Brokers urge investors to buy Topps Tiles shares as sales grow
Topps Tiles posted like-for-like sales growth of 3.8 per cent for its third quarter today, as softer trading a year ago helped the retailer boost revenue.
Read more: Profits slip nearly 20 per cent at Topps Tiles
A 2.3 per cent drop in sales for the four weeks to the end of June last year pushed like-for-likes higher over the same period this year.
“While this is in part due to a softer trading period in the prior year we are encouraged that the successful execution of our strategy is delivering good trading results,” said chief executive Matthew Williams.
The quarterly growth beats a growth rate of just 0.2 per cent in the first half of the firm’s financial year, prompting Peel Hunt to issue a ‘buy’ rating to the firm’s stock.
The broker said today’s trading update “gives confidence in [Topps Tiles’] full year outcome”.
Liberum also issued a buy rating, with a target share price of 95p.
“This is an encouraging performance, particularly in what we think has been a tougher retail environment across June,” Liberum analysts said.
The broker raised its full-year profit forecasts by two per cent for the retailer.
“We remain confident of the group’s ability to capture long-term growth opportunities, including within the UK’s commercial tile sector, which has doubled its addressable UK market size,” it added.
Topps Tiles’ share price rose 1.5 per cent on the update to 68p.
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The retailer recorded £5.2m in profit before tax for the first half of the year, around 20 per cent lower than the same period the year before. Adjusted profit before tax rose 11 per cent to £8m.