On Wednesday, tiles retailer Topps Tiles (LON: TPT) will give investors some indication about how well demand is recovering following the reopening of stores. Topps is on course for a significant loss in the year to September 2020, but the third quarter trading statement will help to estimate how large the loss could be.

Topps closed all its sites at the beginning of lockdown and started to reopen them from 22 April. Initially, there was a click and collect service. Controlled customer entry has subsequently commenced.

The third quarter figures are likely to represent the low point of the year. Revenues may have declined by three-fifths.

The revenue run-rate at the end of the period will have more significance for the underlying strength of the business.


Spending on the home appears to be recovering significantly, particularly for the likes of Dunelm. This is a good sign for Topps. It may take longer for tiles sales to build up, though.

They may be indications about whether commercial and domestic markets are recovering at different rates.

Peel Hunt currently forecasts a full year loss of £12m, compared with a £16m profit last year. That assumes a halving of second half retail sales, although store re-openings have been faster than assumed.

Topps has debt but the balance sheet is relatively strong. The sale and leaseback of head office and warehouses raised £18.1m, compared to a valuation of £14m, has reduced net debt to around £7m.

Earlier this month, the chief executive bought 50,000 shares at 41.9p each. The current share price is 43p. There is plenty of recovery potential, but it may take time to show through.