annual RepoRt and financial statements 2013
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celebrating
50 years
of success and
still growing
StRAteGic RePoRt
| About uS
For The lasT 50 years
We hAve hAd A SimPle
PhiloSoPhY FoR buSineSS –
PRovidinG An inSPiRAtionAl
ShoPPinG exPeRience And
unRivAlled PRoduct RAnGe
AuthoRitY, couPled With
excePtionAl convenience.
thiS YeAR We hAve
SucceSSFullY Achieved ouR
PRimARY GoAl oF GRoWinG
PRoFitAble mARKet ShARe
And AS We looK FoRWARdS,
We hAve Set ouRSelveS A
GoAl oF GRoWinG mARKet
ShARe to one in eveRY thRee
PoundS SPent in the uK
domeStic tile mARKet.
contentS
strategic Report
ifc About us
01 2013 in Focus
02 celebrating 50 years of success
and still growing
04 our business model
06 our Strategy in Action
08 chairman’s Statement
10 Strategic and operational Review
20 Financial Review
26 Risks and uncertainties
28 corporate Social Responsibility
Governance
32 directors and Advisors
34 directors’ Report
38 corporate Governance Statement
41 Remuneration Report
financial statements
46 independent Auditor’s Report
50 consolidated Statement
of Financial Performance
51 consolidated Statement
of Financial Position
52 consolidated Statement
of changes in equity
53 consolidated cash Flow
Statement
54 notes to the Financial Statements
80 company balance Sheet
81 notes to the company Financial
Statements
additional information
84 Five Year Record
85 notice of Annual General meeting
88 explanatory notes to the notice
of Annual General meeting
90 the team
96 Store locations
Plc
Annual Report and Financial Statements 2013
StRAteGic RePoRt
| 2013 in FocuS
£177.8m
GrouP revenue
(52 weeks ended 29 September
2012: £177.7m)
-0.5%
like-For-like revenue1
(52 weeks ended 29 September
2012: –0.7%)
60.2%
Gross marGin
(52 weeks ended 29 September
2012: 60%)
For more inspiration why not pop into one of our stores or visit:
toppstiles.co.uk
£10.6m
profit before tAx
( 52 weeks ended 29 september
2012: £12.5m)
5.44p
Adjusted eArnings per shAre3
( 52 weeks ended 29 september
2012: 5.11p)
4.76p
bAsic eArnings per shAre
( 52 weeks ended 29 september
2012: 5.14p)
1.00p
finAl dividend
( 52 weeks ended 29 september
2012: 0.75p)
£13m
Adjusted profit before tAx2
( 52 weeks ended 29 september
2012: £12.8m)
1.50p
totAl dividend
( 52 weeks ended 29 september
2012: 1.25p)
notes
1 like-for-like revenues are defined as sales from
stores that have been trading for more than
52 weeks
2 adjusted profit before tax excludes several
items we have incurred during the period
which are not representative of underlying
performance, these are: the impairment of
plant, property and equipment of £0.6 million
(2012: £0.5 million), business restructuring
costs of £0.2 million (2012: £0.4 million),
an increase in property related provisions of
£0.9 million (2012: £0.2 million), property
disposal gain of £0.1 million (2012: £1.6
million), £0.2 million gain relating to the
interest rate derivatives and forward currency
contracts the group (defined as topps tiles
plc and all its subsidiaries) has in place (per
ias39) (2012: £0.8 million charge), and a
£1 million charge for interest against potential
historic tax charges
3 adjusted for the post-tax effect of items
highlighted above
OperatiOnal HigHligHts
Market share increased to 28.5%
(2012: 27%) reflecting our successful
strategy of providing an inspirational
shopping experience, unrivalled
product range authority and
multi-channel convenience
Self-help initiatives and careful cost
control have helped the business
perform well in a tough market –
delivering modest growth in sales
and adjusted profit before tax
Further development of online capability
and sustained marketing expenditure
to drive store footfall and build greater
brand consideration
Gross margin increased to 60.2%
(2012: 60.0%) reflecting further
supply chain efficiencies and proactive
management of cost base
Increased final dividend of 1.00p
per share (2012: 0.75p per share),
making a total for the year of 1.50p per
share (20% increase)
Net debt (defined as loan facilities
drawn down less cash and cash
equivalents) at period end of
£36.6 million (2012: £45.6 million),
with £10 million of undrawn banking
facilities (2012: £15 million)
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Annual Report and Financial Statements 2013
01
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| celebrating 50 years
Of success and still grOwing
2013
We celebrate our
50th anniversary.
2010
We launch our How-To DVD
and online tile visualiser
We sponsor ITV Weather.
2008
The Topps Tiles transactional
website launches.
Help For Heroes becomes
our chosen charity.
2003
we win plc of the year
award.
1999
The Topps Tiles estate
reaches 100 stores.
2011
we open an additional
50,000 sq. ft. warehouse
to fulfill online orders and
expand our product range.
2002
we launch our own radio
station – topps fM – and our
first national tV campaign.
1963
the first topps tiles is
opened in Manchester,
owned by ted derbyshire.
1983
Stuart Williams and Barry
Bester rapidly expand the
Tile Kingdom empire in
the south.
02
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Annual Report and Financial Statements 2013
2013
successful “lab” store innovations are
rolled out across the estate. we sponsor
itV daybreak weather.
2013
18 new stores
are opened; the
estate reaches
328 stores.
2012
topps tiles unveil a new
concept “lab” store in
Milton Keynes.
2006
The Topps Tiles estate
reaches 250 stores.
2007
Matt williams is appointed our new
ceO. topps tiles sponsors leicester city
football club. we launch our youth
sponsorship programme.
2004
we open new Head
Office in grove park
leicester.
1998
the topps tiles estate reaches
70 stores.
we launch our first How-to
video instructing our customers
how to tile in their home.
1995
Tile Kingdom buys and
becomes Topps Tiles,
meaning 40 stores
across the UK.
1997
Topps Tiles becomes
a PLC.
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Annual Report and Financial Statements 2013
03
84 – 96Additional Information01 – 31Strategic Report32 – 45Governance46 – 83Financial Statements g
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strategic repOrt
| Our business MOdel
topps is the uK’s leAding speciAlist
retAiler of tiles. we supply tiles
and assOciated accessOries fOr
tHe refurbisHMent Of uK dOMestic
HOusing tO bOtH a trade and retail
custOMer base.
We operAte A verticAlly integrAted
supply cHain sOurcing Many Of Our
bestselling tiles direct frOM factOries
arOund tHe wOrld and rely On strOng
relatiOnsHips witH Key suppliers wHO we
Often wOrK tOgetHer witH tO deVelOp
new prOduct innOVatiOns.
our business operAtes from over
300 uK based retail Outlets Of c.5,000
sq ft wHicH are typically lOcated On
trade parKs Or On Main arterial rOads
in lOcatiOns near existing diy Outlets.
we Operate Our stOres On a lease basis
witH an aVerage unexpired lease Of
c.eigHt years.
topps stores cArry A mArKet leAding
rAnge Of tiles and assOciated prOducts,
tHe MajOrity Of wHicH is aVailable in
stOcK tO taKe away.
our store colleAgues are a Key
ingredient Of Our business MOdel – Our
custOMers rely On Our expert prOduct
KnOwledge and serVice based apprOacH.
combining the Key Aspects Of Our
business Has created a MOdel wHicH
Has endured fOr tHe last 50 years and
wHen cOMbined witH Our strategy we
belieVe will cOntinue tO serVe us well
intO tHe future.
04
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Annual Report and Financial Statements 2013
strategic repOrt
| Our strategy
the primAry goAl for the business is to tAKe
profitAble mArKet shAre. we HaVe cOnsistently grOwn
MarKet sHare OVer recent years and tOpps nOw accOunts
fOr 28.5% Of tHe uK dOMestic tile MarKet. we HaVe set
OurselVes a gOal Of grOwing MarKet sHare tO One tHird
Of tHe uK dOMestic tile MarKet, Or in siMple terMs £1 Out Of
eVery £3 tHat is spent in Our MarKet.
how will we achieve this?
