Tile specialist Topps Tiles has been a beneficiary of the unprecedented demand for DIY products as group revenue rose 18.0% to £227.5m in the 53 weeks to 2 October 2021; its highest sales on record. That it achieved this during a period fraught with temporary store closures is a testament to its design-led products and strong omnichannel approach. Topps, as a result, has raised its guidance for adjusted profit before tax to £13.2–£14.0m for the year.
Retail like-for-like (l-f-l) sales were up 19.6% year-on-year (y-o-y) and 6.3% on a two-year basis thanks to high levels of pent-up demand in periods when its stores reopened following the national lockdowns. This is apparent in its quarterly breakdown where l-f-l sales jumped 12.9% on a two-year basis in its Q3 ending 26 June 2021, and 21.7% in its final quarter. Topps’ commercial business also performed well, with sales growing 14.7% to £8.6m y-o-y as key sectors such as leisure reopened in the latter part of the financial year.
Topps Tiles prepared for supply-chain issues early on by accumulating stock to avoid inventory issues that many retailers are now experiencing. However, like other retailers, Topps has fallen victim to higher shipping costs which have lowered gross margins on last year.
The tile specialist ended the period in a healthy financial position with £28m net cash and no debt. This will cushion the damage from any future supply-chain issues and help it reinvest in the business to achieve its goal of accounting for £1 in every £5 spent on tiles and associated products in the UK by 2025.