Topps Tiles Annual Report 2001

Plain-text annual report

55265_F&B 12/9/01 7:16 pm Page 1 ANOTHER BIG Y E AR T o p p s T i l e s P l c A n n u a l R e p o r t a n d A c c o u n t s 2 0 0 1 Rushworth House, Wilmslow Road, Handforth, Wilmslow, Cheshire SK9 3HJ. Telephone 01625 446 700 Facsimile 01625 446 800 www.ToppsTiles.co.uk Topps Tiles Plc Topps Tiles Plc Annual Report and Accounts 2001 55265_2&3 12/9/01 7:50 pm Page 1 55265_2&3 12/9/01 7:50 pm Page 2 BIG RESULTS Summary of Results and Financial Highlights This is the fourth consecutive year since ﬂotation, in which our ﬁnancial results have shown signiﬁcant growth. More new stores, a growing brand awareness and a strong performance by staff have combined to drive the business forward. •Turnover up 19.2% ................now £74.6m. •Gross proﬁt up 20.2%............now £41.1m. •Proﬁt before tax up 17.4%.......now £9.4m. •Earnings per share up 13.0%...now 14.8p. •Like-for-like sales growth..............of 5.3%. 3 55265_4&5 12/9/01 7:45 pm Page 1 Joint Statement by the Chairman and Chief Executive Financial Results At the period end cash balances for the Group were £2.2m We are pleased to announce another strong set of ﬁnancial and long term bank loans were £2.7m. results showing considerable growth for the year. Topps Tiles achieved a 17.4% increase in proﬁt before tax to Dividend £9.414 million, from £8.018 million in 2000, with a 19.2% With sales for the current trading year indicating continued increase in turnover to £74.642 million from £62.614 million growth, the Board is recommending a ﬁnal dividend of last year. Our gross proﬁts increased 20.2% to £41.090 3.85p. The dividend will be paid on 1st October 2001 to all million and sales for the period were 5.3% ahead on a like- shareholders on the register as at 7th September 2001. for-like basis. The total dividend for the year is 5.00p per share against 4.33p for 2000, an increase of over 15%. Whilst gross margins for the year overall were slightly ahead of those for the same period last year (55.0% Operational Review compared with 54.6% last year), we had budgeted for an The Group has made signiﬁcant progress this year in what increase in gross margin in the second half of the year, but has been a busy and exciting time. We have further as announced on 13 July 2001, this did not come through. strengthened our position as the UK’s largest ceramic tile Whilst we continued to enjoy strong margins on tile sales, specialist. The Company has continued to expand across we did experience competitive pressures on our wood the UK, opening a total of 22 new stores and closing two ﬂooring products. We started to increase margins on our during the year. This gives us a total of 147 trading outlets, tile sales in the second half, but due to the relatively slow comprising 121 Topps Tiles stores and 26 Tile Clearing stock turn in our industry, such margin improvements did House stores, further strengthening our leading position in not ﬂow through during the second half. These gains that the UK market. we had expected in the second half are now starting to ﬁlter through and we expect this to continue to grow steadily In June 2001 we opened our ﬁrst store in Holland as a pilot, during this new ﬁnancial year. Earnings per share to evaluate the market potential in mainland Europe. It is increased by 13.0% to 14.8p compared to 13.1p in 2000. difﬁcult at this early stage to draw any long-term Capital expenditure, excluding freehold property, amounted home improvement retailer MFI, that gives us an to £4.1m. This reﬂects the cost of ﬁtting 25 new stores at a opportunity to take space in their stores. Our ﬁrst in-store cost of £1.8m (only 22 open and trading in the period) and Tile Studio by Topps opened in December 2000 and we the refurbishment of a further 28 stores at a cost of £1.2m. anticipate rolling out another four concessions this ﬁnancial We have also updated our store EPoS system at a cost of year, giving us an increased penetration into the home conclusions. We have also entered into an agreement with £0.6m. improvements market. This is an exciting opportunity and sales to date have been promising. It is an addition to our During the year we acquired two freehold properties and core business that we will monitor closely. developed a further site at a total cost of £1.3m. We also disposed of one freehold property with proceeds of £0.8m Stock levels have reduced from 205 days cover in May which gave a surplus over net book value of £0.3m. The 2000 to 187 days cover at the period end, which reﬂects Group currently owns twelve freehold properties with a net the continued efforts to achieve efﬁciencies in our stock book value of £4.3m. management. 4 55265_4&5 12/9/01 7:45 pm Page 2 Current Trading and Prospects The ceramic tile market remains buoyant and is forecast to grow further. Like for like sales for the ﬁrst seven weeks of the current year are 11% ahead of last year with total sales up 20%. We will continue our expansion across the UK, where our BIG NEWS target is for a total of over 350 outlets, and we plan to open We are conﬁdent that we are well positioned to continue to 24 new outlets during the course of the next ﬁnancial year. increase both our market share and proﬁtability. Our We will assess the results of both the new store in Holland history of strong ﬁnancial performance and our ability to and the MFI concessions to determine our future strategy grow market share in an expanding market should enable in these two new areas. us to grow signiﬁcant shareholder value. Stuart Williams, Chairman Barry Bester, Chief Executive 55265_6&7 12/9/01 7:43 pm Page 1 Group Strategy THE BIG FOUR Our success has been founded on four crucial 3. Stock Availability cornerstones: 1. Customer Service Each store has a huge number of lines in stock, with replenishments arriving twice a week from our central warehouses. 80% of our products are imported directly Customer service is a subject we take very seriously from factories in Spain, Italy, Portugal and other countries indeed. All staff attend an induction course at our very own around the world. Long-standing relationships with our training centre where they learn our friendly and helpful suppliers, ensure we maintain good stock availability. approach to customer service, along with product range and technical knowledge. Being able to offer correct advice 4. Store Layout and assistance is crucial to gaining customer conﬁdence. All stores are clearly identiﬁed with bright, eye-catching exterior signage bearing the Topps Tiles or Tile Clearing In-store, we have a wide range of services to help House branding. Store interiors are laid out in a mini- customers choose the right product and achieve the best warehouse style with a huge choice of products results. Plus, our tailor-made decor service from our merchandised with colourful displays and informative Leicester-based kiln ﬁring facility allows us to offer a much point-of-sale. wider variety of designs than our competitors. For our customers’ convenience, most of our stores trade information clearly displayed. The stores are customer-friendly with product and pricing 7 days-a-week from 8.00am to 6.00pm, with a number of larger stores open till 8.00pm. 2. Store Locations Our stores in the main are not located on traditional high streets or retail parks, but in less expensive yet highly visible locations on or close to busy roads. Our average store size is around 6,000 square feet and virtually all have on-site parking areas. 55265_6&7 12/9/01 7:43 pm Page 2 A selection of Topps customer comments 55265_8&9 12/9/01 7:46 pm Page 1 Brand Developments - Topps Tiles Traditionally, the UK has had a very low usage per capita of We have now used that very same medium to promote ceramic tiles compared to our European neighbours. This Topps’ brand values to more consumers than ever before. trend is now changing with tiles becoming more popular. A distinctive 10-second TV commercial featuring our famous ‘tile man’ ran in the Granada region covering all our The reason for the continued growth in the market can be north-west stores. attributed to many things, including an increase in travel to countries such as Spain, Italy and Germany where usage This was in addition to a major sponsorship initiative, which of tiles is up to 6 times greater per individual. The saw Topps linked to a home makeover slot on the daytime growing number of home-improvement programmes ITV network favourite ‘This Morning’, featuring Richard on TV, such as ‘Changing Rooms’ have also created a and Judy. This considerable investment has reaped great deal of interest in our products. rewards in vastly increased brand awareness and footfall. 8 55265_8&9 12/9/01 7:46 pm Page 2 BIG IDEAS 55265_10&11 12/9/01 7:22 pm Page 1 55265_10&11 12/9/01 7:23 pm Page 2 A BIG HIT Brand Developments - Tile Clearing House Tile Clearing House has become a tile brand in its own right, targeted at a different sector of the market to Topps. Its customers in the main are jobbing builders, small contractors and bulk purchasers. It offers a smaller separate product range including end of lines, discontinued and job lots, but with greater stock levels. Tile Clearing House stores operate from less prominent locations than Topps, mainly in trade areas, but where the two brands trade next to each other, both perform well. In 2001, the number of stores increased from 18 to 26. Tile Clearing House will continue to beneﬁt from strong advertising campaigns, dominating the local press titles. 11 55265_12&13 12/9/01 7:44 pm Page 1 Our Role in the Community BIG IN THE COMMUNITY We have a policy of building local brand awareness of Another worthy cause is the National Asthma Campaign Topps Tiles and Tile Clearing House through involvement (NAC). This is our third year of support for the charity, with young people. which aims to conquer this respiratory disorder affecting over 1 million children in the UK. The NAC was the natural Probably our most well-known community project is our choice of charity for Topps to adopt, as our products help youth sports sponsorship. Providing new kits and to reduce the levels of house dust mites which are one of equipment to juniors in each town where we have a the triggers of asthma attacks. In addition to a cheque for presence, has made Topps Tiles one of the biggest £8,000 donated by Topps, our staff contributed greatly to supporters of youth football in Britain. the cause this year by holding sponsored events which raised a considerable sum. As well as sport, there’s education. Via our quarterly product catalogue, schools can win valuable computer equipment. Since the scheme started, a number of schools have beneﬁted nationwide. Gary Cutts, Project Director, presents Fred Cox, aged 8 and his school Berkswell Primary School, Coventry with brand new computer equipment. 