TIDMTPT
RNS Number : 5601N
Topps Tiles PLC
19 May 2015
19 May 2015
Topps Tiles Plc
("Topps Tiles", "the Group" or "the Company")
UNAUDITED INTERIM REPORT FOR THE 26 WEEKS ENDED 28 March
2015
Encouraging sales growth, Further market share gains, Extending
appeal of the Topps brand
HIGHLIGHTS
Topps Tiles Plc, the UK's largest tile specialist with 343
stores, announces its interim results for the 26 weeks ended 28
March 2015.
26 weeks ended 26 weeks ended YoY%
28 March 29 March
2015 2014
Group revenue GBP104.0 million GBP97.7 million +6.4%
Like-for-like revenue
growth year on year +5.3% +10.2%
Gross margin 60.7% 60.8% (10)bps
Adjusted operating
profit(1) GBP9.6 million GBP8.9 million +7.9%
Adjusted profit before
tax(2) GBP9.1 million GBP8.0 million +13.8%
Adjusted earnings
per share(3) 3.67p 3.22p +14.0%
Interim dividend 0.75p 0.65p +15.4%
Net debt(4) GBP31.0 million GBP36.3 million GBP5.3 million
Operating profit GBP10.1 million GBP8.8 million +14.8%
Profit before tax GBP9.1 million GBP8.0 million +13.8%
Basic earnings per
share 3.67p 3.18p +15.4%
Financial Highlights
-- Total sales growth of 6.4%, with like-for-like sales ahead by 5.3%
-- Gross margin of 60.7% (2014: 60.8%) with underlying gains
offset by growth of lower margin trade business
-- Adjusted EPS growth of 14.0% year on year (2014: 76%)
-- Net debt reduced by GBP5.3 million year on year to GBP31.0 million at 28 March
-- Interim dividend increased by 15.4% to 0.75p (2014: 0.65p)
Operational Highlights
-- Growth ahead of the tile market - reflecting successful focus
on taking profitable market share.
-- Trade sales increased to 48.3% of total (2014: 44.0%) driven
by accelerating "do it for me" trend and extension of successful
trade loyalty scheme
-- Completed roll-out of updated branding to all stores
-- Launch of new online "tile visualiser" and tablet PCs across
the estate to enhance the in-store customer experience
-- Extension of Topps Tiles Boutique store trial - two further
stores opened in Knutsford and St John's Wood with plans to be
trading from 12-13 stores by year end.
Current Trading and Outlook
-- Like for like sales over 6 weeks to 9 May 2015 increased by
5.1% (2014: 6 weeks to 10 May 2014 increased by 6.1%)
Commenting on the results, Matthew Williams, Chief Executive
said:
"Topps had an encouraging first half, increasing like-for-like
sales by 5.3% and achieving further growth in market share.
Initiatives to upgrade and rebrand our stores, making the shopping
experience even more inspirational, have been well-received by
customers. Our well-established trade offer is also ensuring that
we keep pace with the accelerating "do it for me" trend, as more
customers than ever use a professional fitter for their tiling
project.
We have made a positive start to the second half, with
like-for-like sales up by 5.1% in the first six weeks of the
period. Looking ahead, we are well-positioned to grow our market
share further as we continue to extend the appeal of the Topps
brand."
Notes
(1) Adjusted operating profit is adjusted for the gain on a
lease surrender of GBP0.6 million (2014: nil), and loss on disposal
of plant, property and equipment, movements in onerous provisions
and business restructuring costs of GBP0.1m million (charge) (2014:
GBP0.1m charge).
(2) Adjusted profit before tax is adjusted for the effect of the
items above plus an increase to the provision for interest charges
relating to historical HMRC corporation tax enquiries of GBP0.5
million (2014: nil) and a gain on disposal of one freehold property
of GBP0.1 million (2014: nil). The prior year adjusted profit
before tax is adjusted for GBP0.1 million (non cash) gain relating
to forward currency contracts the Group (defined as Topps Tiles Plc
and all its subsidiaries) has in place (per IAS 39).
(3) Adjusted for the post tax effect of the above items.
(4) Net debt is defined as bank loans, before amortised issue
costs (note 6) and less cash and cash equivalents.
For further information please contact:
Topps Tiles Plc
Matthew Williams, Chief Executive
Officer (19/05/15) 020 7638 9571
Rob Parker, Chief Financial Officer (Thereafter) 0116 282 8000
Citigate Dewe Rogerson
Kevin Smith/Nick Hayns 020 7638 9571
A copy of this announcement can be found on our website
www.toppstiles.co.uk
UNAUDITED INTERIM REPORT
The Group delivered a successful first half performance, with
further sales growth, stable gross margins and strong growth in
profits. We believe this result reflects an outperformance of the
UK domestic tile market, driving further market share gains during
the period. Our strategy continues to focus on offering customers
outstanding value for money through an industry-leading product
range, world class customer service and multichannel convenience.
