TIDMTPT
RNS Number : 0536Z
Topps Tiles PLC
24 May 2016
24 May 2016
Topps Tiles Plc
("Topps Tiles", "the Group" or "the Company")
UNAUDITED INTERIM REPORT FOR THE 26 WEEKSED 2 April 2016
Strategy delivering robust growth in sales, profits and
dividend
Strong current trade and confident outlook underpinned by
further extension of Topps brand appeal
HIGHLIGHTS
Topps Tiles Plc, the UK's largest tile specialist with 345
stores, announces its interim results for the 26 weeks ended 2
April 2016.
26 weeks 26 weeks YoY
ended ended
2 April 28 March
2016 2015
GBP108.0 GBP104.0
Group revenue million million +3.8%
Like-for-like revenue
growth year on year +4.7% +5.3%
Gross margin 61.5% 60.7% +80bps
Adjusted operating GBP10.9
profit(1) million GBP9.6 million +13.5%
Adjusted profit before GBP10.3
tax(2) million GBP9.1 million +13.2%
Adjusted earnings
per share(3) 4.24p 3.67p +15.5%
Interim dividend 1.0p 0.75p +33.3%
Net debt(4) GBP28.4 GBP31.0 GBP2.6
million million million
Statutory Measures
GBP10.4 GBP10.1
Operating profit million million +3.0%
GBP10.1
Profit before tax million GBP9.1 million +11.0%
Basic earnings per
share 4.12p 3.67p +12.2%
Financial Highlights
-- Total sales growth of 3.8%, with like-for-likes
sales ahead by 4.7%
-- Gross margin increased to 61.5% (2015: 60.7%)
driven by increased direct sourcing, product
exclusivity and new product introductions
-- Adjusted EPS growth of 15.5% year on year
(2015: 14%)
-- Net debt reduced by GBP2.6 million year on
year to GBP28.4 million
-- Interim dividend increased by 33% to 1.0p
(2015: 0.75p)
Operational Highlights
-- Successful strategy of "Out Specialising the
Specialists" delivers profitable sales growth
-- Multiple initiatives to strengthen Topps'
position as the UK's leading tile specialist
including development of exclusive ranges/brands,
product innovation and exit from non-tile
lines
-- Two key simplification initiatives announced
at year end - exit from the Topps Clearance
format and consolidation of central teams
into our main office in Leicester - now complete
-- Seven new core stores opened (four new sites
and three conversions from the Topps Clearance
format), offset by nine closures (eight from
the exit of the Topps Clearance format)
-- Trade sales increased to 51.0% of total (2015:
48.3%) driven by accelerating "do it for me"
trend and extension of successful trade loyalty
scheme
Current Trading and Outlook
-- The Group has made a strong start to the second
half
-- Like for like sales over the 7 weeks to 21
May 2016 increased by 8.4%(5) (2015: increased
by 6.3%)
Commenting on the results, Matthew Williams, Chief Executive
said:
"Topps has delivered a robust first half performance as our
successful strategy of "out-specialising the specialists" continues
to generate profitable sales growth. Like-for-like sales grew by
4.7% in the period as initiatives to upgrade and rebrand our stores
led more customers to reappraise the Topps brand and shop with us
for the first time. Further improvements are in development and
will be rolled-out in the remainder of the year and beyond.
"The Group has made a strong start to the second half, with
like-for-like sales growth of 8.4%(5) in the first seven weeks of
the period. We are confident our plans to extend the appeal of the
Topps brand have significant further potential and are excited
about the opportunities ahead."
Notes
(1) Adjusted operating profit is adjusted for business
restructuring costs of GBP0.4 million and loss on disposal of
plant, property and equipment of GBP0.1 million. The prior interim
operating profit was adjusted for the gain on a lease surrender of
GBP0.6 million, losses on disposal of plant, property and
equipment, movements in onerous provisions and business
restructuring costs of GBP0.1 million (charge).
(2) Adjusted profit before tax is adjusted for the effect of the
items above plus GBP0.2 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) (2015: GBP0.1 million
non-cash gain),
The prior interim adjusted profit before tax is adjusted for an
increase to the provision for interest charges relating to
historical HMRC corporation tax enquiries of GBP0.5 million.
(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.
