Topps Tiles’ chief executive has warned that market conditions have weakened in recent months and consumer confidence is faltering.
Despite the difficult trading backdrop, Matt Williams, boss of the FTSE 250-listed tile group, said he was “confident” in the retailer’s ability to outperform the market and deliver solid growth.
He made the comments as the company revealed it was on course for another year of strong sales growth as it continued to win over both trade and retail customers.
The tiling chain’s like-for-like sales in the year to October 1 are expected to be up by 4.2pc on the previous year, while adjusted pre-tax profits should hit forecasts of between £22m and £22.7m.
The company made a number of important strategic decisions in the year, including exiting its lower margin wood flooring business and replacing it with a new range of extra large tiles, which are becoming increasingly de rigueur among consumers.
Ditching wood flooring dented sales growth somewhat in the final quarter, but Mr Williams said the effect of the lost revenue should tail off as sales from the new range of larger tiles build.
In total, more than 50 ranges were launched during the 12-month period, with sales from new product lines accounting for 12.8pc of total revenue.
Topps’ loyalty trade scheme continued to grow, with more than 40,000 traders now regularly participating. The company has also introduced a digital loyalty scheme to attract more consumers.
There were five stores opened in the final quarter, bringing the total estate to 351 shops, including 15 in the more upmarket boutique format.
Analysts at Liberum have downgraded their forecasts for Topps, citing lower consumer confidence and a weaker pound.