TOPPS said yesterday that muted consumer spending and a sluggish housing market in the UK hurt revenue in the first half of the financial year, sending the company’s shares down four per cent.
“It doesn’t seem to me housing transactions will fall below current levels,” chief executive Matthew Williams said. He said the company was in the fourth year of all-time lows with 800,000 housing transactions per year, compared with 2006 when transactions peaked at 1.7m.
The tiles and flooring retailer, which operates 319 stores, said revenue for the 26 weeks to 31 March is expected to fall 2.5 per cent to £86.9m.
Like-for-like sales in the first quarter of 2012 is predicted to have decreased 4.5 per cent compared with a 1.8 per cent increase a year ago while adjusted sales for the second quarter are expected to fall by four per cent.
Despite the drop in sales, Topps said it continued to boost its market share to 26 per cent and expects to end the financial year with 325, in line with previous guidance.
Analysts at Peel Hunt said Topps remains one of the leading potential recovery stocks in the sector. However, other analysts are more wary, voicing concerns that other retailers improving their home offers could start to provide tougher competition for Topps.
City A.M. Reporter