Topps retail growth

topps tiles

Tiles retailer Topps Tiles (LON: TPT) is reporting its full year figures on Tuesday 1 December. Although a loss is expected for the year to September 2020, trading trends have been positive in recent months and there should be news concerning the effect of the recent lockdown.


Sales to the trade are growing, but nowhere near as fast as the retail market. There should be indications about whether these trends are continuing.

Household goods spending increased by 3% in September and the seasonally adjusted index reached a new high of 110.9. That is 15% higher than one year earlier. The rate of growth has not been this fast since 2001.

The official statistics are always going to be slightly behind the trading statements – especially when Topps has updated the market so regularly. The statistics are not required to understand that the DIY market is growing rapidly.

Topps’ fourth quarter sales were 16.5% ahead and the total revenues for the year are expected to be more than £190m. There is likely to be a small full year loss. However, there would probably have been a small profit prior to the IFRS16 accounting changes for leases.

The strength of the balance sheet will be demonstrated by the announcement. Excluding leases, there should be net cash.

Current trading

There will be news of first quarter trading and it is expected that sales will be 8% ahead so far during the period. The rate of growth is expected to be higher earlier in the quarter. Peel Hunt is assuming flat revenues in the second quarter, although that could change.

At 56p, the share price is double the level it was eight months ago, but it is below the subsequent high. Profit should bounce back in 2021, but it may not reach previous levels.