Topps profits from buoyant market

Tile and flooring specialist Topps Tiles today said the home improvements market remained buoyant after forecasting annual profits ahead of market expectations.

The England-based chain said like-for-like sales growth during the 53 weeks to October 2 was likely to be more than 20% ahead of a year ago.

This outpaced the 5% growth rate for the tile and flooring market, putting it in line for pre-tax profits of £33.5m (€48.5m) for the period.

Topps has more than 200 stores in the UK after opening new outlets in locations such as York, Blackburn and Cambridge during the year.

Evolution Securities analyst Nick Bubb said today’s update made good reading and profits were ahead of the £31m (€44.9m) that he had previously forecast.

Despite signs of increasing competition in the sector from rivals Carpetright and Floor 2 Go, he said the fundamentals of the business remained strong.

According to Investec analyst Mark Charnock, the company’s sales were being driven by increased brand awareness.

A national TV advertising campaign was launched in the spring – sponsoring Carlton weather forecasts and appearing on GMTV and Sky’s UK Living.

This exposure should continue to benefit the company for at least another six months, Mr Charnock said.

“Topps is market leader in its field and is now driving home its scale benefits to consolidate its position,” he said.

“Space growth of over 10% per year in the next two years means healthy continued organic growth.”

Topps, which employs 1,300 staff, has also been boosted by the popularity of TV shows like Property Ladder and Changing Rooms.

Shares were up 1.5p at 180p today.