12 55265_12&13 12/9/01 7:45 pm Page 2 55265_14&15 12/9/01 7:47 pm Page 1 Market Prospects BIG OPPORTUNITIES also ﬂourishing. to increase tile sales, while demand for wood ﬂooring is We are constantly looking for new ways to develop the The rooms where ceramic tiles are usually found has business, without compromising on our principles of tight expanded from traditional ‘wet areas’ such as kitchens and cost-management and the ability to maintain strong margins. bathrooms, and now includes halls, cloakrooms and conservatories. As well as the aesthetic appeal of tiles, The ceramic tile market remains buoyant, increasing in consumers are realising that they are probably the most value in 2000 to £351m at manufacturers’ selling prices and cost-effective wall or ﬂoor covering available. is forecast to reach £431m in 2004*. Home improvements are more popular than ever before and DIY is the fastest Fashionable, with a long design life, low maintenance and growing major retail sector in the EU, with British more hygienic than traditional ﬂoor coverings, ceramic tiles consumers taking fourth place in the league table of DIY and wood ﬂooring certainly add value to homes. And as the spend, behind the Danes, Finns and Germans.** demand for them grows, Topps Tiles and Tile Clearing House will be well placed to take advantage of this Adding a second WC has become more popular for many increased demand in the future. owners of older properties and en suite bathrooms are no *Source: AMA Research Market Report 2000 longer regarded as a luxury. Both offer real opportunities **Source: Verdict Report 2001 14 55265_14&15 12/9/01 7:48 pm Page 2 55265_16&17 12/9/01 7:40 pm Page 1 Directors’ Profiles Stuart Williams F.C.A. Chairman (aged 57) Alan McIntosh C.A. Secretary of Audit Committee Senior Non-Executive Director (aged 33) Stuart Williams, a Chartered Accountant, was a founder Chairman of Audit Committee shareholder and Director of Topps Tiles in 1984. He Alan McIntosh qualiﬁed as a Chartered Accountant with became Executive Deputy Chairman and shareholder of Deloitte and Touche and subsequently joined the corporate Multi-Tile in 1987 with responsibility for restructuring the ﬁnance department of Hill Samuel. He is currently the company and introducing turnover and proﬁts-related Finance Director of Punch Group Ltd, the largest incentive schemes. His principal responsibilities are those independent pub company in the UK. He is also a Director of Group Strategy, property and legal matters. In addition, of Wellington Pub Company Plc and Chairman of the he is editor of the company’s in-house magazine and is technology group e-xentric Plc. He joined the board of responsible for the suggestion scheme. Topps Tiles in 1997. Barry Bester Chief Executive (aged 44) Victor Watson C.B.E. Non-Executive Director (aged 72) Barry Bester was a founder shareholder and Director of Member of Audit Committee Topps Tiles in 1984. As Chief Executive he has overall Victor Watson is Chairman of Black i Limited and Chairman of responsibility for the day-to-day operations of the business, Business Link Leeds Ltd. He is also the former Chairman of with particular emphasis on sales and store management. Waddington Plc. He joined the board of Topps Tiles in 1997. He is also responsible for new business development. Rt Hon Michael Jack Privy Councillor, MP Nicholas Ounstead Customer Services and Non-Executive Director (aged 55) Marketing Director (aged 40) Member of Audit Committee Nicholas Ounstead joined Topps Tiles in April 1997. Michael Jack’s business career has seen him in Prior to this he was Marketing Director at Bellegrove management capacities with Proctor & Gamble and Ceramics Plc which is a major supplier to DIY chains Marks & Spencer. In 1987 he became MP for Fylde and by and independent retailers including Topps Tiles. 1990 had begun a ministerial career that saw him serve in He is responsible for customer service training and the DSS, Home Ofﬁce, MAFF and ﬁnally the Treasury as product marketing as well as Chairman of the Health Financial Secretary. Since that time he has maintained and Safety Committee. strong business links via his consultancy work. He joined the board of Topps Tiles in 1999. Andrew Liggett F.C.M.A. Finance Director (aged 39) Andrew Liggett joined Topps Tiles in 1995 as Finance Director. Prior to joining the Group, he worked for Gold Crown Group Limited where he was employed for 10 years, initially as a management accountant and then as Finance Director. He is responsible for the accounting, ﬁnancial control, company secretarial matters, treasury and administration. 16 55265_16&17 12/9/01 7:41 pm Page 2 From left to right: Andrew Liggett, Stuart Williams, Mr Topps, Barry Bester, Nicholas Ounstead. 55265_P18 53 12/9/01 7:17 pm Page 1 DIRECTORS & ADVISORS DIRECTORS S.K.M. Williams F.C.A. Chairman B.F.J. Bester Chief Executive A. Liggett F.C.M.A. Finance Director N.D. Ounstead Customer Services and Marketing Director W.A. McIntosh C.A. Senior Non-Executive Director V.H. Watson C.B.E. Non-Executive Director The RT. Hon. J.M. Jack, Privy Counsellor, MP Non-Executive Director SECRETARY A. Liggett F.C.M.A. REGISTERED NUMBER 3213782 REGISTERED OFFICE Rushworth House Wilmslow Road Handforth Cheshire SK9 3HJ 18 AUDITORS Arthur Andersen Bank House 9 Charlotte Street Manchester M1 4EU BANKERS HSBC Bank Plc 56 Queen Street Cardiff CF1 4PX REGISTRARS Capita IRG Plc Balfour House 390 - 398 High Road Ilford Essex IG1 1BR SOLICITORS TLT Solicitors Bush House 72 Prince Street Bristol BS99 7JZ Sinclair Abson Smith 30 Greek Street Bank House Stockport SK3 8AD STOCKBROKERS SG Securities (London) Limited Exchange House Primrose Street Broadgate London EC2A 2DD 55265_P18 53 12/9/01 7:17 pm Page 2 DIRECTORS’ REPORT for the period ended 2 June 2001 The directors present their report on the affairs of the Group, together with the accounts and auditors’ report, for the period ended 2 June 2001. Principal activity and business review Share capital The principal activity of the Group comprises the retail and Details of the Company’s authorised and issued share capital wholesale distribution of ceramic tiles, wood ﬂooring and related are shown in note 19 to the accounts. products. Details of the Group’s performance during the period and expected future developments are contained in the Joint Supplier payment policy Statement by the Chairman and Chief Executive on pages 4 to 5 The Group’s policy is to settle terms of payment with suppliers of the report and accounts. when agreeing the terms of each transaction, ensuring that suppliers are made aware of the terms of payment and that both Results and dividends parties abide by those terms. The audited accounts for the period ended 2 June 2001 are set The effect of the Group’s negotiated payment policy is that trade out on pages 25 to 50. The Group’s proﬁt for the period, after creditors at the period end represented 66 days purchases taxation was £6,547,000. (2000 - 80 days). An interim dividend of 1.15 pence per share (£515,000) was Charitable and political contributions paid on 28 February 2001. During the period the Group made charitable donations of £50,000 to "Help a London Child Charity" and £8,000 to "The The directors recommend a ﬁnal dividend of 3.85 pence per National Asthma Campaign". The Group made no political share (£1,725,000) making a total of £2,240,000 for the period contributions. ended 2 June 2001. Subject to approval by the shareholders at the Annual General Meeting to be held on 11 September 2001, Substantial shareholdings the ﬁnal dividend will be paid on 1 October 2001 to In addition to the directors’ shareholdings noted on page 32, shareholders on the register at the close of business on on 2 June 2001 the Company had been notiﬁed, in accordance 7 September 2001. Directors with Sections 198 to 208 of the Companies Act 1985, of the following interests in 3% or more of its issued share capital. The directors of the Company are as follows: Chase Nominees Limited S.K.M. Williams Chairman (including Client account) B.F.J. Bester Chief Executive Littledown Nominees Limited A. Liggett Finance Director HSBC Global Custody N.D. Ounstead Customer Services & Marketing Director Nominee (UK) Limited W.A. McIntosh Senior Non-Executive Director Stanlife Nominees Limited V.H. Watson Non-Executive Director RBSTB Nominees Limited J.M. Jack Non-Executive Director Arnold and S. Bleichroeder Their interests in the shares of the Company are set out in note 4(c) to the accounts. Number 5,803,700 % held 13.0% 3,580,000 3,251,514 3,198,293 2,503,961 2,256,313 8.0% 7.3% 7.1% 5.6% 5.0% 19 55265_P18 53 12/9/01 7:17 pm Page 3 DIRECTORS’ REPORT Disabled employees Auditors Applications for employment by disabled persons are always The directors will place a resolution before the annual general fully considered, bearing in mind the aptitudes of the applicant meeting to reappoint Arthur Andersen as auditors for the concerned. In the event of members of staff becoming disabled ensuing period. every effort is made to ensure that their employment with the Group continues and that appropriate training is arranged. It is the policy of the Group that the training, career development By order of the Board, and promotion of disabled persons should, as far as possible, A. Liggett, Secretary be identical with that of other employees. 17 August 2001 Employee consultation The Group places considerable value on the involvement of its Rushworth House employees and has continued to keep them informed on Wilmslow Road matters affecting them as employees and on the various factors Handforth affecting the performance of the Group. This is achieved through formal and informal meetings and the company Cheshire SK9 3HJ magazine. Employee representatives are consulted regularly on a wide range of matters affecting their current and future interests. Share option schemes The directors recognise the importance of motivating employees and believe that one of the most effective incentives is increased employee participation in the Company through share ownership. During the period, the Company has introduced a further employee Sharesave Scheme. The directors intend to introduce another Sharesave Scheme in the new ﬁnancial period. 