(Reuters) -British tile retailer Topps Tiles posted a 10.1% increase in third-quarter adjusted sales on Wednesday on strong demand from builders and contractors and signs of recovery from homeowners.
UK's Topps Tiles posts 10% rise in quarterly sales; shares soar
(Reuters) -British tile retailer Topps Tiles posted a boost in third-quarter adjusted sales on Wednesday, supported by strong demand from builders and contractors and signs of recovery from homeowners, sending its shares 9% higher.
The company, which has over 300 stores across the UK and sells its products to homebuilders and homeowners, posted a 10.1% increase in third-quarter adjusted sales, compared to a 4.1% growth in the first half.
"Topps Group looks to be in great shape, in our view, with a widening footprint across domestic tiles (Trade and Retail), Online and Commercial, with market share being driven by self-help initiatives as well as acquisition," Peel Hunt analysts said in a note.
Last week, the company named former BP executive Alex Jensen as its CEO at a time when it is refining its strategy to focus on its online business amid shareholder concerns about long-term margin erosion.
Topps Tiles now expects group adjusted gross margin in the second half to be slightly higher than in the first half of the year.
The company also expects operating costs for the second half to grow at a lower rate than gross profits.
Britain's competition regulator approved Topps Tiles' 9 million pound ($12.3 million) acquisition of CTD Tiles in April, after the tile retailer agreed to divest four of its stores which raised competition concerns.
The company said it expects the CTD Tiles business to be at least breakeven by the fourth quarter.
($1 = 0.7292 pounds)
(Reporting by Unnamalai L in Bengaluru; Editing by Nivedita Bhattacharjee and Mrigank Dhaniwala)