(5) Current trading LFL sales growth was impacted by the earlier
Easter in 2016. We estimate this increased LFL sales growth in the
seven week current trading period by c.1.1%
For further information please contact:
Topps Tiles Plc
Matthew Williams, Chief
Executive Officer (24/05/16) 020 7638 9571
Rob Parker, Chief Financial (Thereafter) 0116 282
Officer 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's strategy of "Out Specialising the Specialists" is
continuing to deliver profitable sales growth, enabling the Group
to report a strong first half performance. We have been successful
in growing sales, generating improved gross margins and controlling
costs, and, as a result, growing net margins. The main pillars of
our strategy remain unchanged - 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 all 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 3.8% to GBP108.0
million (2015: GBP104.0 million), with sales on a like-for-like
basis increasing by 4.7%. Analysing like-for-like sales growth by
quarter shows a 4.4% improvement in quarter one and 4.9% growth in
quarter two. We estimate the earlier Easter in 2016 had a small
adverse impact on the second quarter trading results, reducing
like-for-like sales growth by c.0.6%.
Gross margin for the period was 61.5% (2015: 60.7%). The gross
margin for the whole of the prior year was 61.2% and the 30bps
improvement over the interim period is in line with management's
expectations. Gross margin is a key performance 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. A key area of focus is to
continue to offset the impact of higher trade customer mix (which
is at a lower gross margin) by increasing direct sourcing,
exclusivity and new product development.
Operating costs were GBP56.0 million, compared to GBP53.1
million over the same period in the prior year. On an adjusted
basis, (excluding one-off charges as defined in the highlights
section) operating costs were GBP55.6 million, compared to GBP53.5
million in the prior year. The principal drivers of the increased
costs are as follows:
-- An increase in the number of stores trading
(an average of 342 stores vs 336 in the
prior year), inflation and the impact
of increased volumes account for approximately
GBP1.7 million of additional costs;
-- An increase in depreciation costs of GBP0.4
million resulting from greater levels
of investment in the business;
-- A reduction in net marketing costs of
GBP0.3 million; and
-- Employee profit share increased by GBP0.3
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 GBP10.4 million (2015:
GBP10.1 million). On an adjusted basis operating profit was GBP10.9
million (2015: GBP9.6 million), a 13.5% increase year-on-year. The
key driver of this improvement was the increased sales revenue
which generated an additional GBP3.3 million of gross profit,
partly offset by an additional GBP2.1 million of adjusted operating
costs, as explained above.
There were no property disposals in the period. In the prior
year there was one property disposal which generated a gain of
GBP0.1 million.
The net interest charge for the Group was GBP0.4 million (2015:
GBP1.0 million). On an adjusted basis (excluding the gains and
charges as defined in note 2), the net interest charge was GBP0.6
million (2015: GBP0.6 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, which generated
a gain in the period of GBP0.2 million (2015: GBP0.1 million gain).
The Group does not apply hedge accounting (as defined by IAS39) to
gains or losses on the forward currency contracts it has in place
and hence this gain is being applied directly to the income
statement rather than being offset against balance sheet reserves.
In the prior year period there was also a movement in the provision
for interest charges relating to historic HMRC corporation tax
enquiries of GBP0.5 million.
Adjusted profit before tax was GBP10.3 million (2015: GBP9.1
million), representing an increase of 13.2% year on year.
When adjusting items are included, the statutory measure of
profit before tax for the Group was GBP10.1 million (2015: GBP9.1
million). Adjusting items are detailed through the interim report
and in the notes to the highlights section and include charges
against the impairment or loss on disposal of plant, property and
equipment, business restructuring charges, onerous lease charges,
and fair value (non-cash) movements in the MTM valuation of forward
currency contracts (as explained in net interest above).
The effective tax rate for the 26 weeks to 2 April 2016 was
20.3% (2015: 21.8%). The expected full year effective tax rate is
20.3% (2015: full year 23.2%).
Basic earnings per share were 4.12p (2015: 3.67p). 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 4.24p
(2015: 3.67p), an increase of 15.5%.
Financial Position
Capital expenditure (excluding freehold acquisitions) in the
period amounted to GBP4.5 million (2015: GBP3.9 million). The
increase year on year has been driven by continued investment into
our store estate - including new openings, refits (including
Clearance store conversions) and our programme of all store
improvements.
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 eight freehold or long leasehold sites
(2015: eight), including one warehouse and distribution facility,
with a total net book value of GBP16.3 million (2015: GBP16.6
million).
