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15m placing as Topps Tiles profits crack

TILE and wood flooring retailer Topps Tiles yesterday reported a sharp 45 per cent dive in full-year profits and said it is set to raise &pound;15.4m from a share placing to bolster its balance sheet against a possible double-dip recession.<br /><br />The company, which trades from 321 stores, reported that its annual pre-tax profit to 26 September has slumped to &pound;16.3m, slightly better than analyst expectations.<br /><br />The group&rsquo;s shares fell in early morning trading to a low of 89.1p but closed down 1.06 per cent to 93.5p.<br /><br />Topps Tiles&rsquo; share placing of 17.1m shares at 90p is being handled by broker KBC Peel Hunt.<br /><br />Chief executive Matthew Williams said the cash call &ldquo;does give us that financial flexibility and an extra level of comfort should sales for whatever reason take a lurch down again&rdquo;.<br /><br />&ldquo;It also gives us the opportunity to get back on the front foot in terms of expansion, as and when we see opportunities arising in the property market&rdquo; he added.<br /><br />Group revenue fell 11 per cent to &pound;186m, and like last year no dividend is being paid to investors.<br /><br />But Williams said that current trading performance showed signs of stability was returning. <br /><br />Like-for-like sales increased 0.5 percent in the first seven weeks of its new financial year. UK sales were up 2.2 per cent in the seven weeks while the 12-store Dutch business was down 42 per cent. Williams said an exit from Holland was &ldquo;certainly possible&rdquo;.<br /><br />Investec analysts pointed to the UK trading lift and moved to a &ldquo;Buy&rdquo; recommendation on the group.<br /><br />FAST FACTS topps tiles<br /><br />&9679; Topps Tiles has been hit hard by the UK housing slump which has prompted customers to cut back or delay refurbishment plans.<br /><br />&9679; The group said profits fell 45 per cent in the year, but will raise &pound;45m to give it headroom.