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Highlights
- In H1FY24, Topps Tiles saw improvement in customer satisfaction to 92.5%, and gross profit margin to 53.9%
- The company is finalizing the acquisition of Pro Tiler at approximately 5 times EBITDA
- Management declared an interim dividend of GBX 1.2 per share, representing an annualized dividend yield of approximately 8.85% based on the stock’s closing price on 03 July, 2024
Topps Tiles PLC (LSE: TPT) is a retailer based in Leicestershire, UK. It specializes in tiles and related accessories. Topps Tiles is listed on the FTSE All-Share index. It has a market capitalization of GBP 79.81mn.
In H1 FY24, the company achieved a notable increase in customer satisfaction, rising to 92.5% from 91.3% in the prior corresponding period (pcp). Additionally, its gross profit margin saw a slight improvement, reaching 53.9% compared to 52.8% in the pcp. The company is set to complete Pro Tiler acquisition, at approximately 5 times EBITDA, with plans to retain its original founders.
Regarding dividends, management announced an interim dividend of GBX 1.2 per share, payable to shareholders on 12 July 2024. Based on the closing stock price as of 03 July 2024, this represents an annualized dividend yield of approximately 8.85%.
Further, the company had a higher gross margin of 53.9% and a higher asset turnover ratio of 0.72x in H1 FY24, compared to the industry median of 48.3% and 0.60x, respectively.
Recent business update
According to the company's Q3 FY24 trading update, total group sales declined by 6.9% year-on-year, with a cumulative decrease of 6.2% over the 39-week period compared to the previous year. Topps Tiles reported a 9.7% year-on-year decline in like-for-like sales for the third quarter, consistent with the 9.2% decrease in the first half, although sales stabilized throughout the quarter. Meanwhile, the Online Pure Play segment exhibited strong year-on-year sales growth, underscoring the group's ongoing market share gains.
Company outlook
As per the company, it is well-positioned to benefit from the cyclical upturn in the RMI (Repair, Maintenance, and Improvement) market, leveraging its strong brands, specialized expertise, and high-quality service. Supported by robust financial health and a strategic commitment to capturing market opportunities, it aims to enhance its competitive position as market conditions improve.
Top 10 Shareholders
The top 10 shareholders of TPT own approximately 63.91% of the total shares. MS Galleon AG holds the largest portion at around 29.78%, followed by Aberforth Partners LLP with about 14.69%, as shown in the chart:
Stock performance
Over the past three months, the stock price of TPT has decreased by approximately 6.38%, while it has seen a decline of about 20.32% over the last six months. The stock price has ranged between GBX 38.00 (52-week low) and GBX 57.80 (52-week high) over the last one year and is currently trading below the midpoint of this range.
Note 1: Past performance is not a reliable indicator of future performance.
Note 2: The reference data for all price data, currency, technical indicators, support, and resistance levels is 03 July 2024. The reference data in this report has been partly sourced from EODHD/Others.