20 55265_P18 53 12/9/01 7:17 pm Page 4 CORPORATE GOVERNANCE STATEMENT In June 1998 the Hampel Committee and the London Stock Dialogue with institutional shareholders Exchange published the Combined Code on corporate The directors seek to build on a mutual understanding of governance. This combines the Cadbury Code on corporate objectives between the Company and its institutional governance, the Greenbury Code on directors’ remuneration shareholders by making annual presentations and and new requirements arising from the ﬁndings of the Hampel communicating regularly throughout the year. Committee. Maintenance of a sound system of internal control Statement of compliance with the Code of Best Practice The board has applied Principle D.2 of the Combined Code by The Company has complied throughout the period with the establishing a continuous process for identifying, evaluating and Provisions of the Code of Best Practice set out in section 1 of managing the signiﬁcant risks the group faces. The board the Combined Code except for code provisions A1.2, A1.3, A5.1 regularly reviews the process, which has been in place from the and A6.1. The board considers this non-compliance with the start of the year to the date of the approval of this report and Combined Code to be justiﬁed in view of the size of the Group which is in accordance with Internal Control: Guidance for and in this respect supports the recommendations of the City Directors on the Combined Code published in September 1999. Group for smaller companies. The Company complies with all The board is responsible for the Group’s system of internal other provisions of the code. control and for reviewing its effectiveness. Such a system is designed to manage rather than eliminate the risk of failure to Code Provision D.3.1 requires the members of the audit achieve business objectives and can only provide reasonable committee to be named in the report and accounts. Mr. W.A. and not absolute assurance against material misstatement McIntosh (Chairman), Mr. V.H. Watson and Mr. J.M. Jack have or loss. served on the committee throughout the period. In compliance with Provision D.2.1 of the Combined Code, the Statement about applying the Principles of Good board continuously reviews the effectiveness of the Group’s Governance system of internal control. The board’s monitoring covers all The Company has applied the Principles of Good Governance controls, including ﬁnancial, operational and compliance set out in section 1 of the Combined Code by complying with controls and risk management. It is based principally on the Code of Best Practice as reported above. Further reviewing reports from management to consider whether explanation of how the Principles have been applied in signiﬁcant risks are identiﬁed, evaluated, managed and connection with directors’ remuneration is set out in the controlled and whether any signiﬁcant weaknesses are promptly Remuneration Report. remedied and indicate a need for more extensive monitoring. The board has also performed a speciﬁc assessment for the purpose of this annual report. This assessment considers all signiﬁcant aspects of internal control arising during the period covered by the report including the work of internal audit. The audit committee assists the board in discharging its review responsibilities. 21 55265_P18 53 12/9/01 7:17 pm Page 5 REMUNERATION REPORT for the period ended 2 June 2001 As well as complying with the provisions of the Code as Share incentives disclosed in the Company’s Corporate Governance Statements, Prior to ﬂotation the Group did not have any form of approved or the Company has applied the Principles of Good Governance unapproved executive share incentive arrangements. The share relating to directors’ remuneration as described below. option scheme comprises two parts, the Topps Tiles Plc Remuneration committee approved Executive Share Option Scheme and the Topps Tiles Plc unapproved Executive Share Option Scheme. The scheme The remuneration committee is comprised solely of the three is administered and the grant of options supervised by the independent non-executive directors. remuneration committee. The exercise of options will normally be conditional on the achievement of a speciﬁed performance Statement of remuneration policy and details of target determined by the remuneration committee, who will remuneration have regard to guidelines on share option schemes issued by The Company’s policy on executive director remuneration is as institutional investors. follows: The remuneration of executive directors is determined by the announcement by the Company of its interim or ﬁnal results remuneration committee, whose aim is to reward executive each period, with the exercise price being not less than the directors competitively. The emoluments of directors comprise middle market quotation averaged over the three dealing days a basic salary, executive share options and normal employment immediately preceding the date of the grant. Options may normally only be granted within 42 days of the beneﬁts including corporate contributions towards a pension entitlement. Full details of the remuneration packages of individual directors and information on share options are set out in note 4(b) and The remuneration of non-executive directors is determined by 4(d) to the accounts. the board as a whole, based on outside advice and review of current practices in other companies. Pensions The details of the corporate pension arrangements are explained in note 23(b). Service contracts New service contracts have been entered into by the executive directors on 1 June 2001 for a period of 12 months. 22 55265_P18 53 12/9/01 7:17 pm Page 6 DIRECTORS’ RESPONSIBILITIES Accounts, including adoption of going concern basis Other matters Company law requires the directors to prepare accounts for The directors are responsible for keeping proper accounting each ﬁnancial period which give a true and fair view of the state records which disclose with reasonable accuracy at any time of affairs of the Company and Group and of the proﬁt or loss of the ﬁnancial position of the Company and Group and to enable the Group for that period. them to ensure that the accounts comply with the Companies Act 1985. They are also responsible for safeguarding the assets After making enquiries, the directors have a reasonable of the Company and Group and hence for taking reasonable expectation that the Company and the Group have adequate steps for the prevention and detection of fraud and other resources to continue in operational existence for the irregularities. foreseeable future. For this reason they continue to adopt the going concern basis in preparing the accounts. In preparing the accounts the directors are required to select suitable accounting policies and then apply them consistently; make judgements and estimates that are reasonable and prudent; and state whether applicable accounting standards have been followed, subject to any material departures disclosed and explained in the accounts. 23 55265_P18 53 12/9/01 7:17 pm Page 7 AUDITORS’ REPORT Independent Auditors' Report to the Shareholders of Topps Tiles Plc: We have audited the accounts of Topps Tiles Plc for the period ended 2 June 2001 which comprise the Proﬁt and Loss Account, the Balance Sheet, the Cash Flow Statement and the related Notes numbered 1 to 23. These accounts have been prepared under the accounting policies set out therein. Respective responsibilities of directors and auditors The directors' responsibilities for preparing the Annual Report and the accounts in accordance with applicable law and United Kingdom accounting standards are set out in the Statement of Directors' Responsibilities. Our responsibility is to audit the accounts in accordance with relevant legal and regulatory requirements, United Kingdom Auditing Standards and the Listing Rules of the Financial Services Authority. We report to you our opinion as to whether the accounts give a true and fair view and are properly prepared in accordance with the Companies Act 1985. We also report to you if, in our opinion, the Directors’ Report is not consistent with the accounts, if the Company has not kept proper accounting records, if we have not received all the information and explanations we require for our audit, or if information speciﬁed by law or the Listing Rules regarding directors’ remuneration and transactions with the Company and other members of the Group is not disclosed. We review whether the Corporate Governance Statement reﬂects the Company's compliance with the seven provisions of the Combined Code speciﬁed for our review by the Listing Rules, and we report if it does not. We are not required to consider whether the board's statements on internal control covers all risks and controls, or form an opinion on the effectiveness of the Group's corporate governance procedures or its risk and control procedures. We read the other information contained in the Annual Report, including the Corporate Governance Statement, and consider whether it is consistent with the audited accounts. This other 24 information comprises only the Directors' Report, the Joint Statement by the Chairman and Chief Executive and the Corporate Governance Statement. We consider the implications for our report if we become aware of any apparent misstatements or material inconsistencies with the accounts. Our responsibilities do not extend to any other information. Basis of audit opinion We conducted our audit in accordance with United Kingdom Auditing Standards issued by the Auditing Practices Board. An audit includes examination, on a test basis, of evidence relevant to the amounts and disclosures in the accounts. It also includes an assessment of the signiﬁcant estimates and judgments made by the directors in the preparation of the accounts and of whether the accounting policies are appropriate to the circumstances of the Company and of the Group, consistently applied and adequately disclosed. We planned and performed our audit so as to obtain all the information and explanations which we considered necessary in order to provide us with sufﬁcient evidence to give reasonable assurance that the accounts are free from material misstatement, whether caused by fraud or other irregularity or error. In forming our opinion we also evaluated the overall adequacy of the presentation of information in the accounts. Opinion In our opinion the accounts give a true and fair view of the state of affairs of the Company and of the Group at 2 June 2001 and of the Group's proﬁt and cash ﬂows for the period then ended and have been properly prepared in accordance with the Companies Act 1985. Arthur Andersen Chartered Accountants and Registered Auditors Bank House 9 Charlotte Street Manchester M1 4EU 17 August 2001 55265_P18 53 12/9/01 7:17 pm Page 8 CONSOLIDATED