Posted 27th Nov 2018

Topps Tiles issues Brexit warning as profits drop

27th November 2018 - 11:03am
money matters, topps tiles, brexit, revenue, profit, financial, report, kbb, kbbdaily

Topps Tiles has issued a warning about how Brexit may affect the UK tile market next year, after its pre-tax profits dropped by 25.3% on a year-on-year basis for the 52 weeks ending on 29th September 2018 – declining from £17m to £12.7m.

The company said Brexit could have a “number of implications” including disruption to the flow of imported goods resulting in supply issues, a reduction in consumer confidence, and a “reduced labour pool”. Topps Tiles said its primary focus ahead of March 2019 – when the UK is set to leave the EU – will be increasing stock levels of its “key selling lines”.

The group reported a 2.4% year-on-year rise in group revenue, reaching £216.9m. Adjusted pre-tax profit fell by £2.6m to reach £16m in the period, which Topps Tiles attributed to additional costs from new stores and “inflationary pressures”. The company added that in the first eight weeks of the new financial year, group revenues declined by 1.9% on a like-for-like basis.

“This has been an important year of strategic progress for the Topps Tiles Group, in which our expansion into commercial has seen us double our addressable market while remaining firmly within our tile specialism, where our buying scale and expertise gives us a significant competitive advantage,” said CEO Matthew Williams.

“Against a challenging market backdrop, the group delivered a robust trading performance for the year with flat like-for-like sales and market-leading gross margins in retail, and the foundations laid for significant sales growth in commercial in the year ahead.”

He added: “At the start of the new financial year, trading conditions remain challenging and like-for-like sales in the first eight weeks have been negative against a strong prior year comparator. Whilst retaining a cautious view on the outlook, we remain confident that our expansion into the commercial tile market, coupled with our market-leading retail operation, gives us a solid platform for future growth.”

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