Topps Tiles has issued a profit warning and does not expect to pay a dividend this year as it closes stores amid the coronavirus outbreak.
The tile specialist said the pandemic will result in a “material reduction” to expectations for revenue and profit and is not expecting to pay an interim dividend this financial year.
Read more: 130 profit warnings triggered by COVID-19
Topps Tiles said like-for-like sales in its retail business for the 12 weeks to 21 March were down 3.1 per cent.
In a bid to shore up its financial position, Topps Tiles has drawn down its £39m revolving credit facility and the group has approximately £20m of cash liquidity available.
The group expects total net debt at the half year end on 28 March to be approximately £19m.
Topps Tiles stores are closed but its online business remains in operation following the Prime Minister’s decision to tighten social distancing restrictions to prevent the spread of Covid-19.
In the event of a 12 week closure of retail premises, followed by a further quarter of materially reduced sales, the tile company said its cash reserves will “provide it with good levels of liquidity for the remainder of the current financial year.”
The firm welcomed the Chancellor’s emergency measures for business amid the outbreak, particularly the cessation of business rates. Topps also said it would utilise the job retention scheme to furlough colleagues who are unable to work due to store closures. It said the move will benefit cashflow by at least £2m per month.
Topps Tiles joins a host of other retailers suspending dividends and issuing profit warnings as footfall drops amid the coronavirus crisis.
Yesterday, Halfords suspended its dividend after forecasting a 25 per cent drop in sales following the government’s tightening of restrictions.
Shares in Topps Tiles are up more than 12 per cent.