PROFIT & LOSS ACCOUNT for the period ended 2 June 2001 Turnover Cost of sales Gross proﬁt Operating expenses - employee proﬁt sharing - other operating expenses Operating proﬁt before exceptional costs - exceptional costs Operating Proﬁt Interest receivable and similar income Interest payable and similar charges Proﬁt on ordinary activities before taxation Tax on proﬁt on ordinary activities Proﬁt on ordinary activities after taxation Dividends Transfer to reserves Earnings per ordinary share - basic - basic adjusted - diluted There are no recognised gains or losses in either period other than the proﬁt for that ﬁnancial period. A statement of movements on reserves is given in note 20. The accompanying notes are an integral part of this consolidated proﬁt and loss account. Note 2 3 5 6 7 8 9 20 10 10 10 2001 £’000 74,642 (33,552 ) 41,090 (2,266 (29,187 ) ) 9,637 - 9,637 84 (307 ) 9,414 (2,867 ) 6,547 (2,245 ) 4,302 14.8p 14.8p 14.6p 2000 £’000 62,614 (28,443 ) 34,171 (1,959 (23,963 ) ) 8,935 (686 ) 8,249 17 (248 ) 8,018 (2,487 ) 5,531 (1,844 ) 3,687 13.1p 14.2p 12.5p 25 55265_P18 53 12/9/01 7:17 pm Page 9 BAL ANCE SHEETS at 2 June 2001 Fixed assets Goodwill Tangible assets Investments Current assets Stocks Debtors Cash at bank and in hand Creditors: Amounts falling due within one year Net current assets Total assets less current liabilities Creditors: Amounts falling due after more than one year Provisions for liabilities and charges Net assets Capital and reserves Called-up share capital Share premium Merger reserve Special reserve Proﬁt and loss account Equity shareholders’ funds Notes 11 12 13 14 15 16 18 19 20 20 20 2001 £’000 302 16,236 - 16,538 17,293 4,678 2,206 24,177 (18,707 ) 5,470 22,008 (2,446 ) (893 ) 18,669 5,601 1,005 ) (399 - 12,462 18,669 Group Company 2000 £’000 320 12,918 - 13,238 15,948 2,945 435 19,328 (16,003 ) 3,325 16,563 (2,716 ) (665 ) 13,182 5,309 112 (399 ) - 8,160 13,182 2001 £’000 - - 14,652 14,652 - 6,613 5,382 11,995 (3,858 ) 8,137 22,789 - - 22,789 5,601 1,005 - 14,917 1,266 22,789 2000 £’000 - - 14,640 14,640 - 2,751 4,758 7,509 (1,494 ) 6,015 20,655 - - 20,655 5,309 112 - 14,917 317 20,655 The accounts on pages 25 to 50 were approved by the board of directors on 17 August 2001 and signed on its behalf by: S.K.M. Williams B.F.J. Bester Directors 17 August 2001 The accompanying notes are an integral part of these balance sheets. 26 55265_P18 53 12/9/01 7:17 pm Page 10 CONSOLIDATED CASH FLOW STATEMENT for the period ended 2 June 2001 Net cash inﬂow from operating activities Returns on investments and servicing of ﬁnance Taxation Capital expenditure Acquisition and disposals Equity dividends Cash inﬂow (outﬂow) before ﬁnancing Financing Increase (decrease) in cash in the period The accompanying notes are an integral part of this consolidated cash ﬂow statement. Notes 22(a) 22(b) 22(c) 22(d) 22(e) 22(f ) 2001 £’000 11,019 (231 ) (2,849 ) (4,834 ) - (1,934 ) 1,171 600 1,771 2000 £’000 7,505 (223 ) ) (1,754 (4,147 ) (219 ) ) (1,489 (327 ) 52 (275 ) 27 55265_P18 53 12/9/01 7:17 pm Page 11 NOTES TO THE ACCOUNTS for the period ended 2 June 2001 1 Accounting policies The principal accounting policies are summarised below. They have all been applied consistently throughout the period and the preceding period: a) Basis of accounting The accounts have been prepared under the historical cost convention and in accordance with applicable accounting standards. b) Basis of consolidation The statutory Group proﬁt and loss account and balance sheet consolidate the accounts of Topps Tiles Plc and its subsidiary undertakings made up to 2 June 2001. The accounts of Topalpha Limited have been consolidated using merger accounting principles. In all other cases subsidiary undertakings have been accounted for using acquisition accounting principles. The results of subsidiaries acquired or sold are consolidated for the periods from or to the date on which control passed. No proﬁt and loss account is presented for Topps Tiles Plc, as permitted by S230 of the Companies Act 1985. The Company’s proﬁt after tax for the period, determined in accordance with the Act, was £3,194,000 (2000 - £1,882,000). c) Financial periods The accounting period ends on the Saturday which falls closest to 31 May, resulting in ﬁnancial periods of either 52 or 53 weeks. d) Goodwill Goodwill arising on the acquisition of subsidiary undertakings and businesses, representing any excess of the fair value of the consideration given over the fair value of the identiﬁable assets and liabilities acquired, is capitalised and written off on a straight line basis over its useful economic life, which is twenty years. Provision is made for any impairment. Goodwill arising on acquisitions in the period ended 30 May 1998 and earlier periods was written off to reserves in accordance with the accounting standard then in force. As permitted by the current accounting standard the goodwill previously written off to reserves has not been reinstated in the balance sheet. On disposal or closure of a previously acquired business, the attributable amount of goodwill previously written off to reserves is included in determining the proﬁt or loss on disposal. e) Turnover Turnover comprises the net amount receivable in respect of sales during the period to third parties and excludes value added tax. 28 55265_P18 53 12/9/01 7:17 pm Page 12 NOTES TO THE ACCOUNTS 1 Accounting policies (continued) f) Tangible ﬁxed assets Tangible ﬁxed assets are stated at cost, net of depreciation and any provision for impairment. Costs, are only those costs, that are directly attributable to bringing the asset into working condition for its intended use. Depreciation is provided to write off the cost of tangible assets over their estimated useful lives as follows: Freehold buildings Short leasehold land and buildings Fixtures and ﬁttings Motor vehicles - - - - 2% per annum on cost over the period of the lease, up to 25 years over 10 years or at 25% per annum on reducing balance basis as appropriate. 25% per annum on reducing balance g) Stocks Stocks are stated at the lower of cost and net realisable value. Cost includes materials and an attributable proportion of distribution overheads based on normal levels of activity. Net realisable value is based on estimated selling price, less further costs expected to be incurred to completion and disposal. h) Taxation Current tax is provided at amounts expected to be paid (or recovered) using the tax rates and laws that have been enacted or substantially enacted by the balance sheet date. Deferred taxation is provided using the liability method on all timing differences only to the extent that they are expected to reverse in the future without being replaced. i) Foreign currency Transactions in foreign currencies are recorded at the rate of exchange at the date of the transaction, or if hedged, at the forward contract rate. Monetary assets and liabilities denominated in foreign currencies at the balance sheet date are reported at the rates of exchange prevailing at that date, or if appropriate at the forward contract rate. Any gain or loss arising from a change in exchange rates subsequent to the date of the transaction is included as an exchange gain or loss in the proﬁt and loss account. j) Leases Assets held under ﬁnance leases and other similar contracts, which confer rights and obligations similar to those attached to owned assets, are capitalised as tangible ﬁxed assets and are depreciated over the shorter of the lease terms and their useful lives. The capital elements of future lease obligations are recorded as liabilities, while the interest elements are charged to the proﬁt and loss account over the period of the leases to produce a constant rate of charge on the balance of capital repayments outstanding. Hire purchase transactions are dealt with similarly, except that assets are depreciated over their useful lives. 29 55265_P18 53 12/9/01 7:17 pm Page 13 NOTES TO THE ACCOUNTS 1 Accounting policies (continued) Rentals under operating leases are charged on a straight-line basis over the lease term, even if the payments are not made on such a basis. Beneﬁts received and receivable as an incentive to sign an operating lease are similarly spread on a straight-line basis over the lease term, except where the period to the review date on which the rent is ﬁrst expected to be adjusted to the prevailing market rate is shorter than the full lease term, in which case the shorter period is used. k) Investments Fixed asset investments are shown at cost less provision for impairment. l) Pension costs For deﬁned contribution schemes the amount charged to the proﬁt and loss account in respect of pension costs is the contributions payable in the year. Differences between contributions payable in the year and contributions actually paid are shown as either accruals or prepayments in the balance sheet. m) Derivative ﬁnancial instruments The Group uses derivative ﬁnancial instruments to reduce exposure to foreign exchange risk. The Group does not hold or issue derivative ﬁnancial instruments for speculative purposes. For a forward foreign exchange contract to be treated as a hedge, the instrument must be related to actual foreign currency assets or liabilities or to a probable commitment. It must involve the same currency or similar currencies as the hedged item and must also reduce the risk of foreign currency exchange movements on the Group’s operations. Gains and losses arising on these contracts are deferred and recognised in the proﬁt and loss account, only when the hedged transaction has itself been reﬂected in the Group’s accounts. If an instrument ceases to be accounted for as a hedge, for example, because the underlying hedged position is eliminated, the instrument is marked to market and any resulting proﬁt or loss recognised at that time. n) Finance costs Finance costs of debt are recognised in the proﬁt and loss account over the term at a constant rate on the carrying amount. Finance costs which are directly attributable to the construction of tangible ﬁxed assets are capitalised as part of the cost of those assets. The commencement of capitalisation begins when both ﬁnance costs and expenditures for the asset are being incurred and activities that are necessary to get the asset ready for use are in progress. Capitalisation ceases when substantially all the activities that are necessary to get the asset ready for use are complete. 