The Board wishes to extend its gratitude to colleagues across the
business for their continued hard work and dedication without which
these results would not have been possible.
Income Statement
Overall, first half revenue increased by 6.4% to GBP104.0
million (2014: GBP97.7 million). On a like-for-like basis sales
increased by 5.3% which, when taken on a two year basis, including
2014 like-for-like growth of 10.2%, represents growth of 15.5%.
Analysing like-for-like sales growth by quarter shows a 6.0%
improvement in quarter one and 4.5% growth in quarter two.
Gross margin for the period was 60.7% (2014: 60.8%). Gross
margin is a key metric for the business and we continue to work
closely with our suppliers to deliver a unique combination of
market leading products and exceptional value to our customers. Our
key areas of focus for gross margin are mix of business between
trade and retail customers, direct sourcing, exclusivity and new
product development.
Operating costs were GBP53.1 million, compared to GBP50.6
million in the prior interim period. On an adjusted basis,
(excluding one off charges as defined in note 1) operating costs
were GBP53.5 million, compared to GBP50.5 million in the prior
interim period. The principal drivers of the increased costs are as
follows:
-- An increase in the number of stores trading (an average of
336 stores vs 328 in the prior year), inflation and the impact of
increased volumes account for approximately GBP2.1 million of
additional costs; and
-- Employee profit share increased by GBP0.7 million as a result
of the strong financial performance and covers a range of
incentives from store commissions through to long term incentive
plans
Operating profit for the period was GBP10.1 million (2014:
GBP8.8 million). On an adjusted basis operating profit was GBP9.6
million (2014: GBP8.9 million), a 7.9% increase year-on-year. The
key driver of this improvement was the increased sales revenue
which generated an additional GBP3.8 million of gross profit,
partly offset by an additional GBP3.1 million of adjusted operating
costs, as explained in note 1 above.
There was one property disposal in the period which generated a
gain of GBP0.1 million (2014: no disposals).
The net interest charge for the Group was GBP1.0 million (2014:
GBP0.8 million). On an adjusted basis (excluding the gains and
charges as defined in note 2), the net interest charge was GBP0.6
million (2014: GBP0.9 million). Adjusting items are fair value
(non-cash) movements in the mark to market valuation ("MTM") of
forward currency contracts the Group has in place and movements in
the provision for interest charges relating to historical HMRC
corporation tax enquiries. The charge for the period is GBP0.5
million (2014: GBP0.1 million gain). The Group does not apply hedge
accounting (as per IAS39) to gains or losses on the forward
currency contracts the Group has in place and hence this gain is
being applied directly to the income statement rather than offset
against balance sheet reserves.
Adjusted profit before tax was GBP9.1 million (2014: GBP8.0
million), representing an increase of 13.8% year on year.
When adjusting items are included, the statutory measure of
profit before tax for the Group was GBP9.1 million (2014: GBP8.0
million). Adjusting items are detailed through the interim report
and in the notes on page 2 and include charges against the
impairment or loss on disposal of plant, property and equipment,
business restructuring charges, onerous lease charges, fair value
(non-cash) movements in the MTM valuation (as explained in net
interest above) of forward currency contracts and charges relating
to historical HMRC corporation tax enquiries.
The effective tax rate for the 26 weeks to 28 March 2015 is
21.8% (2014: 23.1%). The expected full year effective tax rate is
21.8% (2014: 23.1%).
Basic earnings per share were 3.67p (2014: 3.18p). Adjusting for
the post tax impact of the items detailed in notes 1-3 in the
highlights section the adjusted basic earnings per share were 3.67p
(2014: 3.22p), an increase of 14.0%.
Financial Position
Capital expenditure (excluding freehold acquisitions) in the
period amounted to GBP3.9 million (2014: GBP3.4 million). The
increase year on year has been driven by our investment in store
rebranding which has accounted for GBP0.9 million of expenditure.
We continue to improve and expand the store estate on a selective
basis, seeking to deliver a prudent balance between quality sites
and our growth ambitions. An analysis of new store openings is
included in the Strategic and Operational Review section of this
document.
The Group currently owns 8 freehold or long leasehold sites
(2014: 6), including one warehouse and distribution facility, with
a total net book value of GBP16.6 million (2014: GBP14.0
million).
The Group purchased two freehold sites in the period at a cost
of GBP1.2 million (2014: GBP0.5 million).
There was 1 property disposal in the period with proceeds of
GBP0.6 million (2014: no property disposals).
At the period end cash and cash equivalents for the Group were
GBP14.0 million (2014: GBP13.7 million) and borrowings were GBP45.0
million (2014: GBP50.0 million), giving a net debt position of
GBP31.0 million (2014: GBP36.3 million).
The Group has GBP50.0 million (2014: GBP65.0 million) of loan
facilities in place which are non-amortising and committed to June
2019.
