UPDATE 1-UK's Topps Tiles expects sales, margin to recover after first-half hit

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March 31 (Reuters) - Topps Tiles posted lower half-year sales on Wednesday, but the tile retailer said it expects revenue to rise “sharply” and margins to recover to normal levels as the current lockdown in the United Kingdom gradually eases by the middle of April.

The company’s commercial segment has taken a significant hit, particularly across restaurants, bars and leisure areas due to the COVID-19-led lockdowns, but retail sales held up as more Britons undertook home-improvement projects.

Total revenue for the 26-week period ending March 27, 2021 slipped to 103.6 million pounds ($142.14 million) from 106.2 million a year ago, Topps said, adding that margins in the second quarter would be lower than the first due to virus curbs.

Shares of the company fell by about 1.5% to 68 pence in early trading on Wednesday.

UK Prime Minister Boris Johnson set out a four-stage easing of the lockdown in February under which non-essential retailers will be permitted to operate from April 12, providing Topps some relief as its stores were shut for most of the year.

The company, which posted a 17.3% fall in like-for-like retail sales in the second quarter, said there has also been increased pressure from extra delivery costs associated with online sales when its stores were shuttered.

Topps, however, expects good progress overall in the second half of the year.

The number of people heading out to UK shops rose by 6.6% in the week to March 27, compared with the previous week, industry data showed on Monday. ($1 = 0.7289 pounds) (Reporting by Priyanshi Mandhan and Pushkala Aripaka in Bengaluru; editing by Uttaresh.V)