In key news on UK stocks, Topps Tiles Plc (GB:TPT) shares declined after the company reported lower sales due to subdued demand in the first half of Fiscal 2024, which ended on March 30, 2024. The company’s sales declined 5.9% year-over-year to £122.6 million, as customers in Britain continue to restrict their spending due to macro pressures. TPT shares were down over 4% as of writing.
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Topps Tiles is one of the leading suppliers of tiles and related products in the UK domestic and commercial markets.
Topps Tiles’ Weak H1 FY24 Results
Topps Tiles’ sales in the first half of Fiscal 2024 were impacted by the weak demand in the domestic repair, maintenance, and improvement (RMI) sector, especially for big-ticket projects. The company witnessed a decline in store footfall, mainly in the homeowner customer group. Like-for-like sales fell 11.3% year-over-year in Q2 FY24, marking further deceleration compared to the 7% decline in the first quarter.
Despite improvement in Topps Tiles’ gross margin due to easing cost of goods pressures, the net profit in the first half was impacted by a decline in volumes and higher operating costs. The company expects FY24’s profits to be weighted towards the second half of the year.
On the positive side, the company’s Online Pure Play business continued to be strong and grew 38.3% in the first half. The online business saw momentum in the Pro Tiler and Tile Warehouse brands. Interestingly, Topps Tiles expects to complete the acquisition of the remaining 40% stake in Pro Tiler Limited soon.
While the first-half performance failed to impress investors, Topps Tiles believes that it is well-positioned to gain from a cyclical recovery in the RMI market. The company plans to unveil its new business plan at the interim results scheduled on May 21.
TPT stock has declined nearly 15% year-to-date.