At the period end the Group had GBP30.4 million of inventories
(2014: GBP28.8 million) which represented 141 days cover (2014: 143
days). This increase reflects the growth in the store estate, a
drive to increase the availability of key selling lines and new
product ranges which include a number of new lines at higher price
points.
Key Performance Indicators
As set out in our most recent annual report, we monitor our
performance in implementing our strategy with reference to a
clearly defined set of key performance indicators ("KPIs"). These
KPIs are applied on a Group wide basis. Our performance in the 26
weeks ended 28 March 2015 is set out in the table below. The source
of data and calculation methods are consistent with those used in
the 2014 annual report.
Results for the 26 weeks ended 28 March 2015
Highlights
26 weeks 26 weeks
to to
28 March 29 March
Financial KPIs 2015 2014
Like-for-like revenue year-on-year 5.3% 10.2%
----------------------------------------- --------- ---------
Total sales growth year-on-year 6.4% 11.7%
----------------------------------------- --------- ---------
Gross margin 60.7% 60.8%
----------------------------------------- --------- ---------
Adjusted operating profit GBP9.6m GBP8.9m
----------------------------------------- --------- ---------
Adjusted profit before tax * GBP9.1m GBP8.0m
----------------------------------------- --------- ---------
Net debt GBP31.0m GBP36.3m
----------------------------------------- --------- ---------
Adjusted earnings per share * 3.68p 3.22p
----------------------------------------- --------- ---------
Stock days 141 143
----------------------------------------- --------- ---------
26 weeks 26 weeks
to to
28 March 29 March
Non Financial KPIs 2015 2014
----------------------------------------- --------- ---------
Market share (UK domestic market only)** 30.3% 28.5%
----------------------------------------- --------- ---------
Number of stores at period end 340 330
----------------------------------------- --------- ---------
* As explained on page 1 in note 2-3
** Market share as per September 2014 based on UK domestic tile
market which is estimated as 50% of the overall UK tile market.
Dividend
The Board is pleased to declare an increased interim dividend of
0.75 pence per share (2014: 0.65 pence per share). The shares will
trade ex-dividend on 11 June 2015 and the dividend will be paid on
15 July 2015 to shareholders on the register at 12 June 2015.
Strategic & Operational Review
The primary goal for the business remains profitable market
share growth and our strategy to achieve this is focused on being
the UK's leading tile specialist, delivering outstanding value to
our customers, across the following areas:
Range authority - Topps has the most comprehensive and
up-to-date range of quality tiles in the UK market, with over 70
new tile ranges launched in the last year. Within our sector we are
recognised as a leader in product innovation, enabling us to keep
one step ahead of our customers' increasingly adventurous tastes.
Specifically, we have built range authority through:
-- Continuous product innovation and driving new sourcing,
format, print and glazing approaches to create desirable and
on-trend designs.
-- Extending the range of professional trade fitting and related
products based on feedback received from our fast-growing trade
loyalty programme.
-- Evolving our natural stone and small tile ranges to bring the
latest designs to market and create a clear differential over other
tile retailers.
Providing an inspirational shopping experience - we are
fanatical about providing market leading levels of service in order
that we can inspire our customers' home improvement projects,
specifically:
-- Over the last twelve months all stores have been refreshed
internally and externally, with new signage and consistent modern
branding that supports our position as the leading tile retailer in
the UK and the place to find the latest designs and receive expert
advice.
-- We are leading our market with the launch of a new online
visualisation tool which enables customers to view a range of tiles
in a variety of room settings. We have also brought this technology
into store by providing tablet computers to support the interactive
sales process.
-- We have established a new brand audit process to help support
consistency and our drive to constantly improve the world class
service we provide.
-- We have launched a very successful rewards programme for our
trade customers that is encouraging even greater levels of loyalty
amongst this important customer group, which is becoming an
increasingly important channel to market as the trend for "do it
for me" accelerates. The trade proportion of overall business has
increased significantly over recent years and now accounts for
around half of revenues. The rewards programme has over 9,000
active traders currently and later this year will be linked to a
new customer relationship management system.
-- We continue to provide world class levels of customer service
and will extend our advantage through the launch of new "platinum
service" standards in H2
Multi-channel convenience - convenience for our customer means
Topps delivering a seamless integrated shopping experience across
all of the available channels; stores, PC, mobile, telephone, and
also the important integration with their tile fitter. More
specifically:
-- Our stores remain the dominant channel with 99% of customers
coming to store at some stage of their journey with us. At the
start of the current financial year we had 335 stores. During the
first half we opened 9 new stores and closed 4 stores. At the
period end the Group was trading from a total of 340 stores (March
2014: 330 stores);
-- Our retail customers' increasingly ambitious tile projects
result in additional complexity which our trade customer base is
ideally suited to help deliver. We have implemented a series of
initiatives to support our traders and make shopping with Topps
easier for them.