There were no freehold site purchases in the period. In the
prior year we completed the purchase of two sites at a cost of
GBP1.2 million.
There were no property disposals in the period. In the prior
year the Group disposed of one property with proceeds of GBP0.6
million.
At the period end cash and cash equivalents for the Group were
GBP11.6 million (2015: GBP14.0 million) and borrowings were GBP40.0
million (2015: GBP45.0 million), giving a net debt position of
GBP28.4 million (2015: GBP31.0 million).
The Group has GBP50.0 million (2015: GBP50.0 million) of loan
facilities in place which are non-amortising and committed to June
2019.
At the period end the Group had GBP27.2 million of inventories
(2015: GBP30.4 million) which represented 121 days cover (2015: 141
days). This reduction reflects a continued focus on working capital
in the business.
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 2 April 2016 is set out in the table below. The source
of data and calculation methods are consistent with those used in
the 2015 annual report.
Results for the 26 weeks ended 2 April 2016
Highlights
26 weeks 26 weeks
to to
2 April 28 March
Financial KPIs 2016 2015
Like-for-like revenue year-on-year 4.7% 5.3%
----------------------------------- -------- ---------
Total sales growth year-on-year 3.8% 6.4%
----------------------------------- -------- ---------
Gross margin 61.5% 60.7%
----------------------------------- -------- ---------
Adjusted operating profit * GBP10.9m GBP9.6m
----------------------------------- -------- ---------
Adjusted profit before tax * GBP10.3m GBP9.1m
----------------------------------- -------- ---------
Net debt GBP28.4m GBP31.0m
----------------------------------- -------- ---------
Adjusted earnings per share
* 4.24p 3.68p
----------------------------------- -------- ---------
Stock days 121 141
----------------------------------- -------- ---------
26 weeks 26 weeks
to to
2 April 28 March
Non Financial KPIs 2016 2015
----------------------------------- -------- ---------
Net Promoter Score ** 69% 62%
----------------------------------- -------- ---------
Number of stores at period end 342 340
----------------------------------- -------- ---------
Note - market share is calculated on an annual basis so there is
no update at the interim stage. As at year end September 2015 the
share of the overall UK tile market (domestic & commercial
sectors) was estimated at 18%.
* As explained on page 1 in notes 1-3
** Net Promoter Score is calculated based on customer feedback
to the question of how likely they are to recommend Topps Tiles to
friends or colleagues. The scores are based on a numerical scale
from 0-10 which allows customer to be split into promoters (9 -10),
passives (7-8) and detractors (0-6). The final score is based on
the percentage of promoters minus the percentage of detractors.
Prior year comparative data has been restated to include on-line
responses.
Dividend
The Board is pleased to declare an increased interim dividend of
1.0 pence per share (2015: 0.75 pence per share). The shares will
trade ex-dividend on 9 June 2016 and the dividend will be paid on
15 July 2016 to shareholders on the register at 10 June 2016.
Strategic & Operational Review
The primary goal for the business is to generate profitable
sales growth and our strategy to achieve this is one of "Out
Specialising the Specialists". This is focused on being the UK's
leading tile specialist, delivering outstanding value to our
customers, across the following areas:
Range - as the leading specialist in its market Topps has the
most comprehensive and up-to-date range of quality tiles in the UK,
with over 50 new tile ranges launched in the last year. Our focus
on innovation also enables us to keep one step ahead of our
customers' increasingly adventurous tastes. During the first half,
the Group continued to strengthen its specialist focus, building
range authority through:
-- Further development of our own brand exclusive ranges which
lead the market on design trends and product innovation and which
in many cases have been enabled through close supplier
collaboration. Wood and stone effect porcelain, large format tiles,
and patterned floor tiles have all been successful areas of
growth.
-- Performance of new tile ranges remains strong at 8.7% of overall sales.
-- Extending the application of our range with the introduction
of the "Spaces(TM)" indoor/outdoor range. Spaces(TM) is a
collection of tiles manufactured with the latest inkjet technology
to create marble, stone and wood effect tile options. The outdoor
version of the tile uses unique Serafoam(R) technology to create a
40mm thick lightweight, easy to lay product which enables a
seamless flow for the customer's indoor and outdoor floor space.
This range is unique in the UK and exclusive to Topps.
-- We have decided to exit the wood flooring category and will
complete this process over the second half of the year. This will
enable us to focus fully on our core tile specialism, free up space
in-store and increase resources for tile product development.
