Topps Tiles (LON: TPT) is making solid progress on its strategic initiatives and self-help measures despite a difficult trading environment, according to Edison, which left its estimates unchanged following the company’s first-half 2026 results.
Topps Tiles shares declined over 2% following the release on Tuesday.
In a note from analyst Russell Pointon, Edison highlighted that adjusted pro forma operating profit rose 17.3% to £6.1 million in the first half, even as revenue edged down 0.2%, pointing to disciplined cost management in the face of inflationary pressures. Adjusted pro forma gross profit grew 2.9% to £75.6 million.
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Edison said Topps Tiles continues to outperform its market, with trade revenue growth outpacing retail, driven by strong momentum at Pro Tiler Tools and new initiatives including a credit offering that has been well received. Digital growth has been supported by new customer relationship management capabilities.
On acquisitions, Edison noted that Fired Earth is “performing ahead of expectations and is already profitable,” while CTD Tiles remains on track to turn profitable in the second half of fiscal 2026.
In response to softer second-quarter revenue, management has launched three self-help initiatives covering network rationalisation, a more flexible in-store labour model and reductions to head office costs, which Edison said are expected to deliver approximately £3 million in savings this year and around £6 million on an annualised basis.
Edison flagged valuation as a potential draw for investors, noting that Topps Tiles’ prospective enterprise value to sales multiple of 0.23 times “remains at the low end of its historical multiples.”
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