Topps Tiles reports improvement in Q3 trading

Topps Tiles reported an improvement in third-quarter trading on Wednesday.

In the 13 weeks to 29 June, like-for-like sales at the tile specialist rose 3.8%. This was an improvement on the 2.3% drop seen in the same quarter last year and up from a 1.4% decline in the first quarter of this year and a 1.8% increase in Q2. First-half LFL growth was 0.2%.

Chief executive officer Matthew Williams said the business performed well. While he attributed the improvement in part to a softer trading period last year, he said the company is "encouraged" that the successful execution of its strategy is delivering good trading results.

Broker Liberum said this was an encouraging performance, particularly in what it believes to be a tougher retail environment across June. It "prudently" lifted its FY19-21 profit estimates by around 2%.

"We remain confident of the group’s ability to capture long-term growth opportunities, including within the UK’s commercial tile sector, which has doubled its addressable UK market size.

"The group’s quality metrics and balance sheet remain healthy. The shares currently trade on a CY19E price-to-earnings ratio of 10.4x and offer a dividend yield of circa 5%."

Liberum pointed out that while the results was supported by a soft prior year comparable, it was still an improvement on Q2, "which has a very similar comp".

At 1050 BST, the shares were up 1.7% at 68.16p.