-- During the period we continued the "Topps Tiles Boutique"
smaller store format trial in 5 stores in London. Trading results
from these new concept stores remain encouraging and we have plans
to extend the trial over the remainder of our financial year. Two
further stores at Knutsford and St John's Wood have been opened
since the period end and we have plans in place to be trading from
12-13 stores by year end. The trial extension will also include a
"Boutique Plus" format which includes a larger back of shop space
to hold limited quantities of stock. Boutique Plus enables us to
service traders' immediate needs and also facilitate customer
collections,
whilst maintaining the benefits of the Boutique showroom. This will be evaluated next year.
-- The Group's online strategy is focussed on making the online
and in-store customer experience as integrated and seamless as
possible. Online we have made further investments in the
multichannel experience such as a totally new checkout process and
delivery options menu, a new more intuitive tile selection process
and enhanced style / inspiration areas of the site. We continue to
see good growth in visitor numbers, conversion and orders online.
Importantly, we know that over 75% of our customers use
toppstiles.co.uk at some stage of their journey with us but that
less than 1% use online as the only channel.
The combination of these strategic initiatives creates a clear
competitive advantage which we believe will continue to drive
further market share growth.
Risks and Uncertainties
The Board continues to monitor the key risks and uncertainties
of the Group and do not consider that there has been any material
change to those documented in the 2014 Annual Report and
Accounts.
Board Changes
In February 2015 Keith Down joined the Board as a Non-Executive
Director and Chairman of our Audit Committee. Keith is Group
Finance Director at Go-Ahead Group Plc and was previously a
director at JD Wetherspoon plc. At the same time, Claire Tiney was
appointed as the Senior Independent Director, following the
retirement of Alan White.
Our Non-Executive Chairman, Michael Jack, retired from the Board
in March 2015, having spent fifteen years as a Non-Executive
Director with the last three and half years as Chairman. The Board
would like to place on record their thanks and appreciation for
Michael's unwavering dedication and significant contribution to the
business over this period.
Michael was replaced as Non-executive Chairman by Darren
Shapland. Darren has over 25 years of retail and public company
experience, including five years as Chief Financial Officer of J
Sainsbury plc. He is currently Chairman of Poundland Group Plc and
Maplin Electronics Limited, and a Non-Executive Director at
Ladbrokes Plc and Wolseley Plc.
The Board is now comprised of an Independent Non-executive
Chairman, three Independent Non-Executive Directors and two
Executive Directors, and its composition is fully compliant with
the Combined Code.
Going Concern
Based on a detailed review the Board believes the Group will
continue to operate within its loan facility covenants, and meet
all of its financial commitments as they fall due. On this basis
the Board consider that the Group will be able to continue as a
going concern and have prepared the financial statements on this
basis.
Current Trading
In the first six weeks of the second half Group revenues, which
are on a like-for-like basis, increased by 5.1% (2014: increased by
6.1%).
Outlook
We have delivered a strong first half performance and are
benefitting from a well- executed and consistent strategy supported
by continued investments in our business to lay the foundations for
future growth.
We have made a good start to the second half with healthy levels
of sales growth in the initial six weeks. We continue to grow sales
ahead of the market and remain confident that our strategy will
continue to deliver profitable market share gains.
Matthew Williams Rob Parker
Chief Executive Officer Chief Financial Officer
19 May 2015
RESPONSIBILITY STATEMENT
We confirm that to the best of our knowledge:
(a) the condensed set of financial statements has been prepared in accordance with IAS 34
'Interim Financial Reporting';
(b) the interim management report includes a fair review of the information required by DTR
4.2.7R (indication of important events during the first six months and description of principal
risks and uncertainties for the remaining six months of the year); and
(c) the interim management report includes a fair review of the information required by DTR
4.2.8R (disclosure of related parties' transactions and changes therein).
By order of the Board,
Matthew Williams Rob Parker
Chief Executive Officer Chief Financial Officer
19 May 2015
Cautionary statement
This Interim Management Report ("IMR") has been prepared solely
to provide additional information to shareholders to assess the
Group's strategies and the potential for those strategies to
succeed. The IMR should not be relied on by any other party or for
any other purpose.
The IMR contains certain forward-looking statements. These
statements are made by the directors in good faith based on the
information available to them up to the time of their approval of
this report but such statements should be treated with caution due
to the inherent uncertainties, including both economic and business
risk factors, underlying any such forward-looking information.
This interim management report has been prepared for the Group
as a whole and therefore gives greater emphasis to those matters
which are significant to Topps Tiles Plc and its subsidiary
undertakings when viewed as a whole.
