Topps Tiles outlook 'subdued' as sales dip 1.9%

Topps Tiles yesterday admitted it faced another quarter of "subdued" trading as the sluggish housing market and low consumer confidence continues to hit demand.

The floor coverings firm, which has 313 UK stores, said like-for-like sales declined by 1.9 per cent in the 13 weeks to 2 July, compared with a 1.2 per cent fall a year earlier.

Shares fell 3 per cent as Topps told investors that it did not expect any material change to trading conditions over the final quarter of its financial year.

Analysts have warned that low levels of housing transactions and consumer confidence remain a drag on short-term prospects, while DIY chains have stepped up their battle for market share.

Topps said: "The business will continue to focus on achieving the efficiencies necessary to drive improved gross margins, which will help to offset some of the impact of the challenging environment."

In June, the firm reported adjusted profits of 7.2 million for the 26 weeks to 2 April, against 7.8 m during the equivalent 27-week period a year earlier.

Analyst Mark Photiades of Singer Capital Markets called the latest Topps statement slightly disappointing. He expects the City's pre-tax profits forecast of 16.5m for the year to September to reduce by between 500,000 and 1m, with the sales shortfall not quite being offset by enhanced margin expectations.