Our strategy is focused on being the uK’s leading tile specialist, delivering
an unbeatable combination of service and outstanding value to our customers.
we achieve this by focussing on three key areas of specialism – providing
an inspirational shopping experience, range authority and
multi-channel convenience.
inspirAtionAl
shopping experience
1in3
multi-chAnnel
convenience
rAnge Authority
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Annual Report and Financial Statements 2013
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| Our strategy in actiOn
inspirAtionAl
shopping
experience
1in3
1in3
multi-chAnnel
convenience
1in3
rAnge
Authority
06
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Annual Report and Financial Statements 2013
wHat we’Ve acHieVed in 2013
Trade loyalty
We have continued to grow our share of trade business by ensuring that we offer
the best combination of range, price and in stock availability to our trade customers.
This, combined with expert technical product knowledge and great service has
resulted in trade growing to 45% of our sales.
Lab store initiatives
Last year we launched a “lab-store” in Milton Keynes which was a showcase for
several new merchandising concepts designed to inspire our customers. This year
we have rolled out two of the concepts to all of our stores – the “Mosaic walls”
and our “Inspiration Station”.
Online
Online, content and usability have been a real focus during the year. We have invested
in improved photography to better showcase our products and improved navigation.
Customer service
Customer service will always be a major focus for our business. This year’s Net
Promoter Score of 93% is a record achievement for the business and something
we are incredibly proud of.
wHat we’Ve acHieVed in 2013
Opening more stores
This year we have opened a net 3 new stores taking us to 328 at year end.
Within that our property team sourced, fitted out and opened 18 stores. These were
offset by 15 closures as we relocate some of our older stores – helping us to ensure
we are trading from the most appropriate locations in towns with up-to-date stores
to inspire our customers.
Refurbishing stores
We have continued to invest in the existing store estate and this year we have fully
refitted 12 stores.
Online
Our ability to combine domination of the online channel with the skilled advice
and convenience available through a physical store presence gives us a significant
competitive advantage over pure play online retailers of tiles.
wHat we’Ve acHieVed in 2013
Range authority
We have the UK’s leading tile range with over c.4,500 items. In addition we also
have the best stock availability with c.1,500 available to take away.
New product development
Our specialist team of buyers work with core suppliers on exclusive designs and
own brand products - delivering genuine product innovation.
Speed to market
Our integrated supply chain and dedicated buying team means we can bring
product to market faster than our competitors. This year we have launched more
than one new range every week to ensure we continue to have the very best range
in the UK.
rAnge Authoritymulti-chAnnel conveniencerAnge AuthorityinspirAtionAl shopping experienceinspirAtionAl shopping experiencemulti-chAnnel convenience Our in-store experts help our
customers bring their vision to life.
Our sample service enables
our customers to trial before
they buy.
We offer a fast and efficient
home delivery service or
simply carry goods for our
customers to their car.
Our staff are on hand every
step of the way to help our
customers with their home
improvement project.
Our store managers offer free
in-store consultations to give our
customers all the advice, tips
and guidance they need.
The opening of our 50,000
sq. ft. warehouse has enabled
us to fulfil online orders and
expand our product range.
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| cHairMan’s stateMent
” We continue to invest in our
business to ensure We cAn further
groW our mArKet shAre And
As the mArKet leAder are in tHe
strOngest pOsitiOn tO benefit frOM any
iMprOVeMents in tHe HOusing MarKet.
trading was tOugH during parts Of tHis
year but tHe resilience Of Our business
MOdel, deVelOped and prOVen OVer tHe
last 50 years, enabled us tO increase
sales and underlying prOfitability.”
michael jack,
Chairman
Topps 50 years on
Our business year
This year Topps Tiles celebrated 50 years of successful trading.
Our position as Britain’s number one tile retailer is a tribute to the
business philosophy and approach developed by its founders.
From the outset the founders recognised that the key to success was
an outstanding range of tiles and associated products at prices to suit
all pockets coupled with excellent and knowledgeable customer service.
The soundness of this approach was vindicated again this year as we
further increased our share of the UK tile market from 27% to 28.5%.
We marked our 50th anniversary year by holding a series of events,
including a lunch for 50 of our longest serving employees, some of
whom had been with Topps for over 40 years. They were addressed
by Stuart Williams, one of Topps’ founding fathers, who reminded
everyone just how far the business had come from its origins in Sale
near Manchester to the market leading publicly quoted multi-channel tile
retailer of today. On behalf of the Board I would like to record our deep
appreciation to everyone who, over the last 50 years, has contributed
towards building Topps into the successful business it is today.
The period since the start of the financial crisis in 2007 has been a
challenging one during which we have faced a contracting market.
So in our 50th year it gives me great pleasure to be able to report that
both sales and adjusted profit before tax have grown when compared
to the previous year. Whilst modest, sales increased to £177.8 million
and adjusted profit before tax grew to £13 million. This year marks
our first increase in adjusted pre-tax profits since 2007.
Strategy
The Board conducted a detailed review of the Company’s strategy this
year and has identified a series of key initiatives to move Topps’ business
forward over the next three years. In doing so we confirmed a clear
overriding goal for the organisation to work to – the pursuit of profitable
market share. Specifically, we have set ourselves the target of capturing
one in every three pounds spent in the UK domestic tile market.
The Board is fully aligned behind this goal and the strategy to deliver
it and has ensured that the resources are in place to fulfill this ambition.
Further evidence to support this approach is confirmed by our current
success in growing our market share which I have highlighted above.
I am very confident that our overall direction of travel – inspiring our
customers, providing exceptional levels of service and a market beating
product range, all delivered through unrivalled levels of shopping
convenience, is the most appropriate strategy to deliver our goal.
08
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Annual Report and Financial Statements 2013
Diamante: this supersized version of
the popular Metro brick-effect tile adds
a stylish dimension to any setting.
there’s no denying that
brick-shaped tiles have
become a design classic
for the home. Our wide range
of sleek rectangular brick effect
tiles in an array of colours, sizes
and finishes are the perfect choice
for plain walls yearning for a
stylish uplift.
chic craquele: these Crackle glazed tiles are
luxurious and pretty in shades of grey
and white.
Metro white: Metro remains
one of our most popular ranges
for kitchens and bathrooms.
Corporate governance
The future for Topps Tiles
With the advent of new statutory reporting and disclosure arrangements
we have taken the opportunity to review our governance procedures.
Although the new reporting regime officially applies to Topps for
its next reporting year we have adopted its principal requirements
early, including the addition of a Strategic and Operational Review.
This significantly improves the information available on the Company’s
strategy, business model, remuneration, outlook, risk and uncertainties,
carbon reporting, and diversity. The Board has also taken careful
note of the Corporate Governance Code 2012 and has ensured
that these accounts have been prepared on a fair, balanced and
reasonable basis.
In addition, we have objectively assessed the Board’s performance
and I will ensure that the business remains compliant with best corporate
governance practice for a company of our size.
I remain very confident that Topps is well positioned to continue to grow
profitable market share and further strengthen its position as the UK
market leader. Our market leading position also means we are well
placed to capitalise on any improvements in UK consumer confidence
and the housing market. We have started the new year with a very
encouraging trading performance and whilst it is too soon to confirm
this as a sustained trend it serves as an important reminder of the levels
of sales growth that are possible following several years of subdued
consumer spending.
One of the key attributes Topps brings to the market is an innovative
approach to its business and I believe this has been true for each of the
last 50 years. As we look forward I am confident that this will continue
well into the next half century of tile retailing.
michael jack,
Chairman
26 November 2013
Dividend
The business has further built on the secure financial footing which
we reported on last year. In addition to a small increase in underlying
earnings we have also reduced net debt and settled a significant
outstanding liability in the form of an interest rate derivative.
