Shares in tile and flooring specialist Topps Tiles rose 4% today after the firm forecast half-year profits "significantly" ahead of market expectations.

The Wilmslow, Cheshire-based chain said pre-tax profits would be around £15 million for the six months to April 3, while like-for-like sales were up more than 20% over the half-year period.

Chief executive Nick Ounstead described the performance as "exceptional" but warned that sustaining the level of growth for the remainder of the year would prove challenging due to strong comparatives for last year.

Topps added that it planned to announce proposals for a share split - increasing the number of shares by reducing their value.

Mr Ounstead said: "We believe that a share split will increase liquidity by making our shares more affordable and accommodate investors who are deterred by the current price level."

Topps has benefited from national and television advertising, with slots accompanying national weather forecasts, the Home programme on ITV and the UK Living Channel on Sky.

And television shows such as Property Ladder and Changing Rooms have fostered an interest in DIY among homeowners, spurring demand for ceramic tiles for bathrooms, kitchens and conservatories.

The group has recently continued its expansion strategy in the UK, with new stores opening at Northwich, Aylesbury, Sudbury, Orpington and Cambridge.

This brought the total number of Topps Tiles outlets in the UK to 201, with a further eight operating in the Netherlands through a joint venture. The group plans to open a further 19 stores during the year.

The company posted pre-tax profits of £18.9 million in the year to September 30 of last year. Shares in the company rose more than 4% to 702.5p in early trading.

Tuesday March 16, 2004