Convenience - convenience for our customer means Topps
delivering a seamlessly integrated shopping experience across all
available channels - stores, online, 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 shopping journey with us. At
the start of the current financial year we had a total of 347
stores. During the first half we opened four new core stores and
closed one core store. As planned, we completed the closure of the
Clearance format during the period, with three stores being
converted to the core format and the remaining eight units being
closed. At the period end the Group was trading from a total of 342
stores (March 2015: 340 stores).
-- We indicated at the start of the year that 2016 would be a
year of refinement and evolution for our Boutique format. We have
13 stores trading (2015: five) and have plans for two new openings
in the second half. Boutique has generated lots of rich learning
which we are applying where relevant to the Core format and we also
believe it has played a very important role in encouraging
customers to re-appraise Topps as a brand. There is increasing
evidence that customers who use Boutique stores to initially
research their projects may ultimately go on to buy either through
their local core format store or online if that is more convenient
for them.
-- The development of our "lab store" concept which showcases
all of our latest thinking and developments in store layout and
merchandising. As a result of this work we are introducing several
of these treatments to all existing stores. We are also applying
the most successful aspects from the lab store concept to all new
store openings. During the period we completed the roll out of new
inspirational wall displays which have replaced third party stands
and will make the full range of products easier for customers to
shop.
-- Our trade channel remains a key focus and allows us to take
advantage of the continued trend towards "do it for me". Our store
teams' relationships with local traders are the key foundation in
building a strong trade business. We have continued our focus on
trade loyalty and our trade rewards programme has grown in
popularity and sophistication. Over the period 15,000 active
traders participated in the scheme and we have extended the range
of rewards available.
Inspiration - we are fanatical about providing market leading
levels of service in order that we can inspire our customers' home
improvement projects, specifically:
-- The Group's online strategy is focussed on making the online
and in-store customer experience as inspirational and seamless as
possible. Our online representation continues to evolve and improve
with new developments driving search efficiency, conversion rate
optimisation and higher average transaction value. We continue to
see good growth in web traffic with visitor number growth of 9%
year on year. Latest research tells us that 75% of our customers
use toppstiles.co.uk at some stage of their journey with us and 50%
will visit our website before visiting our stores. Our online
visualisation tool, which enables customers to view a range of
tiles in a variety of room settings, was completely relaunched last
year and we have developed a series of technological enhancements
over the first half to help create a compelling and inspirational
digital experience.
-- Great customer service remains very much at the core of what
we do because our customers continue to value it highly. This year
we will complete our biggest training programme ever, which
provides colleagues with the skills to deliver a very "natural"
service to our customers and ensure that we extend our lead as the
#1 specialist in our market. At Topps service has always meant
being honest, knowledgeable, and helpful, but never ever pushy.
Over the first half our Net Promoter Score ("NPS") was 69% (2015:
62%). This metric is measured by an independent third party and
based on the data available we believe we perform within the top
five of UK retailers.
The combination of these strategic initiatives creates a clear
competitive advantage which we believe will continue to drive
further profitable sales growth.
Risks and Uncertainties
The Board continues to monitor the key risks and uncertainties
of the Group and does not consider that there has been any material
change to those documented in the 2015 Annual Report and Accounts.
The pending referendum on UK membership of the European Union is
something the Board is cognisant of. Whilst the business is
relatively well insulated from any direct impact of a decision to
leave the European Union, consumer confidence is a key driver of
business performance and the Board is cautious about the potential
impact of EU related-uncertainty on consumer confidence.
Board Composition
The Board comprises an Independent Non-executive Chairman, three
Independent Non-Executive Directors and two Executive Directors. As
such the 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
The Group has made a strong start to the second half. In the
first seven weeks of the second half Group revenues, which are on a
like-for-like basis, increased by 8.4% (2015: increased by 6.3%).
We estimate that the earlier Easter in 2016 increased like-for-like
sales growth in the seven week current trading period by 1.1%.
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 an encouraging start to the second half with
acceleration in like-for-like sales growth in the initial seven
weeks. We are confident our plans to extend the appeal of the Topps
brand have significant further potential and are excited about the
opportunities ahead.
