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Topps Tiles shares plummet on profit warning

By Holly Williams, PA Deputy City Editor

Retailer Topps Tiles has seen its stock market value plunge by a quarter after warning over profits as Britons rein in their spending on DIY.

The group said sales in its second quarter so far have not improved since a dismal end to 2019, when trading was impacted by general election uncertainty.

Like-for-like sales in the eight weeks to February 22 dropped 5.5%, following a 5.4% drop seen in the previous quarter.

It cautioned half-year profits were set to come in “significantly” below the previous year, which will impact full-year results.

It expects annual underlying pre-tax profits to be “materially” below market forecasts for between £13.5 million to £14.5 million.

The tiling chain is hoping for a pick up in the home improvement sector after recent positive house price surveys, though this is unlikely to come until later this year.

Rob Parker, chief executive of Topps Tiles, said: “Trading conditions in our second quarter have remained challenging, reflecting continued weakness in home improvement spending.”

He added: “While UK housing market indicators have shown an encouraging improvement in the period since the general election, these traditionally have a lagged impact on our trading and we would not expect to see any benefit from these until later into the second half – our performance during this period will be key to the outcome for the year as a whole.”

Topps saw shares take a battering in November when it first revealed the extent of the pre-election impact on trade.

Analysts at Liberum slashed their full-year profit forecast for Topps by around 50% on the back of the latest earnings alert and said they do not expect any improvement in the second half.

“Housing transactions showed a marked step-up in January, but whether this becomes a trend is, as yet, unknown,” they said.