Topps Tiles has slumped to an annual loss after taking a hit of around £16 million from coronavirus, but cheered rebounding sales thanks to a boom in DIY activity.
The group said the impact of the spring lockdown contributed to a £9.8 million pre-tax loss for the year to September 26, which compared with profits of £12.5 million the previous year.
On an underlying basis, it saw pre-tax profits slump 78% to £3.6 million.
Topps – which has 342 stores – said while like-for-like sales dropped 12.5% over the year, trading bounced back after the spring lockdown thanks to the recent surge in home improvement demand.
It saw like-for-like sales jump 16.5% in its final quarter and notched up a 19.6% hike in the eight weeks since its year-end.
“Following the period of lockdown, there has been a wave of domestic home improvement work, a rediscovery of the love of the home and in some cases, diversion of discretionary spend from other areas such as holidays into home improvement,” according to the group.
It said the commercial market remains “subdued”, though activity levels are starting to improve.
Topps has set itself a new market share goal to take £1 in every £5 spent on tiles and associated products in the UK by 2025, with aims to broaden its customer base.
Analysts said this will see it boost the group’s market share from around 17% to 20% within five years.
Rob Parker, chief executive of Topps, said: “In what has been a very challenging year, I am pleased with our response as a business, in the resilience we have shown and, in particular, the strong bounce-back in retail sales delivered since the initial national lockdown.”
Analyst Adam Tomlinson, at Liberum, said Topps’ five-year plan was “confident” and aimed to “return Topps back towards historic peak profit levels”.