London, England, April 4, 2006--Ceramic tile and wood-flooring specialist Topps Tiles Plc said on Tuesday like-for-like sales in the 26 weeks to April 1 had fallen 4.2 percent but it had seen a rise in recent weeks.
"I don't think there are any more consumers out there spending, we've just built up the market (share)," Chief Executive Nick Ounstead told Reuters.
Topps Tiles said pretax profit for the 26 weeks would be in the region of 19.5 million pounds, compared with 20.03 million the year before, due to a tough trading environment, on revenue of 88.5 million pounds.
"Like-for-likes went negative in March 2005 for the first time (down 1 percent) so it is encouraging to see the company post small positive numbers against this weak comparison," analysts at Bridgewell said while maintaining a 'buy' rating.
Shares in Topps Tiles were down 0.7 percent to 219-1/2 pence shortly after the opening. They closed at 221 pence on Monday after hitting a year-high of 230-3/4 pence on Friday, valuing the group at around 501 million pounds.
The group said in the last five weeks like-for-like sales had been encouraging, rising 0.9 percent.
Topps Tiles said it had a target of opening 24 new stores in the full year, which Ounstead said they have had for the last four or five years, and had opened 14 in the 26 weeks to April 1.
"Topps Tiles is an attractive roll-out story. There are currently under 250 stores and we see scope for over 400 stores in the UK," analysts at Numis said.
Ounstead said he was pleased with the performance of the new stores and that the group would carry on with its planned opening of 24 each year, while also reducing costs.
"We are pretty lean anyway, we are pretty tight on staff but like any business we are looking to take costs out. But where we can we are re-sourcing," Ounstead said.
Ounstead said the group was looking to cut costs by sourcing more of its stock from China as opposed to Spain, Italy and Turkey as they do now.
"A small amount of our purchases (come from China) at the moment, but it's growing. It's going to be significant in the next two or three years," Ounstead said.
The group is expected to post results for the 26 weeks to April 1 on May 23.