The underlying cash generation from the business remains strong,
supporting the continuation of our progressive dividend policy. A final
payment of 1.00p per share (2012: 0.75p per share) is being
recommended to shareholders. This will bring the total dividend for the
year to 1.50p per share (2012: 1.25p per share), an increase of 20%.
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Annual Report and Financial Statements 2013
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| strategic and OperatiOnal reView –
our progress in 2013
matt Williams,
Chief Executive Officer
rob parker,
Chief Financial Officer
the directors monitor a number of financial and non-financial metrics and Kpis both for the group and by individual store, including:
Measuring Our perfOrMance – financial Kpi’s
–0.5%
liKe-for-liKe sAles groWth
yeAr-on-yeAr
( 52 weeks ended 29 september
2012: –0.7%)
+0.1%
totAl sAles groWth
yeAr-on-yeAr
( 52 weeks ended 29 september
2012: +1.3%)
60.2%
gross mArgin
( 52 weeks ended 29 september
2012: 60.0%)
£13m
Adjusted pbt*
( 52 weeks ended 29 september
2012: £12.8m)
*adjusted pbt as defined on page 1
£36.6m
net debt
( 52 weeks ended 29 september
2012: £45.6m)
135
inventory dAys
( 52 weeks ended 29 september
2012: 133)
the content of this strategic and Operational review meets the content requirements
of the strategic report as set out in s414a of the companies act 2006. this strategic
and Operational review and chairman’s statement contain 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 and 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.
Strategy
The primary goal for the business remains to take profitable market share
and I am pleased to report that this year we have again been successful
in this regard. Our focus on self-help measures and a tight control
of all costs proved to be well founded in a market which remained
challenging. These measures have enabled us to grow our share of the
domestic non-contract market for tiles from 27% to 28.5% and achieve
a small but important step forward in adjusted pre-tax profits compared
to last year.
10
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Annual Report and Financial Statements 2013
” the primAry goAl for the business remAins to tAKe
profitAble mArKet shAre And i Am pleAsed to report
thAt this yeAr We hAve AgAin been successful in this
regArd. Our fOcus On self-Help Measures and a tigHt
cOntrOl Of all cOsts prOVed tO be well fOunded in a MarKet
wHicH reMained cHallenging. tHese Measures HaVe enabled
us tO grOw Our sHare Of tHe dOMestic nOn-cOntract
MarKet fOr tiles frOM 27% tO 28.5% and acHieVe a sMall but
iMpOrtant step fOrward in adjusted pre-tax prOfits cOMpared
tO last year.”
Measuring Our perfOrMance – nOn-financial Kpi’s
28.5%
mArKet shAre
( 52 weeks ended 29 september
2012: 27%)
93.0%
net promoter score
( 52 weeks ended 29 september
2012: 90.6%)
46.9
cArbon emissions per store
(tonnes per Annum)
( 52 weeks ended 29 september
2012: n/a)
1,718
totAl employees
At period end dAte
( 52 weeks ended 29 september
2012: 1,740)
27.5%
employee turnover
( 52 weeks ended 29 september
2012: 23.8%)
328
number of stores At yeAr end
( 52 weeks ended 29 september
2012: 325)
note – 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 customers 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.
the directors receive regular information on these and other metrics for the group as a whole. this information is reviewed and updated as the
directors feel appropriate.
Our strategy remains resolutely focused on being the UK’s leading
tile specialist, delivering an unbeatable combination of service and
outstanding value to our customers. This year, we have been able
to maintain sales by countering market driven declines in footfall with
increases in customer conversion rates and average transaction value
(“ATV”), by inspiring our customers to make their home improvement
projects the very best they can be.
This progress was coupled with a good performance on margin and
costs where we sought to drive more efficiency into the business.
The response from the organisation as a whole to this challenge
has been very encouraging.
Increasing profitable market share remains our goal for the years ahead
and we are also adding some clearly defined longer term ambition
by targeting a one-third share of the UK tile market. The strategy
for achieving this focuses on pushing into three key areas within
our specialism:
1. Providing an inspirational shopping experience
2. Range authority
3. Multi-channel convenience
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Annual Report and Financial Statements 2013
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| strategic and OperatiOnal reView –
our progress in 2013 (CONTINUeD)
new innovations in tile
design & manufacture
allow for closer replicas
of real stones tiles.
These special effects transform
simple porcelain and ceramic into
something more luxurious allowing
customers to achieve the look of
slate, stone, granite & marble.
£15.6m
Adjusted operAting profit
(52 weeks ended 29 September
2012: £16.6m)
clays: our Clays range of ceramic tiles replicate the look of
natural terracotta. exclusive to Topps Tiles, these textured tiles
are available in muted earthy tones; perfect for enhancing a
country-cottage feel.
Bengal: exclusive to Topps Tiles, Bengal is a large
format slate-effect porcelain tile with tones of grey,
green and brown, creating a chic modern vibe.
Providing an inspirational shopping
experience
Tiles are a relatively permanent decorative floor and wall covering that
our retail customers shop for infrequently and a product category in
which there are no widely recognisable brands. This means that our
customers need lots of help, guidance and assistance when buying tiles
and this is why we are fanatical about providing market leading levels of
service. We focus on offering friendly, honest, and helpful advice without
ever being pushy. We mystery shop every one of our stores once every
month, we also monitor every store’s Net Promoter Score* (“NPS”) each
quarter. Annually we conduct an independent survey of our customers’
satisfaction levels. We are very proud of the results we have already
achieved during the year (see KPI chart) and are determined to drive
service levels yet higher in the year ahead.
One of the fascinating developments within our market is that as our
customers have moved home less often over the last five years their tiling
projects have become more adventurous and ambitious as they have
become less concerned about the tastes of the next potential buyer of
their home. At Topps we have been delighted to help them achieve
these results. Inspiring our customers in this way remains a key focus
for the business.
The increased complexity of these tiling projects has meant that many
more of our customers are employing a professional fitter to install the
product. Our strong relationships with fitters, nationwide, has meant that
we have been able to facilitate this for them. Sales through the trade
(fitters) now represent 45% of total sales and growing our base of active
accounts and driving loyalty of this group to Topps remains a key focus.
We have also worked hard on making sure that the environment within
all of our stores is an inspirational place to shop. This year we took the
most successful elements trialled in our “lab store” in Milton Keynes –
such as the “Inspiration Station” and “mosaic walls” – and rolled them
out to all stores. We believe moving the entire estate forward in this
way is an important step in inspiring our customers with their home
improvement projects. To this end, we have significant plans in place
for further improvements to all stores in the year ahead. We will be
strengthening the leadership of the merchandising team to ensure we
have the expertise in place to realise these plans and lead the market
in this regard.
Online, content and usability have been a real focus during the year.
To ensure we replicate the inspirational in-store experience online
we have invested in improved photography to better showcase our
products and to bring them to life for our customers. Our improved
online expertise has ensured our customers can navigate our website
with ease as evidenced in the recent favourable result in the Sitemorse
usability survey.
Range authority
Topps’ position as the leading tile specialist is grounded in its ability
to offer its customers the widest range of tiles in the market.
Our customers’ tastes are changing and they are choosing a wider
variety of tiles than ever before and becoming increasingly adventurous
in their choice and use of colour and design. In responding to these
trends we have sourced our ranges from leading tile manufacturers
around the world. Currently we are offering a sector leading range
of over 4,500 items, which we regularly extend and update to stay
ahead of the competition. In addition to this, we work with core
suppliers on exclusive designs and own brand or exclusive accessory
products. Our diverse product sourcing strategy is also a key driver of
* a full explanation of the nps methodology can be found
within the Kpis section of this report.
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Annual Report and Financial Statements 2013
large Format Garden stone
Beige: part of a new super-sized
range of stone-effect tiles, these
tiles are not only stunning but offer
practical anti-slip qualities, perfect
for wet areas.
large format stone
effect tiles offer
versatility and timeless
appeal to any home
our competitive advantage. We have a specialist team of buyers who
shop all over the world so we are able to bring new products to the
market faster and more frequently than our competitors, launching a
new product range almost every week of the year. We strengthened
our commercial teams significantly during the year and plan to continue
to invest in this area.
