The UK’s largest tiles specialist Topps Tiles Plc (LON:TPT) saw tougher market conditions in its second quarter lead to a fall in first-half like-for-like sales.
In a trading update for the 26 weeks to 1 April 2017, the retailer said its like-for-like revenues decreased by 1.9% after a 4.1% drop in the second quarter, with first quarter sales up 0.3%.
At the same stage in 2016, Topps had reported first half like-for-like sales growth of 4.7% after 4.9% growth in the second quarter.
The group said its total first half revenues fell to £106.5mln, down from £108.0mln a year earlier.
Topps said: “Trading in the second quarter reflected softer market conditions and the Group is also reporting against a stronger period from the prior year when housing transactions accelerated ahead of the Stamp Duty changes in April 2016.”
But, it added: “Lower sales growth over the first half will primarily be offset by reduced operating expenditure. Based on an improving trend across the second quarter and a prudent view of the second half, management expectations for full year profits are within the current range of analyst forecasts.”
Matthew Williams, Chief Executive Officer, said: “While we are taking a prudent view on the outlook for the balance of 2017, an improving trend over the second quarter provides some encouragement. “
The firm said the current range of analyst expectations for underlying profit before tax for the year ended 30 September 2017 is £21.0mln to £22.3mln, with consensus at £21.8mln.
Shares down ...
In early trading, Topps shares shed 3.3%, or 3.25p to 94.00p.
In a note to clients, analysts at Liberum Capital said: “Good cost control and scope to reduce the variable elements, leaves management comfortable with the current full year consensus range, although there could be downside pressure to our top end numbers.
“While uncertainty remains for the H2 outlook, we believe Topps' leading, specialist market position means it is better placed than its competitors to weather any persistence in softer trading conditions.
“We expect the ongoing store roll-out and focused strategy to support long-term growth and market share gains.”
Liberum retained a ‘buy’ rating and 130p price target on Topps shares.
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