Topps Tiles today sets out how it is using digital to boost customer numbers, as it reports a full-year rise in sales but a decline in pre-tax profits.
During the year Topps Tiles, ranked Top100 in RXUK Top500 research, expanded its social media presence, launching on TikTok, while also selling for the first time on a marketplace – at very.co.uk, which it says has a “complementary” customer group to its own. All of this, says Topps Tiles in today’s full-year statement, means that it has high levels of online brand awareness and visibility. That’s important given that many purchasing journeys start online, and the retailer has also boosted page load speeds and added new payment methods.
Stores remain at the heart of its business, and over the year sales per store were 25.3% higher than in pre-pandemic 2019, while the retailer also has 15% fewer stores than it did that year. Some 60% of sales in the final quarter of this year were to trade customers.
The tile retailer says its store estate is now ‘right-sized’ as it cut store numbers by a net nine to 304 during the year. Since 2017 it has reduced its store numbers by 18% from 372, and says that during the year store closures have helped to offset the effects of inflation and of getting back to normal business rates following a year of Covid-related rates relief.
The update came as Topps Tiles today reported group revenues of £247.2m in the 52 weeks to October 2022. That’s 8.4% ahead of the previous year, the 53 weeks to October 2 2021.
At the top-line, adjusted pre-tax profits of £15.6m were ahead of the £15m reported last year. But at the bottom line pre-tax profits of £10.9m were 22.1% down on the previous year, following costs of £2.4m related to property write downs, £2.3m related to the return to normal business rates, and £2.3m related to the cost of setting up online-only Tile Warehouse and acquiring 60% of Pro Tiler Tools.
In the first eight weeks of the current year, like-for-like sales are 3.4% ahead of last year at its core Topps Tiles business, while other parts of the group are “performing in line with our expectations” – although the business acknowledges that “macroeconomic pressures remain from high inflation, low consumer confidence and weakening levels of disposable income”.
Rob Parker, chief executive of Topps Tiles, says: “We are pleased to have delivered a year of strong strategic progress, with record sales for a second year running and excellent delivery against our ‘1 in 5 by 2025’ market share goal. We are continuing to develop and diversify the group and further strengthening our position as the UK’s leading tile specialist.
“Within our Topps Tiles brand, where the majority of sales are being made to professional tradespeople, our focus on fewer more profitable stores and category extensions has driven sales per store up 25% since 2019. Parkside, our commercial brand, has delivered a record year of sales and now moved into profit. Pro Tiler Tools and Tile Warehouse have added a new, high growth, online-only sales channel to the group, leveraging our core strengths in product, service and scale.
“Looking forwards, we are mindful of the macroeconomic headwinds which will impact both UK consumers and businesses in the year ahead. Against this backdrop, our trading performance in the early weeks of the new financial year has been robust, with like-for-like sales growth in Topps Tiles over the first eight weeks of 3.4%.
“Our market share growth during 2022, combined with our clear strategy and strong balance sheet, give us confidence that we will continue to deliver growth and create value over the medium term.”
Topps Tiles aims to be carbon neutral across its scope 1 and 2 emissions by 2030 – five years ahead of the BRC target for retail. It says during the year, carbon emissions per store were 35.4% down on the previous year following a move to renewable electricity in 2022. It says its commercial division has become carbon-balanced during the year, with lower polluting vehicles, driver training and route planning software, while it has added EV chargers to its head office.