Multi-channel convenience
Being convenient is a vital element of our customers’ decision to shop
with us. Our scale, expertise and ability to seamlessly integrate all of
our channels to market is an important source of competitive advantage.
Stores
Our stores remain by far our most dominant channel with over 99% of
our customers visiting a store at some stage in their shopping journey
with us. Customers tell us that this is because of the tactile nature of the
product, the market leading service levels on offer and stock availability.
We have continued to focus on optimising returns from the existing
store estate, adding new stores selectively where we believe strong
opportunities exist. We also target tactical relocations of individual
stores where this is supported by a local market opportunity. In the last
12 months we opened 18 new stores and closed 15 (of which one
was a relocation), resulting in a net increase of three stores to bring
the total, at year end, to 328. These new stores have performed well
and we remain very satisfied with the return on investment. In the year
ahead we have plans in place to increase the store estate by a net five
new units.
Devon Bone: is a timeless
classic porcelain tile designed
to replicate stone.
-0.5%
liKe-for-liKe revenue
(52 weeks ended 29 September
2012: -0.7%)
While there remain many parts of the country with the potential for
Topps to expand its store network, availability of suitable sites can be a
constraint on growth. To address this, we have developed a new smaller
store format which will offer a sub-set of the Topps range with very high
levels of in-store service. The new format, which is to be branded Topps
Tiles Boutique, could present the opportunity to significantly increase the
rate of new store openings. We will commence a trial of this new format
during the second quarter.
We have continued to invest in the existing store estate. In addition to the
improvements made to all stores mentioned above, we have carried out
a programme during the year which saw us refit 12 stores. We intend to
further progress our programme by fully refitting a record 15 stores in the
year ahead and 20 in 2014/15.
Finally, we have now concluded the successful conversion of the Tile
Clearing House units, with the remaining 12 stores being rebranded
as Topps Tiles Clearance Centres during the period, bringing all stores
under the main Topps brand.
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Online
Online has been growing strongly in importance as a channel over the
last few years to the extent that now more than 70% of our customers
use our website at some stage of their shopping journey. However,
while the website is an increasingly vital source of pre-purchase research
and inspiration, less than 1% of our customers use online as their only
channel and, consequently, we believe the “pure play” online market for
tiles remains very small. Our ability to combine domination of the online
channel with the skilled advice and convenience available through a
physical store presence gives us a significant competitive advantage
over pure play online retailers of tiles.
We boosted our expertise in online significantly in the period and this
is already delivering excellent results with strong growth in visitors and
closer tie-in with our stores. In addition, toppstiles.co.uk now has a
mobile site enabling customers to access our online site from their tablets
and smartphones.
Telephone ordering
Despite the prominence of online as a complimentary channel to
our stores, customers still place great value on the ability to talk to
stores and the support office to arrange orders, get advice and pay.
The seamless integration of all of these channels is crucial to maximising
customer convenience.
Trade customers
Whilst tradesmen are a separate and very particular customer group
they are becoming increasingly important as an alternative channel
to market for us with some of our customers being introduced to Topps
through their chosen tile fitter. Of these new customers, a portion will
transact directly with us, with the remainder finding it more convenient
to transact through their fitter, such that we may never deal with those
end consumers directly. Our strategy is focused on offering maximum
convenience to all of our customers, regardless of how they choose
to shop with us.
£177.8m
group revenue
(52 weeks ended 29 September
2012: £177.7m)
14
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Annual Report and Financial Statements 2013
inspirAtionAl
shopping
experience…
Batik: traditional patchwork styles
have been given a modern twist to
create a riot of pattern combinations.
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Annual Report and Financial Statements 2013
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Topps Tiles sponsors
Daybreak TV
throughout 2013.
Our 1/3 rd off TV campaign which
aired throughout Oct and Nov,
showcasing our great value and
range authority.
Colleague engagement
It is imperative that all of our people have a clear understanding
of the organisation’s goals and the strategic plan to attain them.
We invest significant time and effort in communicating and engaging
all of our colleagues in our plans for the business. During the year we
held two manager roadshow events at our HQ; the main event attended
by almost two-thirds of our people and the interim update attended by
all of our store managers. These events are also fully supported by our
Board. As always, our product lab attracted the most attention with
all colleagues keen to see the strong new product development we
have coming in the year ahead. On top of this we regularly update
our people on the Company’s progress via email, our radio station –
Tiles FM – and in-house magazine, Quartile.
Most recently, Topps Tiles completed a national TV advertising campaign
in support of the “Up to a 1/3 off” promotion which complimented the
successful ITV Daybreak weather sponsorship which ran throughout
2013. Increased investment in consumer PR resource will ensure we
build on our existing coverage in home interest magazines, online and
in national and local press.
The use of internal and market data is increasingly important in
driving marketing effectiveness in the digital multi-channel world.
Topps is working in partnership with experian to leverage these
rich internal data and external information sources.
Trade direct communications were up-weighted this year. The greater use
of our trader database has meant we are targeting these messages more
effectively and we have seen a strong reaction to this marketing activity,
supported by the many new trade products and improved deals on offer.
Marketing
As market leader, Topps Tiles has strong overall levels of brand
awareness. As we seek to again grow our market share, our marketing
strategy is focused on further broadening our customer base by
persuading new customers to consider Topps first – either online or
through a store visit. Our customer communications are increasingly
focused on the breadth of our range and styles available as this is
the principal driver of both consideration and ultimately the purchase
decision. The successful “Be Surprised” campaign emphasised our new
product development initiatives which have delivered an impressive
collection of cutting-edge designer tiles at amazing value.
The UK tile market and future performance
of the business
The UK tile market is fundamental to the success of our business
and is, to a degree, dependent on several macro-economic drivers.
Topps serves the domestic tile market with the result that all of our
products go into the refurbishment of existing UK housing stock. As such
our market is discretionary in nature – the vast majority of expenditure
is driven by a customer choosing to improve their home, with very
little related to essential maintenance. As a result this puts a particular
emphasis on consumer confidence as a key driver to our market and
Topps’ performance.
16
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Annual Report and Financial Statements 2013
A commemorative mosaic
commissioned to celebrate the
50th anniversary; recently installed in
reception at our head office on
Grove Park.
Matt Williams unveils the
commemorative mosaic created
and installed by artist Concetta
Perrot – a previous winner of
Topps Tiles’ mosaic artwork
competition – and depicts a tree
with over 320 leaves, each one
representing one of the Topps Tiles
stores currently trading across the
UK. It took 92 days and
thousands of pieces of hand-cut,
recycled Topps Tiles.
Corporate Social Responsibility
Topps has a long-standing Corporate Social Responsibility (CSR)
agenda covering Community and Charity, environment and Our People.
The full detail of our current CSR activities is detailed in our Annual Report
and Accounts. We take the impact of our business on our environment
extremely seriously and have included a range of environmental metrics
within the Directors section of our Annual Report and Accounts.
Human Rights
We are also very mindful of human rights issues within our organisation.
The key area that would impact our business is across our supply
chain. All of our directly employed colleagues are based in the UK and
covered by UK employment law, with which we are fully compliant.
Within our supply chain we source from factories in many countries
around the world. Our specialist team of buyers and their agents
personally inspect factory facilities to satisfy themselves with regard to
working conditions before new suppliers are engaged. We also have
commercial agreements in place that require our suppliers to be fully
compliant with local laws and we pay particular attention to labour
standards and factory conditions. No issues have been raised during
the year.
In addition one of the key influencers in customers taking on a home
improvement project is their purchase of a home – housing transactions
are therefore also a very useful indicator of likely future demand.