Condensed Consolidated Statement
of Financial Performance
for the 26 weeks ended 28 March 2015
26 weeks 26 weeks 52 weeks
ended ended ended
28 March 29 March 27 September
2015 2014 2014
GBP'000 GBP'000 GBP'000
Note (Unaudited) (Unaudited) (Audited)
Group revenue - continuing operations 104,026 97,684 195,237
Cost of sales (40,834) (38,263) (76,367)
--------------------------------------- ----- ------------ ------------ -------------
Gross profit 63,192 59,421 118,870
Employee profit sharing (5,429) (4,683) (9,827)
Distribution costs (35,588) (34,736) (69,161)
Other operating expenses (2,586) (2,547) (5,359)
Administrative costs (6,644) (5,787) (11,665)
Sales and marketing costs (2,885) (2,872) (4,672)
Group operating profit 10,060 8,796 18,186
Other gains 81 - 401
Investment revenue 93 158 251
Finance costs (1,132) (998) (2,147)
--------------------------------------- ----- ------------ ------------ -------------
Profit before taxation 9,102 7,956 16,691
Taxation 3 (1,986) (1,838) (4,179)
--------------------------------------- ----- ------------ ------------ -------------
Profit for the period attributable
to equity holders of
the parent company 7,116 6,118 12,512
--------------------------------------- ----- ------------ ------------ -------------
Earnings per ordinary share
-basic 5 3.67p 3.18p 6.49p
-diluted 5 3.65p 3.15p 6.43p
There are no other recognised gains and losses for the current
and preceding financial periods other than the results shown above.
Accordingly a separate Condensed Consolidated Statement of
Comprehensive Income has not been prepared.
Condensed Consolidated Statement
of Financial Position as
at 28 March 2015
28 March 29 March 27 September
2015 2014 2014
GBP'000 GBP'000 GBP'000
Note (Unaudited) (Unaudited) (Audited)
------------------------------------- ----- ------------ ------------ -------------
Non-current assets
Goodwill 245 245 245
Property, plant and equipment 43,334 36,805 41,294
------------------------------------- ----- ------------ ------------ -------------
43,579 37,050 41,539
------------------------------------- ----- ------------ ------------ -------------
Current assets
Inventories 30,441 28,848 27,846
Trade and other receivables 7,249 6,765 5,800
Cash and cash equivalents 14,024 13,692 19,547
------------------------------------- ----- ------------ ------------ -------------
51,714 49,305 53,193
------------------------------------- ----- ------------ ------------ -------------
Total assets 95,293 86,355 94,732
Current liabilities
Trade and other payables (37,852) (33,277) (36,240)
Current tax liabilities (5,032) (5,308) (4,888)
Provisions for liabilities
and charges (811) (985) (876)
Total current liabilities (43,695) (39,570) (42,004)
------------------------------------- ----- ------------ ------------ -------------
Net current assets 8,019 9,735 11,189
------------------------------------- ----- ------------ ------------ -------------
Non-current liabilities
Bank loans 6 (44,632) (49,953) (49,581)
Deferred tax liabilities (228) (165) (261)
Provisions for liabilities
and charges (2,168) (2,047) (2,043)
------------------------------------- -----
Total liabilities (90,723) (91,735) (93,889)
------------------------------------- ----- ------------ ------------ -------------
Net assets / (liabilities) 4,570 (5,380) 843
------------------------------------- ----- ------------ ------------ -------------
Equity
Share capital 9 6,456 6,405 6,455
Share premium 1,898 1,500 1,879
Own shares (1,160) (10) (656)
Merger reserve (399) (399) (399)
Share-based payment reserve 2,010 1,058 1,941
Capital redemption reserve 20,359 20,359 20,359
Retained earnings (24,594) (34,293) (28,736)
Total funds/ (deficit) attributable
to equity holders of the
parent 4,570 (5,380) 843
------------------------------------- ----- ------------ ------------ -------------
Condensed Consolidated
Statement of Changes
in Equity
For the 26 weeks
ended 28 March 2015
Equity attributable to equity holders
of the parent
----------------------------- ---------------------------------------------------- ----------- --------- --------
Share-based Capital
Share Share Own Merger payment redemption Retained Total
capital premium shares reserve reserve reserve earnings equity
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
----------------------------- -------- -------- -------- -------- ------------ ----------- --------- --------
Balance at
27 September 2014
(Audited) 6,455 1,879 (656) (399) 1,941 20,359 (28,736) 843
Total comprehensive
income for the period - - - - - - 7,116 7,116
Issue of share capital 1 19 - - - - - 20
Own shares purchased
in the period - - (504) - - - - (504)
Dividends - - - - - - (3,087) (3,087)
Credit to equity
for equity-settled
share based payments - - - - 69 - - 69
Deferred tax on share-based
payment transactions - - - - - - 113 113
Balance at
28 March 2015
(Unaudited) 6,456 1,898 (1,160) (399) 2,010 20,359 (24,594) 4,570
----------------------------- -------- -------- -------- -------- ------------ ----------- --------- --------
For the 26 weeks
ended 29 March 2014
Equity attributable to equity holders
of the parent
----------------------------- ---------------------------------------------------- ----------- --------- ---------
Share-based Capital
Share Share Own Merger payment redemption Retained Total
capital premium shares reserve reserve reserve earnings equity
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
