Topps Tiles share price up on record sales of £130m despite inflation throwing wrench into profits
Shares in Topps Tiles soared 4.57 per cent this morning as the retailer reported “record” earnings in the first half of the year, crediting a cooling of high inflation and recruitment woes.
The London-listed business said sales were up 9.3 per cent year on year to £130.3m, and group gross profit grew 2.7 per cent to £68.7m as the business reaped the benefits of its online store.
However, the Manchester retailer told investors that adjusted profit before tax was down 38.0 per cent, following “adverse” exchange rate movements and the impact of inflation on expenses.
“As expected, our first half profitability reflects the impact of inflation year on year, including significantly increased energy costs, and a number of other one offs,” Rob Parker, chief executive at Topps Tiles, said.
“These effects are now reducing or will reverse in full in the second half, underpinning our confidence in a much stronger profit performance in the balance of the year,” he added.
Nonetheless, the group, which has over 300 stores across the UK, said adjusted net cash was up £19.9m compared to £13.4m in the same period last year.
Sarah Riding, retail partner at Gowling WLG, said: “Although economic challenges have thrown a wrench into the company’s strategy, it has successfully navigated through this period as supply chain pressures have started to ease and cost price rises are plateauing.
“What’s more, it’s introduced instant bank transfers both online and in-store, making them the first major UK retailer to offer open banking as an in-store payment option.”
She added: “This supports the company’s growth strategy and omnichannel approach by maximising revenue through easier payment options for customers, while the acquisition of two online tile businesses in 2022, both online has reinforced its digital presence.”