Currently housing transactions are improving slowly but remain at low
levels by historic standards. From 1.7 million transactions in 2007,
the market declined to around 750,000 in 2009. Over the last year
the market has been growing at around 5% p.a. and is now at just
below 1 million transactions. Long-run averages suggest that between
1.2 million and 1.3 million transactions per annum is a sustainable level
of activity and as such this represents a positive opportunity for Topps.
We also consider UK house price data as a useful indicator of the
relative health of our market as we believe it reflects elements of
both consumer and housing market confidence. Historically housing
transactions and house prices have moved in the same direction
(albeit at different rates). Increasing house prices are also an important
influence on consumer confidence as home owners tend to feel more
affluent in a rising market.
Financial objectives
In addition to the key operational objectives highlighted in the Strategy
summary above the business maintains a strict financial discipline,
including:
• Primary focus on increasing revenues and cash generation,
maintaining tight cost control and optimising gross margins.
• Maximising earnings per share and shareholder returns, including
bi-annual review of our dividend policy.
• Maintaining a capital structure which enables an appropriate
balance of financial flexibility and capital efficiency.
Progress against both our operational and financial objectives is
discussed throughout this report and, where appropriate, measures are
utilised, these are included in the Key Performance Indicators section.
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Annual Report and Financial Statements 2013
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Diversity
The Board reviews the balance of skills, knowledge and experience on
the Board regularly. Its policy with regard to gender is such that it will
continue to make changes to its composition irrespective of gender or
any form of discrimination and to appoint the best candidate to the post.
Our workforce at period end date comprises:
Directors
Senior Managers
Other employees
total employees
2013
2012
male
female
Male
female
5
13
1,407
1,425
1
1
291
293
5
13
1,432
1,450
1
1
288
290
Equal opportunities
At Topps Tiles we are committed to equal opportunities and ensure that
we hire on potential, promote on talent and reward on success.
We aim to promote equality of opportunity in employment regardless
of age, gender, colour, ethnic or national origin, culture, religion or other
philosophical belief, disability, marital or civil partnership status, political
affiliation, sexual identity or sexual orientation.
Going concern
Based on a detailed review of the above risks and uncertainties and
management’s current expectations, the Board believes that 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. Therefore, the Board also
considers it appropriate to prepare the financial statements on the going
concern basis.
Current trading and market conditions
for year ahead
Sales over the final three months of our financial year gave us
encouragement for the year ahead. In addition, consumer confidence
and housing market data including mortgage approvals have started
to move in a positive direction. We are just beginning to see these
dynamics impact on our market and we have had a positive start to
the new financial year with like-for-like sales over the last eight weeks
increasing by 7.4%. While it is too early to ascertain whether this will
be a sustained trend, shareholders can be confident that our business
remains well positioned to continue to grow profitable market share
and further capitalise on any improvements in consumer confidence
and increased levels of discretionary expenditure.
18
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Annual Report and Financial Statements 2013
rAnge
Authority...
Botella: is an exciting new range of glass mosaics
available in eight exclusive designs, not just a beautiful
product, it is also sustainable and responsibly sourced.
Plc
Annual Report and Financial Statements 2013
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| financial reView
Wood effect tiles are one
of the key emerging trends
in interior design, capturing
the look of natural timber and
combining it with the durability and
ease of use associated with tiled
walls and floors.
treverk: these matt finish
porcelain tiles perfectly capture
birch and chestnut woodgrains.
Profit and loss account
Revenue
Revenue for the period ended 28 September 2013 increased by
0.1% to £177.8 million (2012: £177.7 million). Like-for-like store
sales decreased by 0.5% in the period, which consisted of a 0.2%
decrease in the first half of the financial period and a 0.7% decrease
in the second half.
Gross margin
Overall gross margin was 60.2% compared with 60.0% in the
previous financial period. At the interim stage of this period gross
margin was 59.8%, and we recorded a gross margin of 60.5% in
the second half of the period. The environment in which we operate
continues to be highly competitive and we have been active this
year in working with our key suppliers to ensure we are able to offer
our customers the very best value for money. By utilising our scale
as the largest specialist retailer of tiles in the UK we have been able
to enhance customer value at the same time as also generating
improved returns.
operating expenses
Total operating costs have risen from £91.1 million to £93.2 million,
an increase of 2.3%. Costs as a percentage of sales were 52.4%
compared to 51.3% in the previous period. When adjusting items
(detailed below) are excluded, operating costs were £91.5 million
(2012: £90 million), equivalent to 51.4% of sales (2012: 50.6%
of sales).
20
Plc
Annual Report and Financial Statements 2013
woodgrain: these ceramic wall and floor
tiles create the natural look of timber and
are enhanced by a textured finish.
The movement in adjusted operating costs is explained by the following
key items:
• Inflation at an average of approximately 1.5% has increased our cost
base by around £1.2 million.
• The average number of UK stores trading during the financial period
was 321 (2012: 320), which would imply a 0.3% increase in store
costs, generating approximately £0.2 million of additional costs.
• employee profit share costs have increased by £0.2 million.
• Store costs are broadly flat on an underlying basis once the above
factors are taken into account.
• The remaining elements of the cost base are flat when compared to
the prior year.
During the period we incurred several charges which we have excluded
from our adjusted operating costs as they are not representative of the
underlying cost base of the business. These charges relate to impairments
of plant, property and equipment of £0.6 million (2012: £0.5 million),
business restructuring costs of £0.2 million (2012: £0.4 million),
and an increase in property related provisions of £0.9 million
(2012: £0.2 million). Property related provisions are driven by providing
forward for four years the expected costs of loss-making or closed stores.
Any change to the property provisions would be driven by either a
change in the number of stores impacted or a change in the forward
period provided for.
£36.6m
net debt
(52 weeks ended 29 September
2012: £45.6m)
w-age: a porcelain wall and floor
tile featuring a ringed woodgrain
design in a stylish matt finish.
Graffiti: a bold wood effect porcelain tile
available in 6 distinct colours to make a real
style statement.
operating profit
Operating profit for the period was £13.8 million
(2012: £15.5 million).
Operating profit as a percentage of sales was 7.8% (2012: 8.7%).
excluding the adjusting items detailed above, operating profit was
£15.6 million (2012: £16.6 million).
other gains and losses
During the period we disposed of one freehold property at the
carrying value of the investment and also recognised a further gain of
£0.1 million relating to a previous disposal of the Fenton warehouse.
In the prior year we disposed of three freehold properties generating a
gain of £1.6 million.
Financing
The net cash interest charge for the year was £2.5 million
(2012: £3.8 million), excluding the impact of revaluations,
cancellation of derivative instruments and a one-off charge against
historical tax charges. The underlying interest charge has fallen
compared to the prior financial period due to a decision to cancel
the remaining element of the interest rate derivatives the Company had
in place. The impact of this cancellation is a saving of c.£1.25 million
per annum until February 2017 and the cash cost of the cancellation
was £5.9 million (2012: £6.7 million). As this cost had been previously
charged to the Company’s income statement in the form of a “marked
to market” transaction it is effectively offset by a reversal of the historical
charge, detailed in the following section.
The cancellation of the interest rate derivatives and current forward
currency contracts gave rise to a “marked to market” revaluation
as required by IAS39 “Financial Instruments: Recognition and
Measurement”. This revaluation has generated a fair value (non cash)
gain of £6.1 million (2012: £5.9 million gain). The combined net
gain for the year is therefore £0.2 million (2012: £0.8 million charge).
Due to the nature of the underlying financial instruments, IAS39 does not
allow hedge accounting to be applied to these losses and hence any
gains or losses against these derivatives is applied directly to the income
statement rather than being offset against balance sheet reserves.
One-off charges also include £1 million against a possible interest
charge on outstanding tax payments. £0.9 million of this cost had
previously been charged against tax and as a consequence there is
an offsetting impact included within the Group’s tax computation for
the year.
Net interest cover was 7.4 times (2012: 5.3 times) based on earnings
before interest, tax, depreciation and the impairment of plant, property
and equipment, excluding the impact of IAS39 in finance charges.
