Topps Tiles Plc (LON:TPT) expects its full-year profit to be slightly ahead of market expectations following improved trading over the summer months, sending its shares soaring.
The tile retailer said on Wednesday that like-for-like sales had risen 1.2% in the 13 weeks to September 29. This contrasts with a 2.3% fall in underlying revenues in the previous quarter.
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On the back of this improvement in trading, Topps now expects adjusted pretax profits for the year to be slightly ahead of the top end of the current range of market expectations, which stands at between £14.6mln and £15.2mln.
The company said adjusted revenues for the year are expected to be in the region of £215mln, up from £211.8mln a year ago. Like-for-like revenues for the year were flat when compared to the prior year, it said.
"I am pleased to report an improvement in trading over the final quarter which has enabled the group to post a full year sales result which is slightly ahead of the top end of market expectations and which represents an outperformance of the overall tile market,” CEO Matthew Williams said in a statement.
“Our core Topps Tiles business is a well invested, cash generative market leader with a proven strategy and we continue to make good progress with our expansion into the commercial segment of the UK tile market which will be an important source of future growth for the group,” he added.
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The chain saw first-half profits slump a third, hit by a slower housing market. Looking ahead, it said the uncertainty in the UK economic outlook means it remains cautious and will be maintaining its focus on margins, tight cost control and strong underlying cash generation.
"There has been some bounce back in activity levels following the quieter summer period, although we keep a prudent view on outer years at this stage. Importantly, Topp's continues to demonstrate that it remains very well positioned to benefit when a more sustained market recovery takes hold," Liberum analysts said in a note to clients.
"The group's market leading proposition continues to resonate with consumers and there has been good progress in developing the longer-term opportunities within the UK commercial tile market," they added.
Shares in the company were 10.7% up at 69.43p in early trade.