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Topps Tiles – after Q1 “an encouraging start”, what about Q2?

By Steve Moore | Wednesday 4 April 2018


Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from ShareProphets). I have no business relationship with any company whose stock is mentioned in this article.


In January Topps Tiles (TPT) stated “an encouraging start to the new financial year with like-for-like sales in Q1 up by 3.4%”. Today a further Trading Update

“Like-for-like revenues for the 26 week period increased by 0.6%”. Quite a second quarter reverse then. Indeed, the quarter was -2.2%, and this following -4.1% in the corresponding prior year quarter. It is added “while we estimate that short term weather factors in late February and March, and the timing of an earlier Easter, account for around 1.6% of the second quarter like-for-like sales reduction, it is also clear that that there has been a softening of the underlying market”.

The company seeks to mitigate “we believe that we have continued to outperform the market”, though this partly attributed to “continued strong promotional positioning” and it is “retaining a cautious view of market conditions for the remainder of the year”.

Broker to the company Liberum has reduced earnings and dividend forecasts by circa 8% for the current year and two following - now looking for 6.2p and 3.1p respectively for the current full-year. These compare to 7.6p and 3.4p delivered last year and 8.9p, 3.5p the year before that.

Together with net debt and the continued UK economic outlook (Liberum also admits “uncertainty remains: the outlook for the remainder of the year is subject to the UK's macro uncertainty and consumer fragility”), this looks to remain one to currently avoid.


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