I’ve been watching penny stock Topps Tiles (LSE: TPT) since the company launched its Mission 365 strategy back in May 2024. The share price has lost 55% over five years. But the new plan has at least kept it stable over the past 12 months.
Initiated at first-half results time that year, the goal was “to grow group sales to £365 million in the medium term, with 8-10% adjusted profit before tax margins.”
Two years on, how’s it going? With the 2026 interim report released Tuesday(19 May), we heard of “significant progress against Mission 365 and the priorities for the year that we laid out in December 2025.“
Solid first half
“We are making good progress in delivering our strategic agenda, including a programme of self-help measures weighted towards the second half, and we are accelerating growth in digital, trade and category extensions.”
— CEO Alex Jensen
On the face of it, performance in the half looked mixed. Year-on-year comparisons are a bit tricky, after the impact of the 2024 CTD Tiles acquisition was excluded from adjusted measures in 2025.
On headline figures, adjusted revenue rose 11.6% compared to the first half of 2025. But on proforma measures, with CTD added back into 2025 H1 results, we saw the following…
- Adjusted revenue = £142.6m (-0.2%)
- Adjusted operating profit = £6.1m (+17.3%)
- Adjusted profit before tax = £2.2m (no change)
- Interim dividend = 1p per share
That might not look like a storming comeback. But against a background of rising inflation and tightened spending, I rate it as a positive first half. In fact, the update told us “Topps Group has outperformed the RMI [Repair, Maintenance, and Improvement] market.” That’s measured against the Barclays UK Consumer Spend Report for Home Improvements & DIY.
What comes next?
Faced with “ongoing political unrest and weak consumer sentiment,” management didn’t give us specific revenue or profit guidance for the full year.
But the company says revenue should be biased towards the second half, with cash generation expected to benefit. And so far, the first seven weeks of the new half have seen like-for-like revenues increase 0.6%. That follows a 2% like-for-like decline in the second quarter.
All in all, the company has “confidence that it will deliver modest year-on-year profit growth in line with market expectations, assuming macro conditions and consumer confidence do not deteriorate further.“
Coincidentally, the International Monetary Fund has just upped its 2026 UK growth estimate to 1%, with cautions over Iran war fallout and “domestic uncertainty.” Fingers crossed.
What should we do?
I’m keeping a careful eye on the balance sheet, as net debt rose to £3.1m from £1.2m a year prior. But with a £30m banking facility, that doesn’t worry me too much at this stage.
And that dividend? There’s no word on full-year expectations, though policy is to pay a third of the previous year’s total at interim time. Forecasters have a yield of 8.5% on the cards.
There’s clearly still plenty to do — and no guarantee of success. But for penny stock watchers, I see potential here. I think Topps Tiles is definitely one to consider.
Alan Oscroft does not hold any positions in the companies mentioned.
