Topps Tiles has warned of “subdued demand” in the domestic repair and maintenance sector, which is set to persist through 2024, as it announced its results for the first half of the financial year.

Britain’s largest tile retailer recorded total group sales of £122.6m in the 26 weeks to 30 March, a 5.9% reduction year-on-year.

However, this was against a record revenue performance in 2023.

Furthermore, like-for-like sales at Topps Tiles were 11.3% lower year-on-year in the second quarter, being driven by lower footfall and volume.

Although the gross margin percentage in Topps Tiles was up year-on-year as cost of goods pressures continued to ease, net profits were impacted by lower volumes, operating cost inflation and the impact of operational gearing, despite strong cost control throughout the period.

Online trading for the firm remained strong, with Topps Tiles stating that annual profits would be weighted towards the second half of the financial year.

Investment director at AJ Bell, Russ Mould, commented: “A profit warning from Topps Tiles suggests UK homeowners are still under too much financial pressure to spend freely on home improvement projects in the way they were a few years ago during COVID.”

Looking forward, the group expects its profitability to be impacted by a number of factors, including a weaker market, the timing of holiday pay accrual and seasonally higher energy usage.

However, Topps Tiles said that it will soon complete the acquisition of the remaining 40% shareholding in Pro Tiler Limited, following the end of the earn-out period.

The group also plans to discuss its new goal and future profit growth opportunities at the interim results on 21 May.

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