Matthew Williams Rob Parker
Chief Executive Officer Chief Financial Officer
24 May 2016
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
24 May 2016
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 2
April 2016
26 weeks 26 weeks 52 weeks
ended ended ended
2 April 28 March 3 October
2016 2015 2015
GBP'000 GBP'000 GBP'000
Note (Unaudited) (Unaudited) (Audited)
Group revenue - continuing
operations 108,041 104,026 212,221
Cost of sales (41,576) (40,834) (82,319)
------------------------------------ ----- ------------ ------------ ----------
Gross profit 66,465 63,192 129,902
Employee profit sharing (5,713) (5,429) (10,405)
Distribution costs (37,944) (35,588) (76,204)
Other operating expenses (3,024) (2,586) (5,846)
Administrative costs (6,761) (6,644) (13,485)
Sales and marketing costs (2,606) (2,885) (5,079)
Group operating profit 10,417 10,060 18,883
Other gains and (losses) - 81 (23)
Investment revenue 233 93 242
Finance costs (597) (1,132) (2,083)
------------------------------------ ----- ------------ ------------ ----------
Profit before taxation 10,053 9,102 17,019
Taxation 3 (2,044) (1,986) (3,954)
------------------------------------ ----- ------------ ------------ ----------
Profit for the period attributable
to equity holders of
the parent company 8,009 7,116 13,065
------------------------------------ ----- ------------ ------------ ----------
Earnings per ordinary share
-basic 5 4.17p 3.67p 6.75p
-diluted 5 4.15p 3.65p 6.73p
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 2 April 2016
2 April 28 March 3 October
2016 2015 2015
GBP'000 GBP'000 GBP'000
Note (Unaudited) (Unaudited) (Audited)
----------------------------- ----- ------------ ------------ ----------
Non-current assets
Goodwill 245 245 245
Deferred tax asset - - 319
Property, plant and
equipment 48,821 43,334 47,094
----------------------------- ----- ------------ ------------ ----------
49,066 43,579 47,658
----------------------------- ----- ------------ ------------ ----------
Current assets
Inventories 27,231 30,441 27,408
Trade and other receivables 6,202 7,249 8,041
Cash and cash equivalents 11,558 14,024 16,564
----------------------------- ----- ------------ ------------ ----------
44,991 51,714 52,013
----------------------------- ----- ------------ ------------ ----------
Total assets 94,057 95,293 99,671
Current liabilities
Trade and other payables (32,362) (37,852) (33,987)
Current tax liabilities (4,845) (5,032) (5,048)
Provisions for liabilities
and charges (469) (811) (1,736)
Total current liabilities (37,676) (43,695) (40,771)
----------------------------- ----- ------------ ------------ ----------
Net current assets 7,315 8,019 11,242
----------------------------- ----- ------------ ------------ ----------
Non-current liabilities
Bank loans 6 (39,738) (44,632) (44,692)
Deferred tax liabilities (75) (228) -
Provisions for liabilities
and charges (3,674) (2,168) (3,410)
----------------------------- -----
Total liabilities (81,163) (90,723) (88,873)
----------------------------- ----- ------------ ------------ ----------
Net assets 12,894 4,570 10,798
----------------------------- ----- ------------ ------------ ----------
Equity
Share capital 9 6,487 6,456 6,457
Share premium 1,914 1,898 1,906
Own shares (2,637) (1,160) (630)
Merger reserve (399) (399) (399)
Share-based payment
reserve 3,299 2,010 2,820
Capital redemption
reserve 20,359 20,359 20,359
Retained earnings (16,129) (24,594) (19,715)
Total funds attributable
to equity holders
of the parent 12,894 4,570 10,798
----------------------------- ----- ------------ ------------ ----------
Condensed Consolidated Statement of Changes in Equity
For the 26 weeks ended 2 April 2016 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
03 October
2015 (Audited) 6,457 1,906 (630) (399) 2,820 20,359 (19,715) 10,798
Total
comprehensive
income
for the period - - - - - - 8,009 8,009
Issue of
share capital 30 8 - - (29) - - 9
Dividends - - - - - - (4,366) (4,366)
Own shares
purchased
in the period - - (2,007) - - - - (2,007)
Credit to
equity for
equity-settled
share based
payments - - - - 508 - - 508
Deferred
tax on
share-based
payment
transactions - - - - - - (57) (57)
---------------- -------- -------- -------- -------- ------------ ----------- --------- --------
Balance at
2 April 2016