30 55265_P18 53 12/9/01 7:17 pm Page 14 NOTES TO THE ACCOUNTS 2 Turnover Turnover and proﬁt before taxation are attributable to one activity, the retail and wholesale distribution of ceramic tiles, wood flooring and related products, and arise within the UK. 3 Operating expenses Distribution costs Administrative expenses Employee proﬁt sharing 2001 £’000 23,545 5,642 2,266 31,453 Included in operating expenses for the period ended 3 June 2000 are exceptional costs of £686,000 (see note 5) 4 Staff costs a) Staff costs Particulars of employees (including directors) are as shown below: Employee costs during the period amounted to: Wages and salaries Social security costs Other pension costs (note 23b) The average monthly number of persons employed by the Group during the period was as follows: Selling Administration 2001 £’000 12,741 1,169 129 14,039 2001 Number employed 800 141 941 2000 £’000 18,600 5,363 1,959 25,922 2000 £’000 8,793 915 200 9,908 2000 Number employed 657 122 779 31 55265_P18 53 12/9/01 7:17 pm Page 15 NOTES TO THE ACCOUNTS 4 Staff costs (continued) b) Directors emoluments The emoluments of the directors of the Company are as follows: Fees Basic salary Taxable beneﬁts Money purchase pension contributions £’000 £’000 £’000 £’000 Total 2001 £’000 Total 2000 £’000 Executive S.K.M. Williams B.F.J. Bester A. Liggett N.D. Ounstead Non-executive W.A. McIntosh V.H. Watson J.M. Jack Aggregate emoluments - - - - 15 15 - 30 120 140 120 90 - - 15 485 18 13 13 10 - - - 54 - 6 5 4 - - - 15 138 159 138 104 15 15 15 584 c) Directors’ interests The directors had the following interests in the shares of the Company: S.K.M. Williams B.F.J. Bester A. Liggett N.D. Ounstead W.A. McIntosh V.H. Watson J.M. Jack 32 2001 Ordinary shares of 12.5p each 5,577,720 5,757,720 500,300 98,700 467,000 37,200 3,000 124 134 121 93 15 15 15 517 2000 Ordinary shares of 12.5p each 5,827,720 5,757,720 500,300 98,700 467,000 40,000 3,000 55265_P18 53 12/9/01 7:17 pm Page 16 4 Staff costs (continued) d) Directors share options Details of directors’ share options are as follows: NOTES TO THE ACCOUNTS Executive S.K.M. Williams B.F.J. Bester A. Liggett A. Liggett N.D. Ounstead N.D. Ounstead Non-executive W.A. McIntosh Granted Exercised At 2nd June 2001 Exercise price At 3rd June 2000 210,000 600,000 420,000 - - - (210,000) (600,000) (420,000) - - - - 300,000 - 300,000 280,000 - (280,000) - - 225,000 - 225,000 Market price at date of exercise 297.5p 297.5p 297.5p Option exercisable from Expiry date - - - - - - - 06/09/03 05/09/07 297.5p - - - 06/09/03 05/09/07 50p 50p 50p 301p 50p 301p 600,000 - (600,000) - 50p 297.5p - - No options lapsed during the year. The market price of the Company’s shares at the end of the period was 329.5p per share and ranged during the period from 246.0p to 350.5p per share. There have been no changes in the directors’ interests in share options subsequent to the end of the period. 33 55265_P18 53 12/9/01 7:17 pm Page 17 NOTES TO THE ACCOUNTS 5 Exceptional costs Discontinued activities Tile City stock acquisition costs 2001 £’000 - - - 2000 £’000 431 255 686 During the period ended 3 June 2000 further bathroom areas were removed from existing Topps Tiles stores. The directors also took the decision to write off unsaleable stock, acquired from the receivers of ‘Tile City’, as part of the total stock purchased. 6 Interest payable Bank loans and overdrafts Finance leases and hire purchase contracts Interest costs capitalised 2001 £’000 307 14 (14 ) 307 2000 £’000 311 8 (71 ) 248 34 55265_P18 53 12/9/01 7:17 pm Page 18 NOTES TO THE ACCOUNTS 7 Proﬁt on ordinary activities before taxation Proﬁt on ordinary activities before taxation is stated after charging (crediting): Depreciation and amounts written off tangible ﬁxed assets - owned - held under ﬁnance leases and hire purchase contracts Amortisation of goodwill Proﬁt on disposal of tangible ﬁxed assets Operating lease rentals - other - plant and machinery Remuneration to auditors - audit services - other services 2001 £’000 1,435 39 18 (344 ) 6,657 391 35 20 2000 £’000 1,070 - 12 (243 ) 5,405 260 32 22 35 55265_P18 53 12/9/01 7:17 pm Page 19 NOTES TO THE ACCOUNTS 8 Tax on proﬁt on ordinary activities The tax charge comprises: Corporation tax Deferred taxation 9 Dividends Under provision in respect of 2000 ﬁnal dividend Interim paid 1.15p (2000 – 1.00p) per ordinary share Final proposed 3.85p (2000 – 3.33p) per ordinary share Total 5.00p (2000 – 4.33p) per ordinary share 2001 £’000 2,639 228 2,867 2001 £’000 5 515 1,725 2,245 2000 £’000 2,117 370 2,487 2000 £’000 - 430 1,414 1,844 36 55265_P18 53 12/9/01 7:17 pm Page 20 NOTES TO THE ACCOUNTS 10 Earnings per share The calculation of earnings per share is based on the earnings for the ﬁnancial period attributable to equity shareholders and the weighted average number of ordinary shares as follows: Weighted average number of shares: For basic earnings per share Weighted average of shares under option Number of shares that would have been issued at fair value For diluted earnings per share 2001 2000 Number of Number of shares shares 44,218,175 42,363,163 2,802,600 2,750,380 (2,219,604 ) (729,129 ) 44,801,171 44,384,414 An adjusted earnings per share ﬁgure has been shown in order to achieve comparability period on period. The calculation uses the basic weighted average number of shares together with basic earnings adjusted to exclude the impact of exceptional items. Proﬁt on ordinary activities after tax Exceptional items Less notional tax Basic Adjusted 2001 £’000 6,547 - - 2000 £’000 5,531 - - 2001 £’000 6,547 - - Proﬁt attributable to equity shareholders 6,547 5,531 6,547 2000 £’000 5,531 686 (206 ) 6,011 37 55265_P18 53 12/9/01 7:18 pm Page 21 NOTES TO THE ACCOUNTS 11 Goodwill Cost Beginning and end of period Depreciation Beginning of period Charge for the period End of period Net book value Beginning of period End of period Total £’000 338 18 18 36 320 302 38 55265_P18 53 12/9/01 7:18 pm Page 22 12 Tangible ﬁxed assets Cost Beginning of period Additions Disposals End of period Depreciation Beginning of period Charge Disposals End of period Net book value Beginning of period End of period NOTES TO THE ACCOUNTS Land and buildings Freehold £’000 Short Leasehold £’000 3,563 1,341 (502 ) 4,402 77 76 (32 ) 121 3,486 4,281 1,023 70 - 1,093 189 150 - 339 834 754 Fixtures and ﬁttings £’000 9,742 3,720 - 13,462 1,382 1,183 - 2,565 8,360 10,897 Motor vehicles £’000 259 260 (202 ) 317 21 65 (73 ) 13 238 304 Total £’000 14,587 5,391 (704 ) 19,274 1,669 1,474 (105 ) 3,038 12,918 16,236 The net book value of tangible ﬁxed assets includes £505,000 (2000 - £308,000) in respect of assets held under hire purchase contracts. Cumulative ﬁnance costs capitalised included in the cost of tangible ﬁxed assets amount to £85,000 (2000 - £71,000). 39 55265_P18 53 12/9/01 7:18 pm Page 23 NOTES TO THE ACCOUNTS 13 Fixed asset investments Beginning of period Additions End of period Company £’000 14,640 12 14,652 During the year Topps Tiles Plc acquired 100% of the ordinary share capital of Topps Tiles Holland BV, an off the shelf Dutch company. Net assets of the company on acquisition were £12,000. The principal subsidiary undertakings are as follows: % of issued shares held Principal activity Topalpha Limited Multi-Tile Limited 100% 100% Property development and investment Retail and wholesale distribution of ceramic tiles, wood ﬂooring and related products With the exception of Topps Tiles Holland BV, all subsidiary undertakings are incorporated in Great Britain and are registered and operate in England and Wales. The investments are represented by ordinary shares. 40 55265_P18 53 12/9/01 7:18 pm Page 24 14 Debtors Amounts falling due within one year: Trade debtors Amounts owed by subsidiary undertaking Other debtors Prepayments and accrued income NOTES TO THE ACCOUNTS Group Company 2000 £’000 547 - 978 1,420 2,945 2001 £’000 - 6,586 12 15 2000 £’000 - 2,721 12 18 6,613 2,751 2001 £’000 619 - 2,473 1,586 4,678 41 55265_P18 53 12/9/01 7:18 pm Page 25 NOTES TO THE ACCOUNTS 15 Creditors: Amounts falling due within one year Group Company Obligations under ﬁnance leases and hire purchase contracts Bank loans and overdraft (note 17) Trade creditors Other creditors Corporation tax Proposed dividend Accruals and deferred income 16 Creditors: Amounts falling due after more than one year Obligations under ﬁnance leases and hire purchase contracts Bank loan 2001 £’000 175 285 2000 £’000 260 281 10,799 10,317 3,235 1,488 1,725 1,000 1,093 1,698 1,414 940 18,707 16,003 2001 £’000 - - 19 2,083 7 1,725 24 3,858 2001 £’000 9 2,437 2,446 Group 2000 £’000 - - 32 - 9 1,414 39 1,494 2000 £’000 15 2,701 2,716 The maturity proﬁle of the Group’s loans, ﬁnance leases and hire purchase contracts is presented in note 17. 42 55265_P18 53 12/9/01 7:18 pm Page 26 NOTES TO THE ACCOUNTS 17 Derivatives and other ﬁnancial instruments The Group holds ﬁnancial instruments to ﬁnance its operations, and to manage interest rate and currency risks arising from its operations. Consequently the main risks arising from the Group’s operations are liquidity risk, interest rate risk and currency risk. Liquidity risk The Group’s objective is to maintain continuity of funding through the use of retained proﬁts and medium to long term borrowings. The maturity proﬁle of the Group’s borrowings are detailed in section (c) of this note. Interest rate risk The Group’s objective is to manage the exposure to interest rate ﬂuctuations whilst trying to minimise the cost of capital of the Group. Given the recent underlying downward trend in long term interest rates, the board has chosen not to adopt any ﬁxed rates, as it believes that interest rates will continue to fall in the foreseeable future. Currency risk The Group has transactional currency exposures which arise from purchases by subsidiary undertakings in currencies other than the functional currency of the Group. The Group’s policy is to periodically use forward contracts to hedge those transactions to eliminate any signiﬁcant currency exposure. The frequency and amount hedged is decided by the board and depends upon the magnitude of the exposure and volatility of the currency involved. The numerical disclosures in this note deal with ﬁnancial assets and ﬁnancial liabilities as deﬁned in Financial Reporting Standard 13 "Derivatives and other ﬁnancial instruments: Disclosures" (FRS 13). Certain ﬁnancial assets such as investments in subsidiary and associated companies are also excluded from the scope of these disclosures. As permitted by FRS 13, short term debtors and creditors have been excluded from the disclosures, other than the currency disclosures. 