328
number of stores
(52 weeks ended 29 September
2012: 325)
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Profit before tax
Reported profit before tax is £10.6 million (2012: £12.5 million).
The Group profit before tax margin was 6.0% (2012: 7.0%).
excluding the adjusting items detailed on page 1, profit before tax
is £13.0 million (2012: £12.8 million).
tax
The effective rate of corporation tax for the period was 13.8%
(2012: 21.8% – continuing operations).
This includes the effect of a release of £0.9 million relating to historical
corporation tax provisions no longer required.
The underlying rate, excluding prior year adjustments, is 25.3%.
This is slightly higher than the UK expected rate due to
non-deductible expenditure and depreciation on assets not qualifying
for capital allowances.
earnings per share
Basic earnings per share were 4.76p (2012: 5.14p – continued
and discontinued operations).
Diluted earnings per share were 4.73p (2012: 5.09p
– continued and discontinued operations).
Dividend and dividend policy
Whilst we have continued to experience some fluctuations in consumer
confidence which impacts performance in our market, the Board
are keen to recognise the progress the business has made this year.
Both sales and adjusted profit before tax have improved year-on-year,
albeit modestly, which the Board consider a strong result in the context
of the trading patterns we experienced during the second and third
quarters of the year. We have also seen a solid improvement in the net
debt position which once again highlights the strong cash generation
of our business. We strongly believe that it is appropriate to continue
to reward our shareholders through a progressive dividend policy.
To this end we are recommending to shareholders a final dividend of
1.00p per share (2012: 0.75p per share). This will cost £1.9 million
(2012: £1.4 million). The shares will become ex dividend on
23 December 2013 and, subject to approval at the Annual General
Meeting, the dividend will be payable on 31 January 2014.
This brings the total dividend for the year to 1.50p per share
(2012: 1.25p per share), an increase of 20%.
22
Plc
Annual Report and Financial Statements 2013
multi-chAnnel
convenience…
Diamante: our new oversized
brick-shaped tile is also proving
a hit in fashionable Teal.
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Annual Report and Financial Statements 2013
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Roches: delicately patterned grey
tiles add a modern, sophisticated
edge to a simpler scheme.
our new decorative
patterned tiles are
perfect for giving interior
schemes an immediate
uplift.
Belleza: mix and match to create
your own personal style with
Belleza’s plain and ornate designs.
Balance sheet
capital expenditure
Capital expenditure in the period amounted to £5.5 million
(2012: £6.1 million), a decrease of 9.8%. Capital expenditure
includes the cost of 15 new openings, two conversions, one
relocation and 12 partial store refits at a cost of £4.2 million
(2012: £5.2 million). The remaining expenditure primarily
consists of investment in a new IT system of £1.1 million
(2012: £0.4 million). There have been no freehold purchases
in the period (2012: £0.5 million).
At the period end the Group held six freehold or long leasehold
sites including two warehouses and distribution facilities with a total
carrying value of £13.6 million (2012: seven freehold or long
leasehold valued at £14.2 million).
Property disposals
During the period we disposed of one freehold property and
generated proceeds of £0.4 million (2012: three properties
generated £5.4 million).
inventory
Inventory at the period end was £26.2 million (2012: £25.9 million)
representing 135 days’ turnover (2012: 133 days’ turnover). This small
increase in stockholding is driven by an increase in the number of stores
trading at year end of 328 (2012: 325).
capital structure and treasury
Cash and cash equivalents at the period end were £18.4 million
(2012: £14.4 million) with repayable borrowings at £55 million
(2012: £60 million).
This gives the Group a net debt position of £36.6 million
(2012: £45.6 million).
cash flow
Cash generated by operations was £28.2 million, compared
to £19.7 million last period.
24
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Annual Report and Financial Statements 2013
The look of this tile changes
dramatically with a different
colour grout.
exclusive to Topps Tiles, these tiles
are designed to be grouted over to
just reveal the shape of the flowers.
Neutral brick-shaped faux
mosaics are great for creating
a streamlined feature wall.
cautionary statement
This Strategic and Operational Review, and Chairman’s Statement have
been prepared solely to provide additional information to shareholders
to assess the Group’s strategies and the potential for those strategies to
succeed. These reports should not be relied on by any other party or
for any other purpose.
The Strategic and Operational Review and Chairman’s Statement
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 and 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.
The Directors, in preparing this Strategic and Operational Review,
have complied with s414a of the Companies Act 2006. This Business
Review 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 to its subsidiary undertakings when viewed as a whole.
Directors’ Responsibility statement
We confirm to the best of our knowledge:
• the financial statements, prepared in accordance with the relevant
financial reporting framework, give a true and fair view of the assets,
liabilities, financial position and profit or loss of the Company and the
undertakings included in the consolidation taken as a whole; and
• the Strategic Report, which is incorporated into the Directors’ Report
includes a fair review of the development and performance of the
business and the position of the Company and the undertakings
included in the consolidation taken as a whole, together with a
description of the principal risks and uncertainties they face and
a fair, balanced and reasonable view of the business.
Annual General Meeting
The Annual General Meeting for the period to 28 September 2013
will be held on 24 January 2014 at 10.00am at Topps Tiles Plc,
Thorpe Way, Grove Park, enderby, Leicestershire Le19 1SU.
matt Williams,
Chief Executive Officer
26 November 2013
rob parker,
Chief Financial Officer
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Annual Report and Financial Statements 2013
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| risKs and uncertainties
the boArd conducts a cOntinuing reView Of Key risKs and
uncertainties. during tHe year tHe audit cOMMittee HaVe Met
witH seniOr ManageMent and discussed tHe Key strategic risKs,
tHe liKeliHOOd and iMpact Of tHese Occurring and Mitigants
we HaVe in place.
UK econoMy anD consUMeR conFiDence
Risk
The economy may deteriorate and impact on
consumer confidence.
Impact
Consumers need to feel confident to invest money
into their homes. In the event of a significant
reduction in house prices, housing transactions or
consumer confidence, we would expect this to
adversely impact on business performance.
aPPRoPRiate BUsiness stRateGy
Risk
Our business strategy will not be
successfully delivered.
Impact
Without a clear Company goal and a well
understood strategy to deliver, the risk is that
the business loses focus and fails to deliver
its objectives.
thReat oF new entRants
Risk
New entrants may seek to erode our
market share.
Impact
Lower sales and profitability.
Mitigation
Our strategy is focused on taking an ever greater
share of our market and we believe the business
is sufficiently robust to withstand short-term trading
pressures. Longer term we consider that the UK
housing market remains attractive and we believe
there remains significant upside from a sustained
economic recovery. In addition the business model
has proved its ability to withstand short-term trading
pressures on several occasions in recent years.
Mitigation
Strategy is reviewed annually, updated as
required and approved by the Board. Bi-annual
communication events ensure around two-thirds of
all colleagues are directly briefed by the executive
and regular updates are provided to all colleagues
on our progress towards our goals.
The Board review progress on key strategic
initiatives at each meeting.
Mitigation
We constantly review our competitor set but at
the same time we are clear on what differentiates
Topps from its competitors. exceptional customer
service, market leading product offer and unrivalled
multi-channel convenience are the key elements
of our business which, whilst imitated, have never
effectively been replicated.
26
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Annual Report and Financial Statements 2013
loss oF Key PeRsonnel
Risk
The loss of key individuals could impact
on the ability of the business to deliver
its objectives.
Impact
Increased competition also introduces the risk of
increased colleague turnover and the resulting loss
of knowledge, disruption and associated costs.
loss oF Key PeRFoRMinG stoRes
Risk
The loss of key performing stores
which contribute a material amount of
Group earnings.
Impact
Loss of a multiple number of top performing
stores could cause a material impact on the
Company’s profitability.
loss oF a Key sUPPlieR
Risk
The loss of a key supplier could impact on
our ability to trade.
Impact
The loss of a key supplier would potentially lead to
disruption in supply of key selling products leading
to loss of sales and profits.
