Topps Tiles PLC (LSE:TPT) said it expects "modest" profit growth this year after reporting a 31% decline in first-half income despite outperforming a weak home-improvement market.
The tile specialist reported adjusted pre-tax profit of £2.2 million for the six months to 28 March, down from £3.2 million a year earlier.
It said profits were flat on a like-for-like basis after adjusting for the inclusion of CTD, the tile distributor it acquired last year.
Revenue rose 11.6% to £142.6 million, driven by the addition of CTD sales.
Topps said trade customers now account for almost three-quarters of group revenue, while online sales increased to about 21% of turnover from 18% a year earlier. Pro Tiler, its online-focused trade business, grew about 20% year-on-year.
The group said gross margins improved on a comparable basis as it cut costs and reduced complexity across the business.
CTD losses narrowed and the business is expected to become profitable in the second half.
Chief executive Alex Jensen said the company continued to outperform the market despite “weaker consumer sentiment, geopolitical uncertainty and the cumulative impact of cost inflation”.
Topps said trading had improved at the start of the second half, with like-for-like sales returning to growth, up 0.6% compared to the 2% fall in the second quarter.
An interim dividend of 1p was declared, up 25% compared to a year ago.