43 55265_P18 53 12/9/01 7:18 pm Page 27 NOTES TO THE ACCOUNTS 17 Derivatives and other ﬁnancial instruments (continued) a) Interest rate proﬁle The Group has no ﬁnancial assets other than sterling cash deposits of £2,206,000 (2000 - £435,000) which are part of the ﬁnancing arrangements of the Group. The sterling cash deposits comprise deposits placed on money market at call. The interest rate proﬁle of the Group’s ﬁnancial liabilities is as follows: Sterling - Borrowings Loan 1 Loan 2 Loan 3 Total Floating rate 2001 £’000 % 2000 £’000 % 627,000 1.0 324,000 1.0 765,000 1.5 390,000 1.5 1,771,000 1.5 1,827,000 1.5 2,722,000 2,982,000 The interest rate on ﬂoating rate ﬁnancial liabilities indicates the excess over bank base rate. Loans 1 and 2 are secured by ﬁxed charges over the Group’s leasehold property and by ﬂoating charges over all other assets of the Group. Loan 3 is secured by a legal mortgage over the freehold properties and the goodwill of the business. b) Currency exposures The table below shows the Group’s currency exposures; in other words, those transactional exposures that give rise to the net currency gains and losses recognised in the proﬁt and loss account. Such exposures comprise monetary liabilities of the Group that are not denominated in the “functional” currency of the Group. As at 2 June 2001 these exposures were as follows: Functional currency of the Group: Sterling Net foreign currency monetary liabilities 2001 Euro £’000 104 2000 Euro £’000 109 The amounts shown in the tables above take into account the effect of forward contracts entered into to manage these currency exposures. 44 55265_P18 53 12/9/01 7:18 pm Page 28 NOTES TO THE ACCOUNTS 17 Derivatives and other ﬁnancial instruments (continued) c) Maturity of ﬁnancial liabilities The maturity proﬁle of the Group’s ﬁnancial liabilities was as follows: In one year or less In more than one year but not more than two years In more than two years but not more than ﬁve years In more than ﬁve years Total d) Borrowing facilities Hire purchase contracts Loans 2001 £’000 175 9 - - 184 2001 £’000 285 292 849 1,296 2,722 Total 2001 £’000 460 301 849 1,296 2,906 The Group had undrawn committed borrowing facilities, in respect of which all conditions precedent had been met, as follows: Expiring in one year or less Expiring in more than one year but not more than two years Expiring in more than two years Total e) Fair values 2001 £ 9,331 - 730 10,061 Total 2000 £’000 541 287 917 1,512 3,257 2000 £ 3,039 - 673 3,712 There is no material difference between the fair value and book value of the Group’s ﬁnancial assets and liabilities at 2 June 2001. 45 55265_P18 53 12/9/01 7:18 pm Page 29 NOTES TO THE ACCOUNTS 18 Provisions for liabilities and charges Deferred taxation Beginning of period Charged to proﬁt and loss account End of period Group 2001 £’000 665 228 893 2000 £’000 295 370 665 The deferred taxation represents full provision for the excess of the allowances over book depreciation of ﬁxed assets. 19 Called-up share capital Ordinary shares of 12.5p each Authorised Beginning and end of period Allotted, called-up and fully-paid Beginning of period Issue in period End of period Number of shares 2001 £’000 Number of shares 2000 £’000 56,600,000 7,075 56,600,000 7,075 42,476,258 2,328,760 44,805,018 5,309 42,114,175 292 362,083 5,601 42,476,258 5,264 45 5,309 During the period the Company allotted 2,328,760 (2000 - 362,083) ordinary shares with a nominal value of £292,000 (2000 - £45,000) under share option schemes for an aggregate cash consideration of £1,196,000 (2000 - £180,000). 46 55265_P18 53 12/9/01 7:18 pm Page 30 20 Reserves Group Beginning of period Premium on issue of new shares Share issue expenses Retained proﬁt for the period End of period Company Beginning of period Premium on issue of new shares Share issue expenses Retained proﬁt for the period End of period 21 Reconciliation of movements in Group equity shareholders’ funds Proﬁt for the period Dividends paid and proposed Issue of shares (net of expenses) Net addition to shareholders' funds Opening equity shareholders’ funds Closing equity shareholders’ funds NOTES TO THE ACCOUNTS Share Proﬁt and Premium loss account £’000 112 904 (11 ) - 1,005 Special reserve £’000 14,917 - - - Share premium £’000 112 904 ) (11 - 14,917 1,005 £’000 8,160 - - 4,302 12,462 Proﬁt and loss account £’000 317 - - 949 1,266 2001 £’000 6,547 (2,245 ) 1,185 5,487 13,182 18,669 2000 £’000 5,531 (1,844 ) 157 3,844 9,338 13,182 47 55265_P18 53 12/9/01 7:18 pm Page 31 NOTES TO THE ACCOUNTS 22a) Reconciliation of operating proﬁt to operating cash ﬂows Operating proﬁt Depreciation Proﬁt on disposal of ﬁxed assets Goodwill amortisation Increase in stocks Increase in debtors Increase in creditors Net cash inﬂow from operating activities 2001 £’000 9,637 1,474 (344 ) 18 (1,345 (1,113 ) ) 2,692 11,019 2000 £’000 8,249 1,070 (463 ) 12 (2,663 (1,006 ) ) 2,306 7,505 Included within net cash inﬂow from operating activities is an exceptional cash receipt of £2,083,000 (2000 – £Nil) which represents amounts remitted by the directors in respect of PAYE liabilities to be settled in the next ﬁnancial period. 22b) Returns on investments and servicing of ﬁnance Interest received Interest paid Interest element of hire purchase rentals Interest capitalised Net cash outﬂow from returns on investments and servicing of ﬁnance 22c) Capital expenditure Purchase of tangible ﬁxed assets Sale proceeds of tangible ﬁxed assets Net cash outﬂow from capital expenditure 48 2001 £’000 84 (315 (14 14 ) ) (231 ) 2001 £’000 (5,157 ) 323 (4,834 ) 2000 £’000 17 (303 ) ) (8 71 (223 ) 2000 £’000 (5,969 ) 1,822 (4,147 ) 55265_P18 53 12/9/01 7:18 pm Page 32 22d) Acquisitions and disposals Acquisitions 22e) Financing Proceeds from issue of ordinary share capital Expenses in connection with issue of share capital New loans Repayment of loans Capital element of hire purchase rentals Net cash inﬂow from ﬁnancing 22f) Analysis and reconciliation of net debt Cash in hand and at bank Debt due within 1 year Debt due after 1 year Finance leases Net debt Increase (decrease) in cash in the period Cash outﬂow from decrease in debt and ﬁnance leasing Change in net debt resulting from cashﬂows New ﬁnance leases Movements in net debt in the period Net debt at start of period Net debt at end of period NOTES TO THE ACCOUNTS 2001 £’000 - 2001 £’000 1,196 (11 ) 603 (863 (325 ) ) 600 Other non-cash changes £’000 - - - (234 ) (234 ) 2001 £’000 1,771 585 2,356 (234 ) 2,122 (2,822 ) (700 ) 2000 £’000 (219 ) 2000 £’000 180 (23 ) 762 (762 (105 ) ) 52 2001 £’000 2,206 (285 ) (2,437 ) (184 (700 ) ) 2000 £’000 ) (275 105 (170 ) (308 ) (478 ) ) (2,344 (2,822 ) 49 2000 £’000 435 (281 ) ) (2,701 (275 (2,822 ) ) Cash ﬂow £’000 1,771 (4 ) 264 325 2,356 55265_P18 53 12/9/01 7:18 pm Page 33 NOTES TO THE ACCOUNTS 23 Financial commitments a) Capital commitments At the end of the period there were no capital commitments contracted for but not provided for (2000 - £nil) b) Pension arrangements The Group operates separate deﬁned contribution pension schemes for employees and directors. The assets of the schemes are held separately from those of the Group in independently administered funds. The pension cost charge represents contributions payable by the Group to the funds and amounted to £129,000 (2000 - £200,000). The Group wound up its deﬁned beneﬁts pension scheme on 16 May 2001 and has no further liability to the scheme. c) Lease commitments Annual commitments under non-cancellable operating leases are as follows: Operating leases which expire: - within 1 year - within 2 - 5 years - after 5 years 2001 2000 Property £’000 Other £’000 Property £’000 779 1,478 4,599 6,856 92 303 16 411 190 1,181 4,490 5,861 Other £’000 60 157 15 232 During the period the Company received £400,000 (2000 - £220,000) as landlords contributions towards relocation costs. 50 55265_P18 53 12/9/01 7:18 pm Page 34 Turnover Operating proﬁt Proﬁt before taxation Shareholders’ funds Basic earnings per share1 Adjusted basic earnings per share1 Dividend per share1 Dividend cover Average number of employees Share price (period end)1 Notes 1. Adjusted for subdivision of share capital. FOUR YEAR RECORD 1998 £’000 31,274 4,282 4,127 4,166 7.1 p 7.1 p 2.4 3.0 397 193 p 1999 £’000 42,996 6,091 5,828 9,338 9.9 p 9.9 p 3.2 3.0 585 212 p 2000 £’000 62,614 8,249 8,018 13,182 13.1 p 14.2 p 4.3 3.0 779 271 p 2001 £’000 74,642 9,637 9,414 18,669 14.8 p 14.8 p 5.0 2.9 941 330 p 51 55265_P18 53 12/9/01 7:18 pm Page 35 NOTICE OF ANNUAL GENERAL MEETING for the period ended 2 June 2001 Notice is given that the annual general meeting of Topps Tiles Plc will be held at Topps Tiles Plc, Unit D, Mortimer Road Industrial Estate, Narborough, Leicester LE9 5GA on 11 September 2001 at 10.30 am for the following purposes: Ordinary business 1 To receive the accounts for the period ended 2 June 2001 and reports of the directors and auditors on them. 2 To declare a ﬁnal dividend on the ordinary share capital of the Company. 3 To re-appoint Arthur Andersen as auditors of the Company to hold ofﬁce from the conclusion of this meeting until the conclusion of the next general meeting at which accounts are laid before the Company at a remuneration to be ﬁxed by the directors. 4 To re-elect Alan McIntosh as a director. 5 To re-elect Victor Watson as a director. Special business To consider and, if thought ﬁt, to pass the following resolutions of which number 6 will be proposed as an ordinary resolution and number 7 as a special resolution. 6 For the purposes of section 80 of the Companies Act 1985 (the "Act"), the directors be generally and unconditionally authorised, in substitution for any existing authority to allot relevant securities (within the meaning of section 80 of the Act), to exercise all the powers of the Company to allot relevant securities up to an aggregate nominal amount of £1,866,689 provided that this authority shall expire ﬁve years from the date of the passing of this resolution (unless previously revoked, varied or extended by the Company in general meeting), except that the Company may before the expiry of such period make an offer or agreement which would or might require relevant securities to be allotted after the expiry of such period and the directors may allot relevant securities in pursuance of any such offer or agreement as if this authority had not expired. 7 The directors be empowered (pursuant to section 95 of the Act) to allot equity securities wholly for cash pursuant to the authority conferred on them by resolution 6 above as if section 89 (1) of the Act did not apply to any such allotment, provided that such power shall be limited to the allotment of equity securities. 