FinancinG
Risk
The Group has a £65 million revolving credit
facility in place which expires in May 2015.
The loan facility contains financial covenants
which are tested on a bi-annual basis.
The key risks would be either not negotiating
new facilities in advance of expiry or
breaching a loan covenant which would
have an adverse impact on the Group’s
financing position.
Impact
The most likely impact of not being able to renew
the loan facility would be the requirement to raise
additional funding from shareholders.
The impact of breaching a loan covenant would
likely be financial in terms of additional charges
and fees. At its worst it would also mean the loan
would be repayable which would be likely to result
in a fund-raising.
Mitigation
Colleague turnover is monitored closely (and
is included in the KPIs section of this report).
We also conduct an annual colleague survey
to gauge the views of our people across the
business. Pay and benefits are benchmarked
to ensure we are rewarding our people in line
with their contribution to the business.
In addition we have a detailed succession plan
for each key executive.
Mitigation
We conduct regular reviews of all stores’
profitability and for our most profitable units
security of tenure is key. We review lease terms
where appropriate and will proactively re-gear
leases to ensure we always have at least
several years of security.
Given our geographic coverage it is also
likely that if a key performing store did
close we would migrate some sales into
neighbouring stores.
Mitigation
Our supply chain is diverse and due to
our scale we can source products directly
from manufacturers anywhere in the world.
For most products we sell there is an alternative
available. If there was not, this would affect the
entire market place and accordingly should not
lead to a loss of competitiveness.
Mitigation
The loan is provided by three banks – HSBC,
RBS and Barclays – which is in itself a mitigant.
Loan renewal discussions are conducted well
in advance in order to allow sufficient time to
cater for different negotiation scenarios and
would include both existing and new banks
to gauge interest.
Loan covenants are measured monthly and
reported to the Board. The Company planning
model is updated several times a year and
gives good forward visibility. Any potential
issues would be dealt with well in advance
by proactive discussions with lenders.
The Directors will continue to monitor all of the key risks and uncertainties and the Board will take appropriate actions to mitigate these risks and their
potential outcomes.
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Annual Report and Financial Statements 2013
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| cOrpOrate sOcial respOnsibility
All our store and office teams
regularly organise Help for
Heroes charity events.
Taking responsibility for our impact on society is important to us as
a business. During each of the last ten years our Corporate Social
Responsibility (“CSR”) agenda has been subject to a process
of continual development to ensure we are active within the
communities in which we work, our procedures are undertaken in
an environmentally conscious manner, and that our employees feel
supported, developed and engaged. This year we have appointed
one of our Non-executive Directors, Andy King, as having overall
responsibility for our CSR policies.
We are proud of our achievements in this area and focus our
attention across three primary areas:
• Community and Charity
• environment
• Our People
Community and charity
At Topps we have a strong CSR ethic. Our policy on community
and charity is to play an active role in the communities local to our
stores and places where we work, acting as a “good neighbour”.
Now in its tenth year, our CSR programme has been both enhanced
and evolved, providing the framework and impetus for stores to
support local activities that are a “perfect fit” for the values and culture
of our Group.
community
Mosaic art continues to be a growing craft across the UK. Topps is
proud to lead the way in promoting and supporting mosaic, both as
a public art and as an educational craft skill for children and adults.
Our mosaic programme is broken down into two key areas where we
have sponsored major competitions designed to showcase the work
of novice mosaic artists:
• Mega Mosaic Makers is a primary school competition organised by
The British Association for Modern Mosaic (“BAMM”); and
• our own landmark competition for adults learning mosaic in
community workshops and further education centres, the Topps Tiles
Award for Achievements in Mosaics.
youth football
Sponsorship of youth football is an important part of our community
relations programme. It is an exciting way for Topps to be involved
in helping children in our local communities get outdoors and
become active.
We are one of the biggest supporters of youth football in the UK and
all of our stores are encouraged to sponsor a team. Our stores are
encouraged to build close relationships with teams – providing support
and equipment such as a Topps Tiles team kit, footballs and kitbags.
We currently support over 300 youth teams nationwide and are very
proud of this association.
28
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Annual Report and Financial Statements 2013
We currently sponsor over
300 youth football teams
across the UK.
charity
In 2008, Topps became the first corporate sponsor of the fledgling
charity, Help for Heroes. This decision was voted for by our employees
who help us to choose the charity of their choice. Since then, we
have taken this cause to our hearts in a big way. Founded in 2007,
the charity funds specialist rehabilitation projects for members of the
armed forces wounded in front-line conflicts, including Afghanistan.
Undoubtedly it is one of Britain’s most high-profile charities and as
such enjoys phenomenal support from the British public as well as from
colleagues across our business. The last year saw another amazing
fundraising drive by our employees, with individuals arranging events
in their local communities such as golf tournaments, fishing competitions
and auctions. Colleagues also participate in company-wide fundraising
events which this year included a Christmas event across all stores and a
charity BBQ event at our central office and warehouse in Leicester.
All the hard work and commitment that our employees put into our
partnership has been recognised by Help for Heroes. The Group
received an award for “Outstanding Support”. To date, we have raised
close to £250,000 for the charity, and we will continue to support them
throughout the duration of our partnership.
Bryn Parry, founder of Help for Heroes, commented, “Since we
launched our partnership with Topps Tiles, we have seen people climb
mountains, run marathons, sell thousands of wristbands, in fact, do just
about anything honest and decent to raise money for Help for Heroes.
The fundraising has been nothing short of extraordinary and the money
raised has allowed us to provide direct, practical support to those
wounded in the service of our country.’’
Environment
energy
energy is a major driver of cost for the business and it also forms a
significant part of our environmental impact. The biggest source of our
energy consumption is electricity through its use for store lighting and
heating systems. energy efficient technology including low energy
lighting has helped to reduce our environmental impact and we
continually review opportunities to adopt new technology on a cost
efficient basis wherever possible.
During the year we have sourced 14% of our electricity from renewable
sources but from October 2013 this has been 100% as a result of a
revised supply agreement.
Since 2010 we have been working across our store network with
the Carbon Trust and our own contractors to replace old inefficient
lighting installations with new efficient systems. We have completed the
upgrades in 64 sites and now consider that the majority of our estate
has modern and efficient lighting solutions.
Carbon emissions for the business are included within the Strategic
Review section of the Directors’ Report.
waste
We have made great progress with our waste management
programme in recent years and this will continue to be a key part of
our environmental agenda. All stores use dry mixed recycling which
includes cardboard, paper, newspapers, plastic films, bottles, steel
and aluminium cans all being collected in one bin by our chosen
refuse partner.
Continuing initiatives at our warehouses have seen overall waste going
to landfill reduce to less than 25% in total. Processes are in place for
cardboard, plastic and banding that result in our transport fleet delivering
these materials to dedicated recycling centres on a weekly basis.
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| cOrpOrate sOcial respOnsibility (CONTINUeD)
Our National Distribution
Centre and transport fleet
based at Leicester.
Our partnership with a recycling management company continues
to bring new innovation to our operations. This, together with the
addition of an extra state of-the-art bailer, has decreased the time it
takes to process our waste and reduces the risk of contaminating the
dry recyclables. Overall revenues for waste materials are up 47%
year on year and continue to rise.
transport
The HGV fleet has seen three new euro 5 low emission vehicles
added in place of older models. Trials continue with two major
manufacturers as we look towards the next generation of euro 6
compliant engines which become law for new vehicles from next
year onwards. Fuel consumption remains a high priority when
choosing our fleet. To this end the overall strategy has been to prove
efficiency before committing to buy during the past 12 months.
