Retailer Topps Tiles has seen annual profits tumble by more than a third and warned over weaker recent trading amid a housing market slowdown and consumer spending woes.
The tile chain reported a 38 per cent plunge in pre-tax profits to £6.8 million for the year to September 30 as soaring costs offset a 6.3 per cent rise in group revenues.
Its main Topps Tiles brand saw comparable store sales lift 3.1 per cent over the year.
The group cautioned over a “weakening of discretionary consumer spending” that is impacting trading so far in its new financial year, with like-for-like Topps Tiles sales down 6.1% in the first eight weeks.
Overall group sales are three per cent lower in the two months, it added.
Topps said: “Trading in the early weeks of the new financial year has reflected the well-documented challenges to discretionary consumer spending, especially RMI (renovation, maintenance and improvement), including higher interest rates and prolonged high inflation, falling house prices and lower housing transactions.
“In particular, since the end of the summer, the market has been subdued, with a softer build into the usual seasonal peak trading period, as noted in a variety of corporate and macroeconomic reporting.”
The group’s annual results showed the impact of soaring costs on its bottom line, though it said these pressures “began to abate” in the second half.
It has been trimming its store estate and driving savings across the business to help offset cost increases.
Rob Parker, chief executive of Topps Tiles, said: “As we enter our new financial year, it is clear that there has been a weakening of discretionary consumer spending.
“The business is well positioned to deal with this period, our established brands are market leading, we are competitively advantaged and we are confident that we will continue to take market share.”
Press Association – Holly Williams