Topps Tiles grew its sales and profits in the year to September 29 2012. But DIY Week analysis of the accounts filed recently at Companies House shows that stockturn declined, and operating margin is still well below the level achieved two years ago.
Sales rose 1.2% at £177.7m, and gross profit rose 1.8% to £106.5m, but these are still below the £182.4m and £107.2m recorded in 09/10. On the credit side, gross margin continued to grow, hitting 60%, and emphasising that tile retailing can be a very profitable business.

The other side of the tile retailing coin, however, is the need to maintain stock availability across a huge range of largely imported product, which means that tile specialists invariably manage only modest stockturn figures. In Topps' case, stockturn suffered this year, down from 3 times to 2.7.

Operating profit improved by 11% to £15.5m, still well down on the £19.9m recorded two years earlier. But at pre-tax level, a £12.5m profit was not only 58% up year-on-year - it was also higher than the £12.4m achieved in 09/10. Staff headcount was virtually unchanged, but the salary bill rose 1.4% in line with sales, meaning that the staff cost was unchanged at 24.1% of sales.

Overall store numbers increased by five, including 13 new locations, and 10 Tile Clearing House stores were converted to the more profitable Topps Tiles format.

The company said that a dual strategy of inspiring DIY customers' home improvement projects, coupled with an increased focus on tradesmen, had grown its share of the tile market from 26% to 27% - and the focus now is on extending its market leadership through improved customer service, enhanced product range, and "maximising sales opportunities in a tough retail environment".