Topps Tiles ruled itself out of the bidding for Birmingham floorcovering firm Floors-2-Go as it reported full year figures yesterday.
Relatively low tile usage coupled with a growing population and number of households put Topps Tiles in a bullish mood as it notched a 6.5 per cent increase in pretax profit.
The increase from #37.5 million to #39.9 million excluded share buy-back costs of #1.1 million and property gains of #258,000 and came in market conditions the company warned "remain challenging".
Pretax profit was #39.1 million versus #39.2 million to September 30, on revenue up 3.9 per cent to #180.2 million, reflecting a net 27 new stores.
Chief operating officer Matthew Williams ruled out a bid for Floors-2-Go, whose bosses revealed this month they were in talks about a possible takeover.
He said: "We had a look at Floors-2-Go, but have decided not to pursue.
"We have never been convinced about wood flooring, especially laminated. That product makes up ten per cent of our sales.
"We see laminate flooring as something a bit faddy."
Like-for-like revenue fell 1.8 per cent, but in the first seven weeks of its new financial year group revenue rose 10.3 per cent and was up 3.3 per cent on a like-for-like basis, which strips out the impact of new and closed space.
Last month the Wilmslow, Cheshire-based group, which has nine of its 271 stores in the Midlands, launched its first national advertising campaign.
Topps Tiles' share of the UK retail ceramic tile market increased by one percentage point to 21 per cent.
In the summer, the retailer returned #122.4 million of cash to shareholders, financed by existing resources and a new #116 million debt to create a more efficient balance sheet and enhance earnings per share.
The group reckons there is scope for 400 Topps Tiles stores and noted the UK market is forecast to grow by over 15 per cent between 2007 and 2011.
It said Britain still has one of the lowest useages per head of ceramic tiles in Europe.
Factors expected to drive growth include the growing trend to tile more rooms apart from the kitchen and bathroom.
Household numbers continue to grow faster than population, anticipated to rise 12 per cent over 25 years while there is expected to be a 23 per cent increase in households.
Chief executive Nick Ounstead said: "Topps has performed excellently in a tough year. We are confident in our business model which has remained resilient and have continued to grow market share.
Shares closed down 8p at 248p. "Additionally we have increased our store roll-out programme to 30 stores for this financial year and believe our strategy will continue to deliver future growth."