(Unaudited) 6,487 1,914 (2,637) (399) 3,299 20,359 (16,129) 12,894
---------------- -------- -------- -------- -------- ------------ ----------- --------- --------
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
Dividends - - - - - - (3,087) (3,087)
Own shares
purchased
in the period - - (504) - - - - (504)
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
---------------- -------- -------- -------- -------- ------------ ----------- --------- --------
Condensed Consolidated Statement of Changes in Equity (continued)
For the 53 weeks ended 3 October 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 (28,359) 843
Total
comprehensive
income - - - - - - 13,065 13,065
for the period
Issue of share
capital 2 27 - - - - - 29
Dividends - - - - - - (4,534) (4,534)
Own shares
purchased
in the period - - (504) - - - - (504)
Own shares
issued
in the period - - 530 - - - - 530
Credit to
equity
for
equity-settled
share based
payments - - - - 879 - - 879
Deferred tax
on share-based
payment
transactions - - - - - - 490 490
---------------- -------- -------- -------- -------- ------------ ----------- --------- --------
Balance at
3 October 2015
(Unaudited) 6,457 1,906 (630) (399) 2,820 20,359 (19,715) 10,798
---------------- -------- -------- -------- -------- ------------ ----------- --------- --------
Condensed Statement of Cash
Flows
for the 26 weeks ended 2
April 2016
26 weeks 26 weeks 53 weeks
ended ended ended
2 April 28 March 3 October
2016 2015 2015
GBP'000 GBP'000 GBP'000
(Unaudited) (Unaudited) (Audited)
------------------------------------ ------------ ------------ ----------
Cash flow from operating
activities
Profit for the period 8,009 7,116 13,065
Taxation 2,044 1,986 3,954
Finance costs 597 1,132 2,083
Investment revenue (233) (93) (242)
Other (gains)/losses - (81) 23
------------------------------------ ------------ ------------ ----------
Group operating profit 10,417 10,060 18,883
Adjustments for:
Depreciation of property,
plant and equipment 2,812 2,461 5,243
Impairment of property,
plant and equipment 77 47 432
Share option charge 508 69 1,409
Business simplification
costs - - 2,619
(Increase)/decrease in trade
and other receivables 1,841 (1,446) (2,125)
Decrease/(increase) in inventories 177 (2,595) 438
(Decrease)/increase in payables (2,437) 2,105 (2,680)
------------------------------------ ------------ ------------ ----------
Cash generated by operations 13,395 10,701 24,219
Interest paid (440) (1,342) (1,882)
Taxation paid (1,910) (1,762) (3,882)
------------------------------------ ------------ ------------ ----------
Net cash from operating
activities 11,045 7,597 18,455
Investing activities
Interest received 43 92 127
Purchase of property, plant
and equipment (4,730) (5,223) (12,058)
Proceeds on disposal of
property, plant and equipment - 592 512
Purchase of own shares (2,007) (504) (504)
------------------------------------ ------------ ------------ ----------
Net cash used in investment
activities (6,694) (5,043) (11,923)
Financing activities
Dividends paid (4,366) (3,087) (4,534)
Proceeds from issue of share
capital 9 20 29
Repayment of bank loans (5,000) (5,000) (5,000)
Loan issue costs - (10) (10)
Net cash used in financing
activities (9,357) (8,077) (9,515)
Net decrease in cash and
cash equivalents (5,006) (5,523) (2,983)
------------------------------------ ------------ ------------ ----------
Cash and cash equivalents
at beginning of period 16,564 19,547 19,547
------------------------------------ ------------ ------------ ----------
Cash and cash equivalents
at end of period 11,558 14,024 16,564
------------------------------------ ------------ ------------ ----------
1. General information
The interim report was approved by the Board on 24(th) May 2016.
The financial information for the 26 weeks ended 2 April 2016 has
been reviewed by the company's auditor. Their report is included
within this announcement. The financial information for the 53 week
period ended 3 October 2015 has been based on information in the
audited financial statements for that period.
The comparative figures for the 53 week period ended 3 October
2015 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 53 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 2 April 2016 and the comparative
period has been prepared for the 26 weeks ended 28 March 2015.
