15m placing as Topps Tiles profits crack
TILE and wood flooring retailer Topps Tiles yesterday reported a sharp 45 per cent dive in full-year profits and said it is set to raise £15.4m from a share placing to bolster its balance sheet against a possible double-dip recession.
The company, which trades from 321 stores, reported that its annual pre-tax profit to 26 September has slumped to £16.3m, slightly better than analyst expectations.
The group’s shares fell in early morning trading to a low of 89.1p but closed down 1.06 per cent to 93.5p.
Topps Tiles’ share placing of 17.1m shares at 90p is being handled by broker KBC Peel Hunt.
Chief executive Matthew Williams said the cash call “does give us that financial flexibility and an extra level of comfort should sales for whatever reason take a lurch down again”.
“It also gives us the opportunity to get back on the front foot in terms of expansion, as and when we see opportunities arising in the property market” he added.
Group revenue fell 11 per cent to £186m, and like last year no dividend is being paid to investors.
But Williams said that current trading performance showed signs of stability was returning.
Like-for-like sales increased 0.5 percent in the first seven weeks of its new financial year. UK sales were up 2.2 per cent in the seven weeks while the 12-store Dutch business was down 42 per cent. Williams said an exit from Holland was “certainly possible”.
Investec analysts pointed to the UK trading lift and moved to a “Buy” recommendation on the group.
FAST FACTS topps tiles
&9679; Topps Tiles has been hit hard by the UK housing slump which has prompted customers to cut back or delay refurbishment plans.
&9679; The group said profits fell 45 per cent in the year, but will raise £45m to give it headroom.