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Topps Tiles full-year pretax profit slumps, shores up inventory ahead of Brexit

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(Reuters) – Britain’s biggest tile retailer Topps Tiles Plc <TPT.L> on Tuesday posted a sharp drop in full-year pretax profit and said it plans to increase inventory of its most important products to shield against any supply chain disruptions due to Brexit.

The company, which sells bathroom, wall and floor tiles, said Brexit could hit consumer confidence, resulting in lower sales and could also lead to staffing issues from a smaller labour pool.

Britain has undergone a long period of uncertainty ahead of its exit from the world’s biggest trading bloc and companies are planning for substantial interruptions to the flow of goods and parts across country borders.

Topps Tiles full-year pretax profit fell 25.3 percent to 12.7 million pounds for the 52 weeks ended Sept. 29, as Britons curbed discretionary spending ahead of Brexit and a bitter winter and unusually hot summer kept shoppers out of stores.

British consumers reined in spending last month, payments company Visa said on Tuesday, adding to signs that the economy is on track for slower growth in the final months of this year.

The retailer often mirrors the wider health of Britain’s housing market and it takes a hit when consumers decide not to move or spend money on home improvements.

Since the Brexit vote in 2016, many households have seen their spending power pinched by inflation that has risen faster than pay. The uncertain outlook about Britain’s economy outside the EU has also weighed on the property market, leading Britons to put off major renovations or buy new houses.

Topps Tiles, which has 370 stores, said like-for-like sales for the first eight weeks of the new financial year fell 1.9 percent, as challenging conditions persisted.

(Reporting by Noor Zainab Hussain and Tanishaa Nadkar in Bengaluru; Editing by Bernard Orr)

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