Topps Tiles - Looking to the future
Topps Tiles’ (TPT’s) H124 results demonstrate the effects of the general market softness of spend on repairs, maintenance and improvement, as evidenced by other companies and external data. Of more importance is TPT’s updated strategy, which includes targeting new markets and further/better leverage of existing brands, and ‘medium-term’ financial goals, the most notable being an indicated more than quadrupling of adjusted PBT from our FY24 estimates. Management points to more encouraging forward indicators for customer spend (including mortgage approvals and consumer confidence), albeit current trading remains weak. With a prospective FY24 EV/sales multiple, excluding leases, of 0.25x, the shares look primed to provide strong returns when the market backdrop becomes more supportive, and if management delivers on its strategy (as it has previously) and new financial goals. Our forecasts are under review.Topps Tiles Plc is a United Kingdom-based retailer of tiles. The Company is engaged in the retail distribution of ceramic and porcelain tiles, natural stone, and related products. It operates in the Topps Tiles stores and online business segment. It supplies tiles and associated products to both trade and retail customer base, primarily for the refurbishment of the United Kingdom domestic housing. Its product categories include new products, bathroom wall tiles, kitchen wall tiles, mosaic tiles, kitchen floor tiles, bathroom floor tiles, ceramic tiles, porcelain tiles, underfloor heating, wet rooms, outdoor tiles, fireplace tiles and metro tiles. Its brands include Tile Adhesive, Tile Grout, Tile Preparations, Hardiebacker Board, Rubi Tools and Accessories, Warmup, and Homelux Tiles Trims. It offers tiles in various colors, such as beige tiles, black tiles, blue tiles, brown tiles, cream tiles and gold tiles. It has over 350 stores across the United Kingdom.
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