Topps Tiles has reported a 36% slump in pre-tax profits for the year to October 1, 2011, as revenues continue to fall.
Total revenue across the group fell from £182.4m to £175.5m. Pre-tax profit dropped from £12.4m to £7.9m during the period, while like-for-like revenues declined by 2%, as a stagnant housing market and worsening economic outlook hit consumer confidence.

This decline has continued into the company's new financial year, with like-for-like revenues declining 6.9% in the first seven weeks since October 1.

Topps chief executive Matthew Williams said: "With very challenging trading conditions persisting throughout the second half of our financial period, our focus has been on strengthening our market leading position. We further upgraded and expanded our store estate, continued the evolution of the Topps Tiles offer and supported this with new marketing initiatives instore, on television and online. In addition, we made some significant infrastructure investments across the business which will benefit our future performance."

The company added 14 net new Topps Tiles stores during the period, including 12 new locations, and converted five Tile Clearing House stores into the more profitable Topps format. The construction of a second warehousing facility was also completed at the company's headquarters in Leicestershire, costing around £3m.

Looking ahead, Mr Williams continued: "We expect economic conditions will remain difficult in 2012, with consumer budgets again under pressure. Our response will be to take further cost out of the business, grow margin and maximise sales opportunities, whilst making operational improvements that will position the business for future growth as economic conditions improve."

The company increased its market share by 1% during the year and increased gross margin to 59.6%, up from 58.7% last year, reflecting further supply chain efficiencies and cost management. Net debt stands at £50.9m at period end.