Topps Tiles interim profit drops amid 'challenging' market

In the 26 weeks to 1 April, statutory pre-tax profit fell to £9.5m from £10.1m as revenue declined to £106.6m from £108m the year before and like-for-like revenue was down 1.9% compared to a 4.7% gain. The interim dividend was lifted to 1.1p per share from 1.0p in 2016.

The company said it had put in "a solid performance in a more challenging market" and against strong comparatives from the previous year when sales benefited from changes to Stamp Duty.

Chief executive Matthew Williams said: "Our results for the first half reflect the more challenging macro-economic environment we have traded through so far in 2017 and the strong performance we delivered in the corresponding period in 2016 when housing transactions were boosted ahead of the changes to Stamp Duty. While these tougher comparatives begin to ease from the end of June, the key macro indicators for our market are weaker year-on-year and we are taking a prudent view of the second half prospects.

"Against this background, we remain confident in the longer term outlook for the business, as evidenced by the 10% increase in the interim dividend. We will continue to focus on executing our proven strategy of "Out-Specialising The Specialists" and to invest in important sources of future growth. In particular, our recently completed analysis of the UK commercial tile market has confirmed it as attractive and we are now evaluating a number of small acquisition opportunities to increase our reach into this part of the market."

Topps said trading so far in the second half has been more challenging, with LFL sales over the seven weeks to 20 May down 5.8% versus an 8.4% rise in 2016.

At 0930 BST, the shares were down 4.5% to 98.38p.