Tiles retailer Topps Tiles (LON: TPT) is set to report on fourth quarter trading on 1 October.
Third quarter like-for-like sales growth was 3.8% with a particularly strong end to the quarter. The comparatives were weak and, because the fourth quarter comparatives are tougher, analysts ae assuming flat like-for-like figures.
If Topps can beat that fourth quarter expectation it would be good news for shareholders.
The commercial division continues to provide the growth potential. The progress will be keenly followed by analysts. The target is to generate 5% of group sales in 2020.
Analysts will want to know how well 80%-owned Strata Tiles, which was acquired earlier in 2019, has been integrated and whether the expected benefits are coming through.
This is an important step on the strategy of becoming a market leader in the commercial sector within five years.
Net debt could fall from £16.2m to below £13m at the end of September 2019. That leaves scope for further acquisitions of commercial tile businesses.
Full year pre-tax profit is likely to be slightly below last year’s figure of £16m. At 66.6p, the shares are trading on ten times earnings. An unchanged dividend represents a yield of just over 5%.
This is attractive given that commercial has strong growth prospects and it will limit the dependence on the retail market.