Topps Tiles struggles as sales slide

27th May 2009 07:18

Retailer Topps Tiles' profits slumped to barely above break-even in the half year to March as sales continued to slide.Pre-tax profits tumbled from £15.8m to £0.6m as overall revenue decreased by 13.4% to £92.1m compared with last year's £106.3m). Like-for-like revenues fell by 18.5%. Overall gross margin for the group was 59.4% compared to 62.7% last year. Within this the UK business gross margin was 60.4% compared with 63.2% last year. A tougher trading environment and the continued weakness of sterling which impacts the cost of imported goods hit margins, Topps said.The performance in Holland has also become increasingly challenging with an interim loss of £0.6m. This business is under close review.In the first seven weeks of the second half overall group revenues declined 9.6%. Like-for-like revenues across the group declined 11.9%.Topps added that based on current trading and the board's current expectations for the next 12 months it expects to operate within its current financial covenants. The primary assumption within these estimates is that the business can maintain sales at the current levels and this remains a key uncertainty, it added.There is no interim dividend.