Topps Tiles reports sluggish trading

The UK's biggest tile and flooring chain today warned of "subdued" trading so far this year amid little sign of a revival in consumer confidence.

The group expects like-for-like sales will be up 2.1% for the 27 weeks to April 2 - well below the 5.5% growth seen after 14 weeks of the first half.

Shares in the firm slid 8% as chief executive Matt Williams said: "The results across the first half of the year demonstrate that levels of consumer confidence remain unstable and trading patterns during the second quarter have been subdued."

Singer analyst Matthew McEachran estimated a 1.5% fall in comparative sales since the beginning of 2010, with the winter snow also hitting the business.

"Adjusting for the extreme weather over two weeks of January like-for-like sales have been broadly flat," he added.

Mr McEachran added that lower expected sales growth this year could wipe as much as £3 million from profit hopes, taking forecasts back to the £16.3 million posted by Topps last year.

The Leicester-based group is currently trading from 309 UK stores, after closing and opening three stores during the first half.

Topps is cautious over prospects for the economy and said it would maintain a "prudent approach" to store expansion this year.

The firm has however gained market share as rivals cut back on stores or close completely. Mr Williams added: "We have a resilient business model and we are satisfied with the performance of the group to date."

The group unveiled a £15.4 million fundraising move in November last year to help pay down debts and also pulled the plug on its loss-making Dutch business.

Topps opened its first specialist tile centre in Manchester in 1963.