’ numbers looked rather different. Group revenues edged down 0.5 per cent to £109m, largely reflecting a reduction in the average number of retail stores trading from 372 to 362. The gross margin increased from 60.5 per cent to 61.4 per cent, thanks to better scale and sourcing. In turn, adjusted pre-tax profits climbed 11.1 per cent to £8m.
Still, the consumer environment remains “challenging”. And while the main macro-indicators for Topps’ retail business – consumer confidence, house prices and housing transactions – were broadly stable in the respective period, it estimates that the UK tile market was in “modest decline”.
Broker Peel Hunt expects adjusted pre-tax profits of £15.9m and EPS of 6.6p for the year to September 2019, against £16m and 6.6p in FY2018.
| TOPPS TILES (TPT) | ||||
| ORD PRICE: | 73p | MARKET VALUE: | £ 143m | |
| TOUCH: | 73-75p | 12-MONTH HIGH: | 85p | LOW: 57p |
| DIVIDEND YIELD: | 4.7% | PE RATIO: | 17 | |
| NET ASSET VALUE: | 13p | NET DEBT: | 69% | |
| Half-year to 30 Mar | Turnover (£m) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
| 2018 | 111 | 6.4 | 2.7 | 1.1 |
| 2019 | 110 | 5.2 | 2.0 | 1.1 |
| % change | -0.2 | -19 | -24 | - |
| Ex-div: | 06 Jun | |||
| Payment: | 12 Jul | |||
