Topps Tiles’ profit slides 78% as COVID-19 wreaks havoc on the construction industry

Topps Tiles’ profit slides 78% as COVID-19 wreaks havoc on the construction industry
Written by:
Wajeeh Khan
December 1, 2020
  • Topps Tiles’ profit slides 78% as COVID-19 wreaks havoc on the construction industry.
  • The retailer refrains from proposing a final dividend due to COVID-19 uncertainties.
  • The British company reports a 20% increase in its retail like-for-like revenue.

Topps Tiles plc (LON: TPT) said on Tuesday that it concluded the financial year in loss due to the ongoing Coronavirus pandemic that has so far infected more than 1.6 million people in the United Kingdom and caused over 58 thousand deaths. The company also forecast that its performance will remain under pressure in the upcoming months as the COVID-19 crisis continued to wreak havoc on the construction industry.

According to Topps Tiles:

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“During the most intense period of the UK lockdown during the third quarter, a number of our construction and refurbishment projects were postponed or started delayed or cancelled.”

Topps Tiles refrains from proposing a final dividend

The retailer reported £9.8 million of statutory loss in the year that concluded on 26th September. In comparison, it had posted £12.5 million of profit in the prior fiscal year. On an adjusted basis, Topps Tiles added, its profit came in 78% lower in the recent financial year to £3.6 million.

In other news from the UK, British tycoon Philip Green’s Arcadia fashion group collapsed into administration on Monday.

Topps Tiles refrained from proposing a final dividend on Tuesday citing COVID-19 uncertainties. But it expressed confidence that it will reinstate payments as soon as outlook gets clearer. In an earlier report published in late September, the British firm had warned of weaker commercial demand as it forecast a 12.5% decline in full-year revenue.

Topps Tiles reports a 20% increase in its retail like-for-like revenue

In the new fiscal year, Topps Tiles said that its retail comparable revenue in the first eight weeks registered a close to 20% increase. For 2025, the Leicester-based company has a target of accounting for £1 in every £5 that its customers in the UK spend on tiles and related products.

Topps Tiles shares opened roughly 5% down on Tuesday but regained the entire intraday loss in the next few hours. The British retailer is now exchanging hands at 56.80 pence per share after recovering from a year to date low of 25 pence per share in March. The price action should come in handy if you are interested in investing in the stock market.

Topps Tiles performed fairly upbeat in the stock market last year with an annual gain of more than 15%. At the time of writing, it is valued at £110 million and has a price to earnings ratio of 42.88.