----------------------------- -------- -------- -------- -------- ------------ ----------- --------- ---------
Balance at
28 September 2013
(Audited) 6,404 1,492 (10) (399) 649 20,359 (38,679) (10,184)
Total comprehensive
income
for the period - - - - - - 6,118 6,118
Issue of share capital 1 8 - - - - - 9
Dividends - - - - - - (1,919) (1,919)
Credit to equity
for equity-settled
share based payments - - - - 409 - - 409
Deferred tax on share-based
payment transactions - - - - - - 187 187
Balance at
29 March 2014
(Unaudited) 6,405 1,500 (10) (399) 1,058 20,359 (34,293) (5,380)
----------------------------- -------- -------- -------- -------- ------------ ----------- --------- ---------
Condensed Consolidated
Statement of Changes
in Equity (continued)
For the 52 weeks
ended 27 September
2014
Equity attributable to equity holders
of the parent
----------------------------- ---------------------------------------------------- ----------- --------- ---------
Share Share-based Capital
Share premium Own Merger payment redemption Retained Total
capital account shares reserve reserve reserve earnings equity
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
----------------------------- -------- -------- -------- -------- ------------ ----------- --------- ---------
Balance at
28 September 2013
(Audited) 6,404 1,492 (10) (399) 649 20,359 (38,679) (10,184)
Total comprehensive
income for the period - - - - - - 12,512 12,512
Issue of share capital 51 387 - - - - - 438
Dividends - - - - - - (3,175) (3,175)
Own shares purchased
in the period - - (650) - - - - (650)
Own shares issued
in the period - - 4 - - - - 4
Credit to equity
for equity-settled
share based payments - - - - 1,292 - - 1,292
Deferred tax on share-based
payment transactions - - - - - - 606 606
Balance at
27 September 2014
(Audited) 6,455 1,879 (656) (399) 1,941 20,359 (28,736) 843
----------------------------- -------- -------- -------- -------- ------------ ----------- --------- ---------
Condensed Statement of Cash Flows
for the 26 weeks ended 28 March
2015
26 weeks 26 weeks 52 weeks
ended ended ended
28 March 29 March 27 September
2015 2014 2014
GBP'000 GBP'000 GBP'000
(Unaudited) (Unaudited) (Audited)
---------------------------------------- ------------ ------------ -------------
Cash flow from operating activities
Profit for the period 7,116 6,118 12,512
Taxation 1,986 1,838 4,179
Finance costs 1,132 998 2,147
Investment revenue (93) (158) (251)
Other gains (81) - (401)
---------------------------------------- ------------ ------------ -------------
Group operating profit 10,060 8,796 18,186
Adjustments for:
Depreciation of property, plant
and equipment 2,461 2,237 4,553
Impairment of property, plant and
equipment 47 192 348
Share option charge 69 408 1,292
(Increase)/ decrease in trade and
other receivables (1,446) 946 1,834
Increase in inventories (2,595) (2,652) (1,650)
Increase/ (decrease) in payables 2,105 (2,488) 348
---------------------------------------- ------------ ------------ -------------
Cash generated by operations 10,701 7,439 24,911
Interest paid (1,342) (761) (1,695)
Taxation paid (1,762) (338) (2,582)
---------------------------------------- ------------ ------------ -------------
Net cash from operating activities 7,597 6,340 20,634
Investing activities
Interest received 92 64 140
Purchase of property, plant and
equipment (5,223) (4,262) (11,450)
Proceeds on disposal of property,
plant and equipment 592 17 733
Purchase of own shares (504) - (646)
---------------------------------------- ------------ ------------ -------------
Net cash used in investment activities (5,043) (4,181) (11,223)
Financing activities
Dividends paid (3,087) (1,919) (3,175)
Proceeds from issue of share capital 20 9 438
Repayment of bank loans (5,000) (5,000) (5,000)
Loan issue costs (10) - (570)
Net cash used in financing activities (8,077) (6,910) (8,307)
Net (decrease)/ increase in cash
and cash equivalents (5,523) (4,751) 1,104
---------------------------------------- ------------ ------------ -------------
Cash and cash equivalents at beginning
of period 19,547 18,443 18,443
---------------------------------------- ------------ ------------ -------------
Cash and cash equivalents at end
of period 14,024 13,692 19,547
---------------------------------------- ------------ ------------ -------------
1. General information
The interim report was approved by the Board on 19 May 2015. The
financial information for the 26 weeks ended 28 March 2015 has been
reviewed by the company's auditor. Their report is included within
this announcement. The financial information for the 26 weeks ended
29 March 2014 has neither been audited nor reviewed by the
company's auditor. The financial information for the 52 week period
ended 27 September 2014 has been based on information in the
audited financial statements for that period.
The comparative figures for the 52 week period ended 27
September 2014 are an abridged version of the Group's full
financial statements and, together with other financial information
contained in these interim results, do not constitute statutory
financial statements of the Group as defined in section 434 of the
Companies Act 2006. A copy of the statutory accounts for that 52
week period has been delivered to the Registrar of Companies. The
auditor has reported on those accounts: their report was
unqualified, did not draw attention to any matters by way of
emphasis and did not contain a statement under s498(2) or (3) of
the Companies Act 2006.