7.1 in connection with a rights issue; and 52 55265_P18 53 12/9/01 7:18 pm Page 36 NOTICE OF ANNUAL GENERAL MEETING 7.2 the allotment (otherwise than pursuant to sub-paragraph 7.1 above) of equity securities up to an aggregate nominal amount of £280,031 and shall expire on the earlier of the conclusion of the next annual general meeting of the Company and the date falling 15 months after the date of the passing of this resolution (unless previously revoked, varied or extended by the Company in general meeting) except that the Company may before the expiry of any power contained in this resolution make an offer or agreement which would or might require equity securities to be allotted after such expiry and the directors may allot equity securities in pursuance of such offer or agreement as if this power had not expired. In this resolution 7: a "rights issue" means an offer of equity securities open for acceptance for a period ﬁxed by the directors to holders of ordinary shares on the register on a ﬁxed record date in proportion to their respective holdings of such shares or in accordance with the rights attached to them (but subject to such exclusions or other arrangements as the directors may deem necessary or expedient in relation to fractional entitlements or in relation to legal or practical problems under the laws of, or the requirements of any regulatory body or any stock exchange in any territory); b the nominal amount of any securities should be taken to be, in the case of a right to subscribe for or convert any securities into shares of the Company, the nominal amount of the shares which may be allotted pursuant to such right; and words or expressions deﬁned in or for the purposes of sections 89-96 inclusive of the Act shall bear the same meanings. By order of the Board Andrew Liggett Secretary 17 August 2001 Registered ofﬁce: Rushworth House Wilmslow Road Handforth Cheshire SK9 3HJ Registered No: 3213782 53 55265_P54 59 12/9/01 7:21 pm Page 1 NOTICE OF ANNUAL GENERAL MEETING Notes 1 Any member of the Company entitled to attend and vote at the annual general meeting may appoint one or more proxies to attend and, on a poll, vote on his or her behalf. A proxy need not be a member of the Company. To be valid, a form of proxy, and any power or authority under which it is signed, must be lodged with the Company’s registrars, Capita IRG Plc, Balfour House, 390/398 High Road, Ilford, Essex, IG1 1BR, no later than 48 hours before the time of the annual general meeting. A form of proxy is enclosed. 2 The completion and return of a form of proxy will not preclude a member from attending and voting at the meeting in person. 3 The following documents are available for inspection by members at the registered ofﬁce of the Company on weekdays (except bank holidays) during normal business hours, and at the place of the meeting but not less than 15 minutes prior to and during the meeting: 3.1 the register of directors’ interests required to be kept under section 325 of the Act; and 3.2 copies of the directors’ service contracts. 4 The following is an explanation of the resolutions relating to special business; 4.1 The right of the directors to allot further shares in the capital of the Company requires in most cases the prior authorisation of the shareholders in general meeting under section 80 of the Act. Resolution 6 will be put to members as special business to authorise the directors to allot ordinary shares with a nominal value of £1,866,689 out of the Company’s unissued share capital representing approximately 33.33 per cent of the Company’s current issued share capital. The authority shall expire ﬁve years from the date of passing of this resolution. 4.2 Resolution 7 will seek to obtain power under section 95 of the Act for the directors to allot for cash shares with an aggregate nominal value of £280,031equal to approximately 5 per cent of the Company’s current issued share capital without being required ﬁrst to offer such securities to existing shareholders. The Company will thereby be given greater ﬂexibility when considering future opportunities but the interests of existing shareholders will be protected as, except in the case of a rights issue or the allotment of shares under the Company’s employees’ share option scheme, the proportionate interests of shareholders cannot, without their consent, be reduced by the issue for cash of new shares representing more than 5 per cent of the current issued share capital. Save for the issue of shares pursuant to options granted under the Company’s employees’ share option scheme, the directors have no present intention to allot any part of the unissued share capital of the Company or, without the prior approval of the Company in general meeting, to make any issue which would effectively alter the control of the Company or the nature of its business. This authority will expire immediately following the annual general meeting next following the resolution or, if earlier, 15 months following the resolution being passed. 54 55265_P54 59 12/9/01 7:21 pm Page 2 An Abdulkadir to Zoe of our Team Abdulkadir Abdi Kulmie Abdulkadir Abdi Kulmie Adam Bauly Adam Coates Adam Hughes Adam Ireland Adam Laidlaw Adam Lewis Adam Lucas Adam Mills Adam Shewan Adam Thompson Adam Tilbury Adrian Atkins Adrian McCourt Adrian Munday Adrian Pickup Adrian Wild Aidan Ward Aileen Crossley Aimee Mallett Aklakud Duha Akommil Ali Alan Brannigan Alan Faulkner Alan Harding Alan Hudson Alan Metcalfe Alan Monk Alan Parker Alan Saunders Alan Seal Alan Sproston Albert Neil Alex Large Alfred Asare Alison Manning Allan Chigariro Allan Harper Allison Alderson Amanda Hardy Amanda Hullett Amin Ladhu Ana Spedding Andre Cherfan Andrea Muccio Andrew Anthony Andrew Bradshaw Andrew Carlisle Andrew Clay Andrew Collins Andrew Creese Andrew Curtis Andrew Ditchburn Andrew Endersby Andrew Hanson Andrew Hill Andrew Jones Andrew Keirle Andrew Liggett Andrew Massey Andrew McLaren Andrew Monks Andrew Moore Andrew Parnell Andrew Press Andrew Simpson Andrew Smith Andrew Ward Andrew Waterﬁeld Andrew Williams Angela Harrison Angela Wiltshire Anna Timney Anne Lloyd Anne McCabe Anne Stevens Annette Gorstridge Annette Southon Anouska Edge Anthony Christopher Anthony Cox Anthony Eaton Anthony Gilbert Anthony Grimshaw Anthony Houghton Anthony Kerr Anthony Linsell Anthony Lloyd Anthony Molyneux Anthony Moulds Anthony Murphy Anthony Spurling Antony Beazer Antony Plant Antony Zawadski April Dunkley Arnold Harrison Ashley Cook Ashley Jordan Asvin Shah Augustus Slater Barbara Dormer Barbara Edge Barrie Taylor Barry Bester Barry Glazer Barry Price Barry Squires Barry Stephen Barry Tough Basera Poselay Ben Armitage Ben Harrison Benjamin Mills Bernard Cope Beverley Stokes Brad Crosthwaite Brant Wells Brenda Bowles Brendan Williams Brendon Roberts THE TEAM Brian Forde Brian Jones Brian Perrott Brian Richards Bruce Fielding Bryan Hartley Bryan Telfer Byron Coles Carina Lowe Carl Bradbury Carl Dicks Carl Entwistle Carl Fraser Carl Sheppard Carlos Rodriguez Carol Sudlow Carole Crofts Caroline Bennett Caroline May Caroline Meadows Cassandra Sides Catherine Bailey Chan Gokani Charles Kent Charlotte Shuttleworth Chris Bain Chris Cartey Chris McGill Chris Paddon Chris Tate Chris Tupper Christine Glover Christine Hendry 55 55265_P54 59 12/9/01 7:21 pm Page 3 Christine Rea Christine Wadsworth Christine Whiteman Christopher Castle Christopher Cooper Christopher Davis Christopher Eastham Christopher Lount Christopher Lupton Christopher Metcalf Christopher Smith Christopher Taylor Christopher Toneri Cindy Smith Claire Curtis Claire White Clinton Quinn Clive Eades Colin Butler Colin Crowley Colin Dixon Colin Hampson Colin Hoban Colin Markham Colin Offord Colin Probert Colin Rymer Colin Wharton Colin Winterburn Craig Fitzgerald Craig Ollard Craig Tetlow Craig White Crescent Baron Dale Hoy Daniel Beaven Daniel Beggs Daniel Fallows Daniel Freakley Daniel Jebbett Daniel Jones Daniel McAllister Daniel Musguin Daniel Savva Danny Fennings 56 Danny Gamble Danny Walden Darrel Bester Darren Carruthers Darren Cawkwell Darren Connor Darren Cooper Darren Hall Darren Howlett Darren Maddocks Darren Nicholas Darren Pritchard Darren Saker Darren Simm Darryn Walker David Asquith David Austin David Bailey David Black David Borwick David Broadbent David Canning David Carpenter David Chapman David Collyer David Daulton David Dunbar David Edwards David Elloway David Evans David Fitzgerald David French David Gridley David Harper David Hatton David Henderson David Hirst David Hulme David Kilgour David Knapp David Lalley David Lamb David Linwood David Lott David Macartney David May David Mitchell David Needham David Nelson David Oliver David Overton David Parr David Peppiatt David Price David Savage David Stott David Stoughton David Strain David Thomasson David Turne David Walter David Warrilow David Williams Dean Bennett Dean Brown Dean Holder Dean Johnson Dean Marshall Dean Seagrave Dean Tassell Debbie Hynd Deborah Johnson Deborah White Deborah Williams Debra Davies Denis O'Brien Dennis Cragen Derek Harrison Derek Lambourn Derek Parsons Derek Reynolds Desmond Kelly Dexter Pratley Dilawar Ali Dorren Hyatt Dudley Land Duncan Bull Dwayne Howard Dylan Roberts Edmund Smith Edward Derbyshire Edward Dove Edward Sellors Edward Walker Elaine Thomline Elizabeth Donovan Elizabeth Kelly Emin Demirkaya Emma Ashcombe Emma Brookes Emma Casey Emma Cunliffe Emma Jarram Enid Lamb Evan Hughes Evette Cherrington Faith Askew Fayyaz Ahmed Fernando Muanza Fharook Mughal Flora Tuitt Frances Bloomﬁeld Francis McMillan Gary Anderson Gary Asher Gary Blair Gary Curtis Gary Cutts Gary Firth Gary Glasgow Gary Jordan Gary McIntyre Gary Shouler Gary Sowerby Gary Thompson Gavin Bennett Gavin Dwyer Gavin McGregor Gavin Mitchell Gavin Ramsey Geoff Sutters Geoffrey Gordon Geoffrey Webster Gerald Doddimeade Gerald Lazaro Geraldine Farrow Gerard Duffy Gerard Mallon Gerry Brown Gerry West Gillian Beavan Gillian Grace Gillian Gray Glen Claridge Glen Deefholts Glenis Shirley Glenn Jessop Glenn Madgin Glenys Ogden Glyn Draycott Glyn Rogers Gordon Dwyer Gordon Kerr Graham Chapman Graham Keep Graham Leahy Graham White Greg Banos Gregg Wall Guy Wilcox Harry Broadbent Harry Morris Haydon Driscoll Heath Maryson Heather Blore Helen Barker Helen Bowen Helen Greatbatch Helen McDermott Ian Beasley Ian Bloomﬁeld Ian Cullen Ian Jones Ian Macluskie Ian Marshall Ian McInteer Ian McLean Ian Pennington Ian Smith Ian Winterburn 55265_P54 59 12/9/01 7:21 pm Page 4 Ian Young Ilona Logan Imran Ashraf Ivan Frampton Ivar Jensen Jackie Acres Jacqueline Byrne Jacqueline Macgillivrah James Bayes James Bott James Bridges James Brough James Brown James Carpenter James Eastham James Edge James Gaving James Gentleman James Hardy James Hazeltine James Hogan James Hulme James