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 53 weeks
ended ended Ended
2 April 28 March 3 October
2016 2015 2015
GBP'000 GBP'000 GBP'000
(Unaudited) (Unaudited) (Audited)
------------------------------ ------------ ------------ ----------
Current tax - charge for
the period 1,706 1,986 3,946
Current tax - adjustment
in respect of previous
periods - - 103
Deferred tax - effect of
reduction in UK corporation
tax rate (76) - -
Deferred tax - charge /
(credit) for the period 414 - (158)
Deferred tax - adjustment
in respect of previous
periods - - 63
2,044 1,986 3,954
------------------------------ ------------ ------------ ----------
4. Interim dividend
An interim dividend of 1.00p (2015: 0.75p) per ordinary share
has been declared payable on 15 July 2016 to shareholders on the
register at 10 June 2016; in accordance with IFRS the dividend will
be recorded in the financial statements in the second half of the
period. A final dividend of 2.25p per ordinary share was approved
and paid in the period, in relation to the 53 week period ended 3
October 2015.
5. Earnings per share
Basic earnings per share for the 26 weeks ended 2 April 2016
were 4.17p (2015: 3.67p) having been calculated on earnings (after
deducting taxation) of GBP8,009,000 (2015: GBP7,116,046) and on
ordinary shares of 192,055,438 (2015: 193,675,300), being the
weighted average of ordinary shares in issue during the period.
Diluted earnings per share for the 26 weeks ended 2 April 2016
were 4.15p (2015: 3.65p) having been calculated on earnings (after
deducting taxation) of GBP8,009,000 (2015: GBP7,116,046) and on
ordinary shares of 193,057,423 (2015: 194,715,418), being the
weighted average of ordinary shares in issue during the period.
Adjusted earnings per share for the 26 weeks ended 2 April 2016
were 4.29p (2015: 3.67p) having been calculated on adjusted
earnings after tax of GBP8,235,477 (2015: GBP7,101,469) being
earnings (after deducting taxation) of GBP8,009,000 adjusted for
the post-tax impact of the following items; forward currency
contracts fair value gain of GBP150,240 (2015: gain GBP16,296),
impairment of property, plant and equipment of GBP61,310 (2015:
GBP47,447), a net charge impact of onerous lease provision
reductions and restructuring costs of GBP315,407 (2015: GBP33,263
net credit).
6. Bank loans
26 weeks 26 weeks 53 weeks
ended ended ended
2 April 28 March 3 October
2016 2015 2015
GBP'000 GBP'000 GBP'000
(Unaudited) (Unaudited) (Audited)
------------------------------ ------------ ------------ ----------
Bank loans (all sterling) 39,622 44,516 44,576
------------------------------ ------------ ------------ ----------
The borrowings are repayable
as follows:
On demand or within one - - -
year
In the second to fifth
year 40,000 45,000 45,000
------------------------------ ------------ ------------ ----------
40,000 45,000 45,000
Less: total unamortised
issue costs (378) (484) (424)
------------------------------ ------------ ------------ ----------
39,622 44,516 44,576
Issue costs to be amortised
within 12 months 116 116 116
------------------------------ ------------ ------------ ----------
Amount due for settlement
after 12 months 39,738 44,632 44,692
------------------------------ ------------ ------------ ----------
The Group now has in place a GBP50.0 million committed revolving credit
facility, expiring 1 June 2019. As at the financial period end GBP40.0
million of this facility was drawn, with a further GBP10.0 million of
undrawn financing available. The loan facility contains financial covenants
which are tested on a biannual basis.
At 2 April 2015, the Group had available GBP10 million (2015: GBP5 million)
of undrawn committed banking facilities.
7. Contingent liabilities
The directors are not aware of any contingent liabilities faced
by the Group as at 2 April 2016.
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 2 April 2016
amounted to GBP6,487,000 (28 March 2015: GBP6,456,000). The Group
issued 897,492 shares during the period increasing the number of
shares from 193,700,459 to 194,597,951.
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 9.9%
shareholding (19,343,950 ordinary shares) in the Group's issued
share capital (2015: 10.45% shareholding of 20,243,950 ordinary
shares).
At 2 April 2016 S.K.M Williams was the landlord of three
properties leased to Multi Tile Limited, a trading subsidiary of
Topps Tiles Plc, for GBP106,000 (2015: four properties for
GBP230,000) per annum.
No amounts were outstanding with S.K.M. Williams at 2 April 2016
(2015: 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
26 week period ended 2 April 2016 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.
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 26 week period ended 2
April 2016 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
24 May 2016
This information is provided by RNS
The company news service from the London Stock Exchange
END
IR UOSVRNRAVUAR
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May 24, 2016 02:00 ET (06:00 GMT)
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