This condensed set of consolidated financial statements has been
prepared for the 26 weeks ended 28 March 2015 and the comparative
period has been prepared for the 26 weeks ended 29 March 2014.
Basis of preparation and accounting policies
The annual financial statements of Topps Tiles Plc are prepared
in accordance with IFRSs as adopted by the European Union. The
unaudited condensed consolidated set of financial statements
included in this half-yearly financial report has been prepared in
accordance with International Accounting Standard 34 'Interim
Financial Reporting', as adopted by the European Union. The same
accounting policies, presentation and methods of computation are
followed in the condensed set of financial statements as applied in
the Group's latest annual audited financial statements.
Going concern
Based on a detailed review of the risks and uncertainties
contained within the risks and uncertainties section above, the
financial facilities available to the Group, management's latest
revised forecasts and a range of sensitised scenarios the Board
believe the Group will continue to meet all of its financial
commitments as they fall due and will be able to continue as a
going concern. The Board, therefore, consider it appropriate to
prepare the financial statements on a going concern basis.
2. Business segments
IFRS 8 requires operating segments to be identified on the basis
of internal reports about components of the Group that are
regularly reviewed by the Chief Executive to allocate resources to
the segments and to assess their performance. As there is one
segment, being the operation of retail stores in the UK, and the
Chief Executive bases decisions on the performance of the Group as
a whole, separate operating segments have not been identified.
3. Taxation
26 weeks 26 weeks 52 weeks
ended ended Ended
28 March 29 March 27 September
2015 2014 2014
GBP'000 GBP'000 GBP'000
(Unaudited) (Unaudited) (Audited)
-------------------------------------- ------------ ------------ -------------
Current tax - charge for the period 1,986 1,912 4,087
Current tax - adjustment in respect
of previous periods - - (57)
Deferred tax - effect of reduction
in UK corporation tax rate - - (81)
Deferred tax - charge / (credit)
for the period - (74) 133
Deferred tax - adjustment in respect
of previous periods - - 97
1,986 1,838 4,179
-------------------------------------- ------------ ------------ -------------
4. Interim dividend
An interim dividend of 0.75p (2014: 0.65p) per ordinary share
has been declared payable on 15 July 2015 to shareholders on the
register at 12 June 2015; in accordance with IFRS the dividend will
be recorded in the financial statements in the second half of the
period. A final dividend of 1.60p per ordinary share was approved
and paid in the period, in relation to the 52 week period ended 27
September 2014.
5. Earnings per share
Basic earnings per share for the 26 weeks ended 28 March 2015
were 3.67p (2014: 3.18p) having been calculated on earnings (after
deducting taxation) of GBP7,116,046 (2014: GBP6,118,482) and on
ordinary shares of 193,675,300 (2014: 192,157,729), being the
weighted average of ordinary shares in issue during the period.
Diluted earnings per share for the 26 weeks ended 28 March 2015
were 3.65p (2014: 3.15p) having been calculated on earnings (after
deducting taxation) of GBP7,116,046 (2014: GBP6,118,482) and on
ordinary shares of 194,715,418 (2014: 194,411,482), being the
weighted average of ordinary shares in issue during the period.
Adjusted earnings per share for the 26 weeks ended 28 March 2015
were 3.67p (2014: 3.22p) having been calculated on adjusted
earnings after tax of GBP7,101,469 (2014: GBP6,191,058) being
earnings (after deducting taxation) of GBP7,116,046 adjusted for
the post-tax impact of the following items; lease surrender
premiums of GBP400,000 (2014: GBPnil), HMRC interest of GBP401,885
(2014: GBPnil) forward currency contracts fair value gain of
GBP16,296 (2014: gain GBP72,613), impairment of property, plant and
equipment of GBP47,447 (2014: GBP192,195), gain on disposal of
freehold property of GBP80,876 (2014: GBPnil), a net charge impact
of onerous lease provision reductions and certain restructuring
costs of GBP33,263 (2014: GBP47,006 net credit).
6. Bank loans
26 weeks
ended
28 March
26 weeks
2015 ended 52 weeks ended
29 March 27 September
GBP'000 2014 2014
GBP'000
(Unaudited) (Unaudited) GBP'000 (Audited)
--------------------------------- ------------- -------------- -------------------
Bank loans (all sterling) 44,516 49,687 49,467
--------------------------------- ------------- -------------- -------------------
The borrowings are repayable
as follows:
On demand or within one year - 50,000 -
In the second to fifth year 45,000 - 50,000
--------------------------------- ------------- -------------- -------------------
45,000 50,000 50,000
Less: total unamortised issue
costs (484) (313) (533)
--------------------------------- ------------- -------------- -------------------
44,516 49,687 49,467
Issue costs to be amortised
within 12 months 116 266 114
--------------------------------- ------------- -------------- -------------------
Amount due for settlement after
12 months 44,632 49,953 49,581
The Group now has in place a GBP50.0 million committed revolving
credit facility, expiring 1 June 2019. As at the financial period
end GBP45.0 million of this facility was drawn, with a further
GBP5.0 million of undrawn financing available. The loan facility
contains financial covenants which are tested on a biannual
basis.