Manders James McGuigan James Metcalf James Moores James Oaten James Paterson James Patston James Richards James Robertson James Ryder James Sawyer James Smith Jamie Brewer Jamie McNeilly Jamie Smith Jamie Turner Jane Ladlow Janet Burgess Janet Lockyer Janice Millett Jason Doe Jason Meadows Jason Moore Jason Morley Jason Naga Jason Rigby Jason Smith Javeed Parkar Jayawthe Weerasinge Jayesh Dhokia Jayne De Gruchy Jenny Seabrook Jeremy Harris Jessica Merryweather Jethu Miah Joan Moores Joanna Daulton Jodie Robb Joe Cox Joe Sargent-Cain Johanna Asher John Barnet John Brindle John Coles John Daulton John Davidson John Doodson John Forden John Fox John Gallagher John Herr John Hickey John Hunter John Kelly John Kent John Macrae John McKenna John Pughe John Reilly John Russell John Gary Smith John George Smith John Stitson John Sutton Jon Oliver Jonathan Austin Jonathan Coombs Jonathan Hargreaves Jonathan Martin Jonathon Perkins Jonathan Roberts Jonathon Sheerin Josephine Hilldrup Joyce Davies Judy Prescott Juginder Gill Juile Moorhead Julian Lloyd Julie Cox Julie Jamieson Julieanne Addinall Justin Gough Kalpesh Shah Karen March Karen Ross Karen Sutcliffe Karl Jackson Karl Sisson Karl Smith Karl Winship Katan Shah Kate Harvey Kathryn Robinson Kathryn Rowley Katie Howe Katie McGowan Keiron Birch Keith Earl Keith Rudkin Kelly Ellison Kelly Thompson Kelly Whyte Kelly Wrenn Kenneth Cookson Kenneth Frankland Kenneth Oldham Kenneth Owen Kenneth Timms Kenneth Turner Kerri Bester Kerri Wood Kerry Atkinson Kerry Hall Kerry Hume Kerry McAulay Kevan Richardson Kevin Croft Kevin Furse Kevin Gallagher Kevin Hayes Kevin Hodson Kevin Mottram Kieth Miller Kirsten Hughes Lancelot Chigariro Larissa Gurney Laura Johnson Laura Kershaw Laurence Loxam Lee Collins Lee Cotterill Lee Croft Lee Culley Lee Galloway Lee Harrison Lee Johnston Lee Langmaid Lee Markwell Lee Marron Lee Maxey Lee McCullough Lee Moore Lee Mullen Lee Payne Lee Pinder Lee Reeves Lee Riches Leigh Holden Leo Canning Leo O'Doherty Leonard Denton Leonard Sheldrick Leonard Wilson Leslie Baker Leslie Bowles Leslie Thomson Lewis Wilkinson Liam Taylor Linda Hadley Lisa Sheppard Lisa Walker Lois Reade Loretta Daley Lorna Ballantyne Lorretta Mitchell Louis McEvilly Louise Ashley Louise Kelly Louise McGough Louise Walton Lucy Ashton Luke Robinson Lynda Prescott Lyndsey Martin Lynn Domsalla Mandy Aidney Marc Moules Marco Quasimodo Margaret Clapham Margaret Lawrie Margaret Rayner Margaret Seaton Maria Wing Mark Bentley Mark Bradbury Mark Curwen Mark Dawson Mark Ford Mark Hadﬁeld Mark Hodgkinson Mark Jepson Mark Johnson Mark Jones Mark Lever Mark Moore Mark Mottershead Mark Pearce Mark Redpath Mark Riley Mark Robinson Mark Sewell Mark Stephenson Mark Strong 57 55265_P54 59 12/9/01 7:21 pm Page 5 Mark Whiteman Mark Wilcock Mark Williams Martin Baker Martin Derricott Martin Flynn Martin Jackson Martin Ridgway Martin Rowlands Martin Shenton Martin Sinnott Martin Smith Martin Winterburn Mary Stonard Mathew Dunn Mathew Kelly Mathew Penny Mathew Wheeler Matt Whiteman Matthew Askew Matthew Ball Matthew Cribb Matthew Hawley Matthew Higginson Matthew Mckune Matthew Pickley Matthew Williams Mehmet Asdoyuran Melanie Dean Melanie Gardiner Melton Thompson Melvin Littler Michael Bateman Michael Bolden Michael Boughton Michael Coward Michael Cumberbatch Michael Dunn Michael Earls Michael Finn Michael Foster Michael Gay Michael Hickson Michael Holland 58 Michael Hollis Michael Humpage Michael Jack Michael Litster Michael Low Michael Maddison Michael O'Gorman Michael Pow Michael Reilly Michael Thomas Michael Weston Michael Williams Michael Worsnip Michele Calver Michelle Bovey Michelle Kempson Michelle Sutherland Mohamed Iqbal Mohamed Patel Mohammed Parvaz Mohammed Zamurd Naomi Cullen Naomi Mildenhall Nathan Barrass Nathan Collins Nathan Jander Nathan Seigneur Nazia Bibi Neil Cattroll Neil Curtis Neil Hendy Neil Homan Neil Humphreys Neil Kelly Neil Ketnor Neil Walker Nichola Fowler Nicholas Bradshaw Nicholas Deary Nicholas Lawrence Nicholas Ounstead Nicholas Withers Nick Timlin Nicola Acres Nicola Dearden Nicola Duckworth Nicola Scott Nicola West Nicolas Wassell Nigel Barugh Nigel Fleming Nigel Wills Nikki Baldock Nikolai Nikoloff Nilesh Dahya Nita Blackwell Norma Beresford Oluremi Dikko-Balogun Pamela Brydon Paresh Rajani Patricia Brian Patricia Campbell Patricia Croft Patricia Walker Paul Atkinson Paul Bainbridge Paul Carter Paul Clapham Paul Coffey Paul Collins Paul Danbury Paul Daubney Paul Grifﬁths Paul Hammond Paul Howarth Paul Hughes Paul Jones Paul Kemp Paul Kinsella Paul Lathrope Paul Laverty Paul Leaford Paul Liggett Paul McCullock Paul Murton Paul Nicholls Paul Peacock Paul Pratley Paul Revell Paul Riley Paul Robinson Paul Rudyard Paul Sanderson Paul Scott Paul Shaw Paul Sutton Paul Thornecroft Paul Vye Paul Williams Paul Wood Paul Wright Paula Budsworth Pauline Grenfell Peter Biggs Peter Byrne Peter Charters Peter Crake Peter Davey Peter Davidson Peter Fallows Peter Johnson Peter Murray Peter Nicklin Peter Riches Peter Sharkey Peter Smith Peter Stagg Peter Sumner Phil Peacock Philip Cuthbertson Phillip Hunt Philip Kelly Philip McCarney Philip Tomlin Pratik Parekh Pushpakant Mathur Raj Surani Rajan Mehta Raymond Mann Raymond Youseph Rebecca Bailey Rebecca Jacques Rebecca Oblein Rex Ogden Rhonda Partridge Richard Ball Richard Barnes Richard Bickers Richard Brookﬁeld Richard Carter Richard Clark Richard Clarke Richard Conlong Richard Diedrick Richard Gallagher Richard Harris Richard Homan Richard Hutcheson Richard Khamani Richard King Richard Lotto Richard Prescott Richard Redfern Richard Sellars Richard Smallman Rick Whelband Ricky Stevens Rizwan Khan Robert Blount Robert Cairns Robert Cooper Robert Docker Robert Exley Robert Gaskin Robert Gordon Robert Hadley Robert Hodgson Robert Moss Robert Myers Robert Tenn Roberto Di-Leva Robin Holt Roderick Carswell Roger Bailey Ronald Daniels Ronald Emmanuel 55265_P54 59 12/9/01 7:21 pm Page 6 Ronald Judges Ronald Perrott Rory Keen Rory McNally Rosina Taylor Roy Haddon Roy Peasland Ryan Mark Ryan Mason Samantha Cato Samantha Harris Samantha Sayer Samuel Foston Sandra Lloyd-Hughes Sandra Robinson Sandra Stevens Sarah Earthey Sarah Jones Satyan Meisaria Scott Arundell Scott Hamilton Scott Meadows Scott Picken Scott Porter Scott Slaughter Scott Stephenson Scott Walton Scott Williams Sean Evans Sean McCartney Sean McClafferty Sean King Shahid Mahmood Shane Billson Shane House Shane Malone Shanor Ali Sharon Muir Sharon Wood Shaun Bebbington Shaun Butcher Sheila Robertson Sheila Whetton Sherief Madkour Aly Shirley Girdler Shirley Moore Simeon Fender Simon Alison Simon Bedford Simon Benbow Simon Derbyshire Simon Farr Simon Fullaway Simon Green Simon Jones Simon Oaten Simon Rayner Simon Tunnicliffe Simon Walker Sion Jackson Socrates Pantelides Stanley Crowther Stephanie Brooks Stephanie Nevett Stephen Ainsworth Stephen Clark Stephen Clarke Stephen Collins Stephen Dempster Stephen Easthope Stephen Jones Stephen Melia Stephen Nunn Stephen O'Callaghan Stephen Putland Stephen Reed Stephen Ridout Stephen Smith Stephen Unuth Stephen Wilson Stephenie Bispham Steve Budd Steve Sheekey Steven Bowden Steven Firth Steven Fulthorpe Steven Godwin Steven Jacobs Steven Kaye Steven Long Steven Nelson Steven Powner Steven Pratt Steven Tinkler Steven Wright Stewart Trace Stuart Argyle Stuart Coleman Stuart Gratton Stuart Hood Stuart Hopwood Stuart Jones Stuart Leatherland Stuart Massey Stuart Pemberton Stuart Perrins Stuart Thompson Stuart Tynan Stuart Williams Sunil Patel Susan Attwell Susan Henshall Susan Hunt Susan Wright Suzanne Lloyd Suzanne Sutherland Terence Dooley Terence Melia Terence Power Terry Harrod Theresa Baker Thomas Greengrow Thomas Jones Thomas Lewis Thomas Ryan Tim Coleman Tim Keating Tim Wells Timothy Boardman Toby Bateson Tommy Dobson Tony Alliband Wayne Hughes Wayne Quaintance Wayne Randell Wayne Sponneck William Bailey William Bowers William Corbett William Gunshon William Harvey Wyn Hopkins Yvonne Burgess Zaid Tufail Zena Calver Zhi Pei Zoe Capener Tony Bennington Tony Chapman Tony Davies Tony Fitzgibbons Tony Long Tony Smith Tony Watson Tracey Gallagher Tracey Kenny Tracey Kenrick Tracy Walters Tristan Strange Valerie Vernon Vicky Edge Victoria Bachell Victoria Gallagher Victoria Harper Victoria Tarn Vivienne Johns Warren Bull Warren Hearn Warren Smith Wayne Bennett Wayne Farini Wayne Hardy Zoe Cope Zoe Cope 55265_P60&IBC 12/9/01 7:46 pm Page 1 STORE LOCATIONS Central Region Aston Banbury Bedford Burton on Trent Coventry* Derby Great Yarmouth* Ipswich* Kidderminster* Kings Heath Kings Lynn* Leicester Lincoln Luton Milton Keynes Narborough Newcastle under Lyme Northampton Norwich Nottingham Oldbury Peterborough* Sheldon Shrewsbury Solihull Stafford Stoke on Trent Tamworth Wolverhampton London and Thames South Basildon Beckton Brighton Broadstairs* Catford Charlton Chingford Colindale Crayford Croydon Dagenham Edmonton Gatwick Gunnersbury Harlow Ilford Maidstone Mitcham New Southgate Newbury Old Kent Road Penge Raynes Park Reading Romford Southall Southampton Southend on Sea Stamford Hill Tonbridge* Tunbridge Wells* Uxbridge Vauxhall Watford Wembley North West Aintree Audenshaw Barrow in Furness Blackburn Blackpool Bolton Carlisle* Cheadle Chester Chester 2 Cleveleys Crewe Failsworth Macclesﬁeld Morecambe Oldham Preston Total 121 stores Sale Salford St Helens Speke Stockport Warrington Widnes Wigan North Chesterﬁeld Gateshead Harrogate Huddersﬁeld Leeds* Stockton Sunderland Tyneside* Wakeﬁeld York Scotland Aberdeen Edinburgh Greenock Hillington Inverness Linwood Perth Rutherglen Wishaw South West Barnstaple Bristol Cardiff Cheltenham Christchurch Exeter Gloucester Newport Poole Swansea Swindon* Taunton Weston Super Mare Greater London 25 stores * New store 2000/2001 55265_P60&IBC 12/9/01 7:46 pm Page 2 STORE LOCATIONS Central Region Cambridge* Coventry* Great Barr Fenton Leicester* Nottingham Peterborough Stoke on Trent Worcester* London and Thames South Charlton New Southgate Orpington Swindon* Wembley North West Crosby Doncaster Oldham Openshaw Preston Shefﬁeld Stockport North Darlington* Hull Leeds* South West Bridgend* Exeter* Total 26 stores * New store 2000/2001 1 4 1 4 1 9 4 1 6 1 0 e n o h p e e T l . i l n o t e d d M w a h s n a r C y b d e n g s e D i 55265_F&B 12/9/01 7:16 pm Page 1 ANOTHER BIG Y E AR T o p p s T i l e s P l c A n n u a l R e p o r t a n d A c c o u n t s 2 0 0 1 Rushworth House, Wilmslow Road, Handforth, Wilmslow, Cheshire SK9 3HJ. Telephone 01625 446 700 Facsimile 01625 446 800 www.ToppsTiles.co.uk Topps Tiles Plc Topps Tiles Plc Annual Report and Accounts 2001

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