LONDON: Householders are increasingly turning to contractors to do their tiling for them, boosting half-year profits at Topps Tiles (LON:TPT).
Topps said a growing “do it for me” trend had lifted its trade sales to 48.3% of the group total from 44% a year ago, also driven by the extension of a successful trade loyalty scheme.
It fuelled a 7.9% rise in group adjusted operating profit to £9.6mln in the 26 weeks to March 28, while adjusted pre-tax profit increased 13.8% to £9.1mln on a 6.4% gain in revenue to £104mln.
However, growth in like-for-like sales almost halved to 5.3% from 10.2% in the same period a year ago, when trading got a particular boost as people began improving their homes after the economic downturn.
Operating costs rose to £53.1mln from £50.6mln a year ago driven by eight more stores, inflation, higher volumes and a £700,000 rise in a staff profit-share scheme.
Like-for-like sales in the six weeks to May 9 increased 5.1%. The company increased its interim dividend by 15.4% to 0.75p.
Chief executive Matthew Williams said he believed Topps had done better than the UK domestic tile market as a whole.
“We’re well-positioned to grow our market share,” he said.
Shares in Topps rose 8p or 6.6% to 128.5p. Liberum Capital said Topps’ first half underlying pre-tax profit of £9.1mln beat the broker’s forecast of £9mln.
Liberum analysts said: “We see a buoyant market for Topps with any pre-election caution from consumers likely to be firmly in the past.
“We believe the company should benefit from rising consumer confidence fuelled by real wage growth and a potential pensions draw-down.”
Retail analyst Nick Bubb said the results were much as expected, but he highlighted the increase in trade sales. He added: “Current trading is still good.”
