Topps Tiles PLC (LON:TPT) has said it expects sales to be hit during the new coronavirus (COVID-19) lockdown, while trading margins will be under pressure due to the extra costs of delivering online orders.
Tiles and associated products are building materials so can continue to be sold under the building supplies exemption, but the group’s stores will have to remain closed for browsing, so customers can only access the trade counter or buy online.
As of December 26, 2020, Topps had adjusted net cash of GBP28.5mln after repaying GBP5mln loaned by the government, so now the group is debt-free.
In the 13 weeks to December 26, 2020, the first quarter of the current financial year, retail sales increased by 20% with good growth in sales across both of its main customer groups, professional fitters and homeowners.
The tiles retailer said that its commercial clients are seeing a slower recovery compared to the repair, maintenance & improvement market, although the performance in commercial is in line with its plans and it remains committed to becoming a market leader over the medium term.
“The group is much better placed compared to last spring, helped by its high trade customer mix (who browse less), online strength, ‘COVID-ready’ operations and net cash position with around GBP60mln of liquidity headroom,” analysts at house broker Liberum noted.
Shares dipped 2% to 56p on Wednesday at the opening bell.
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