At 28 March 2015, the Group had available GBP5 million (2014:
GBP15 million) of undrawn committed banking facilities.
7. Contingent liabilities
The directors are not aware of any contingent liabilities faced
by the Group as at 28 March 2015.
8. Events after the balance sheet date
There were no events after the balance sheet date to report.
9. Share capital
The issued share capital of the Group as at 28 March 2015
amounted to GBP6,456,000 (29 March 2014: GBP6,405,000). The Group
issued 47,957 shares during the period increasing the number of
shares from 193,636,240 to 193,684,197.
10. Seasonality of sales
Historically there has not been any material seasonal difference
in sales between the first and second half of the reporting period,
with approximately 50% of annual sales arising in the period from
October to March.
11. Related Party Transactions
S.K.M Williams is a related party by virtue of his 10.45%
shareholding (20,243,950 ordinary shares) in the Group's issued
share capital (2014: 10.6% shareholding of 20,593,950 ordinary
shares).
At 28 March 2015 S.K.M Williams was the landlord of four
properties leased to Multi Tile Limited, a trading subsidiary of
Topps Tiles Plc, for GBP230,000 (2014: three properties for
GBP162,000) per annum.
No amounts were outstanding with S.K.M. Williams at 28 March
2015 (2014: GBPnil). The lease agreements on all properties are
operated on commercial arm's length terms.
Transactions between the Company and its subsidiaries, which are
related parties, have been eliminated on consolidation and are not
disclosed in this note, in accordance with the exemption available
under IAS24.
INDEPENDENT REVIEW REPORT TO TOPPS TILES PLC
We have been engaged by the company to review the condensed set
of financial statements in the half-yearly financial report for the
six months ended 28 March 2015 which comprises the Consolidated
Statement of Financial Performance, the Consolidated Statement of
Financial Position, the Consolidated Statement of Changes in
Equity, the Statement of Cash Flows and related notes 1 to 11. We
have read the other information contained in the half-yearly
financial report and considered whether it contains any apparent
misstatements or material inconsistencies with the information in
the condensed set of financial statements.
This report is made solely to the company in accordance with
International Standard on Review Engagements (UK and Ireland) 2410
"Review of Interim Financial Information Performed by the
Independent Auditor of the Entity" issued by the Auditing Practices
Board. Our work has been undertaken so that we might state to the
company those matters we are required to state to it in an
independent review report and for no other purpose. To the fullest
extent permitted by law, we do not accept or assume responsibility
to anyone other than the company, for our review work, for this
report, or for the conclusions we have formed.
We have not audited or reviewed the financial information for
the 26 week period ended 29 March 2014.
Directors' responsibilities
The half-yearly financial report is the responsibility of, and
has been approved by, the directors. The directors are responsible
for preparing the half-yearly financial report in accordance with
the Disclosure and Transparency Rules of the United Kingdom's
Financial Conduct Authority.
As disclosed in note 1, the annual financial statements of the
group are prepared in accordance with IFRSs as adopted by the
European Union. The condensed set of financial statements included
in this half-yearly financial report has been prepared in
accordance with International Accounting Standard 34, "Interim
Financial Reporting," as adopted by the European Union.
Our responsibility
Our responsibility is to express to the Company a conclusion on
the condensed set of financial statements in the half-yearly
financial report based on our review.
Scope of review
We conducted our review in accordance with International
Standard on Review Engagements (UK and Ireland) 2410 "Review of
Interim Financial Information Performed by the Independent Auditor
of the Entity" issued by the Auditing Practices Board for use in
the United Kingdom. A review of interim financial information
consists of making inquiries, primarily of persons responsible for
financial and accounting matters, and applying analytical and other
review procedures. A review is substantially less in scope than an
audit conducted in accordance with International Standards on
Auditing (UK and Ireland) and consequently does not enable us to
obtain assurance that we would become aware of all significant
matters that might be identified in an audit. Accordingly, we do
not express an audit opinion.
Conclusion
Based on our review, nothing has come to our attention that
causes us to believe that the condensed set of financial statements
in the half-yearly financial report for the six months ended 28
March 2015 is not prepared, in all material respects, in accordance
with International Accounting Standard 34 as adopted by the
European Union and the Disclosure and Transparency Rules of the
United Kingdom's Financial Conduct Authority.
Deloitte LLP
Chartered Accountants and Statutory Auditor
Manchester, United Kingdom
19 May 2015
This information is provided by RNS
The company news service from the London Stock Exchange
END
IR APMATMBABBFA
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