Shares in Topps Tiles PLC (LSE:TPT) rose as it announced the £5.6mln majority acquisition of Pro Tiler along with a positive trading update.
Topps Tiles has acquired an initial 60% of the issued share capital of Pro Tiler, with the remaining 40% acquired from March 2024, with the remaining 40% fee to be based on a multiple of profits in the prior 12-month period.
Pro Tiler’s revenues last year were £9.3mln with profit before tax of £1.1mln. Pro Tiler said it expected to benefit from the group’s buying scale, flexible supply chain and financial resources.
Topps Tiles chief executive Rob Parker said the deal had brought the company closer to its 20% market share goal by 2025.
“Pro Tiler is a well-respected brand with a strong customer service ethic, which fits closely with our core values,” said Parker
“The acquisition of an online specialist supplier to trade customers complements our omni-channel Retail business and Commercial brands.”
The group release a trading update alongside the acquisition announcement, with sales in the second half of its 2022 financial year 18.2% above pre-pandemic levels.
Retail gross margins had also improved with costs well controlled despite “significant inflation” and operating cash flows, Topps Tiles said.
Topps Tiles continues to forecast profits in line with expectations when results are announced in May.
Shares in Topps Tiles were up 2.96% to 59.2p in early deals.