The telematics systems on all of our vehicles allow continued
monitoring of driving efficiency standards with the subsequent detail
being utilised for tailored driver training and analysis when choosing
replacement vehicles. All our new fleet now comes with a tailored
driver fuel training day which is used as part of our Driver’s Certificate
of Professional Competence compliance. Drivers’ incentive schemes
remain in place to encourage fuel efficiency levels. The total CO2
emissions on the HGV fleet for the period was 2,646 tonnes
(2012: 2,590 tonnes), having increased by 2.2%, but this reflects
a continued reduction in third-party haulage and the inclusion of
new stores to the estate. As we have increased the utilisation of our
fleet our CO2 per tonne shipped has fallen from 21.9kg to 19.6kg,
a decrease of 6.7%. The first of our bespoke teardrop and urban
double-decker trailers continue to show good results specifically on
the journeys to Scotland and London. Further trailer technology is
being considered for fleet replacement in 2014 and this will integrate
with load security legislation.
supply chain
We source the products we sell from around the world to bring the
latest styles and designs to the UK market. As such we take seriously
issues affecting labour standards, factory conditions and human rights.
To address any possible concerns our buyers and buying agents
conduct regular supplier visits and factory tours to ensure that all contracts
for supply of goods include our requirements in relation to each of
the above issues. We have a policy on timber products and have
adopted the principles and criteria of the Forest Stewardship Council
as our benchmark.
Our full policy can be found on our website at www.toppstiles.co.uk
in the investor section under Corporate Responsibility.
Our people
Our employees are a central focus for us and we want them to feel
engaged and proud of their Company. In doing this we strive to create
a store environment which is inspiring to both our employees and
our customers. A range of employment performance indicators are
contained within the Strategic Report section of this report.
employee wellbeing
We provide an employee helpline service for all employees to give them
a channel for expressing concerns and seeking advice.
Our in-house Health & Safety team maintains regular dialogue with staff.
They carry out periodic inspections and assessments to ensure risks are
minimised or removed in our stores, warehouse and offices. To promote
effective communication and employee involvement, we also operate
a Health & Safety Committee, which meets on a bi-annual basis and
is chaired by a main Board Director, Rob Parker.
30
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Annual Report and Financial Statements 2013
As craft continues to grow across the
UK we support an increasing number
of mosaic art initiatives, including
public art and educational craft skills
for children and adults.
communication and engagement
employee development
Communication with our employees is vital and we have initiatives
in place to ensure regular and effective dialogue with colleagues.
We have introduced a three year communication and engagement plan
to support the business plan for the future.
As a Group, we actively encourage employee development.
We have a strong culture and history of growing and developing
our people from within the organisation and it is important to us that
our employees fulfil their potential during their working time at Topps.
• We have a number of existing communication channels, including an
internal magazine and a weekly stores bulletin. In addition we have
an intranet which will be relaunched early in the new financial year.
This will effectively act as a “one-stop shop” for all information that
colleagues across the business require.
• 208 store colleagues are currently enrolled on a Retail
Apprenticeship programme delivered by our in-house team of
trained assessors. Of these a total of 136 are working towards
Advanced Apprenticeships (Level 3) and 72 towards Intermediate
Apprenticeships (Level 2).
• As part of our communication commitment, we have conducted a
series of management roadshows, taking around two-thirds of our
entire colleague population through our strategic plans for the next
three years, and ensuring all employees understand, and are part of,
our vision.
• This year saw our employee representative forum (TeAM Talk) firmly
embedded across the entire business, following its successful launch
last year. We have also recently completed our annual employee
Opinion Survey, with a significant increase in response rates,
proving that our communications programme is working effectively.
These initiatives deliver a framework for employees to participate in
two-way dialogue, giving them a platform from which to help shape
and influence decision making within the Group.
• We are developing our internal employee brand in a drive to attract
• In addition to our current programme, over 700 existing store
colleagues have already achieved the above qualifications.
• We are also delighted to announce that in September 2013
Topps Tiles was recognised and awarded the Regional Highly
Commended BAe Large Apprenticeship employer of the
Year 2013 award by the National Apprenticeship Service.
Topps Tiles was one of over 1,600 entrants for this year’s National
Apprenticeship Awards, which celebrates the achievements of
the country’s most outstanding apprenticeship employers and their
apprentices. This award demonstrates the quality and impact of our
apprenticeship programmes.
In April 2011 the Group retained its Investors in People award for a
further three years.
and retain the talent needed to support our growth plans. We actively
encourage colleagues to apply for internal vacancies and promotions.
Topps Tiles is pleased to be a constituent member of the FTSe4Good
UK Index.
• Rewarding our employees for all their hard work is part of the Topps
ethos and everyone has the opportunity to enhance their basic pay
through additional performance-related incentives.
• In addition to the above measures, we have an annual “back to the
floor” programme where every member of the management team
spends time working in our stores – we believe this provides us with
a much greater level of understanding of our business and of our
colleagues’ needs.
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Annual Report and Financial Statements 2013
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3
4
2
6
5
1
32
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Annual Report and Financial Statements 2013
Governance 1 Rt. Hon. Michael Jack
2 Matthew Williams
3 Robert Parker
Privy councillor MP
non-executive chairman (aged 67)
In business Michael’s management experience
came from P&G, Marks and Spencer and a
part of Northern Foods. His career as an MP
concluded in 2010 after 23 years during which
he served as a Minister in four Departments
including the Treasury, as Financial Secretary.
Additionally he chaired the eFRA Select
Committee. Now he chairs the recently formed
Office of Tax Simplification. He joined the Board
of Topps Tiles in 1999.
chief executive officer (aged 39)
Matt joined the Company in 1998 after
completing his Chartered Surveyors exams
and took up a role of Property Director.
In 2004 he was promoted to Chief Operating
Officer and on 1 April 2006 joined the
Plc Board. In 2007 he was promoted to
Chief executive Officer.
chief Financial officer (aged 41)
company secretary
Secretary of Audit Committee
Rob Joined Topps Tiles in 2007 as Finance
Director. Rob’s previous role before joining the
Group was Director of Finance & IT for Savers
Health & Beauty Ltd. Prior to that Rob was with
the Boots Group Plc for 10 years, ultimately as
Director of Finance for Boots Retail International.
He is responsible all aspects of finance, human
resources, property, IT, Company legal and
Group secretarial matters.
4 Alan White
5 Claire Tiney
6 Andy King
non-executive Director (aged 58)
non-executive Director (aged 53)
non-executive Director (aged 52)
Senior Independent Director,
Chairman of Remuneration Committee,
Chairman of Nomination Committee,
Chairman of Audit Committee,
Member of Nomination Committee,
Member of Audit Committee,
Member of Nomination Committee,
Member of Audit Committee
Member of Remuneration Committee
Member of Remuneration Committee
Alan has recently retired as the Chief executive
of N Brown Group plc, a role he had held since
2002, and he is also a Non-executive Director
of Direct Wines. He qualified as a chartered
accountant with Arthur Andersen and has been
Group Finance Director for Sharp electronics (UK),
N Brown Group plc and Littlewoods plc. He
joined the Board of Topps Tiles in April 2008.
Claire runs her own business as an HR
Consultant, executive coach and facilitator,
having spent 15 years as an executive Director
in a number of retail businesses including
Mothercare and WH Smith. Most recently she
was HR Director at McArthurGlen, the developer
and owner of designer outlet villages throughout
europe. She was previously a Non-executive
Director of Family Mosaic and is also a
Non-executive Director of Grey 4 Gold.
Claire joined the Board of Topps Tiles
in November 2011.
Andy is the Managing Director of Dobbies
Garden Centres. Previously he was Chief
executive of Notcutts Garden Centres for 5 years
and prior to that he held Global Marketing
Director roles at The Body Shop, Mothercare and
WH Smith, having previously spent nine years at
Boots the chemists. Until December 2011 Andy
was a Non-executive Director at The Chartered
Institute of environmental Health. Andy joined the
Board of Topps Tiles in January 2012.
| adVisOrs
Directors
The Rt. Hon. J.M. Jack,
Privy Councillor MP
Non-executive Chairman
M.T.M. Williams
Chief executive Officer
R. Parker acma
Chief Financial Officer
A. White fca
Non-executive Director
C. Tiney
Non-executive Director
A. King
Non-executive Director
secretary
R. Parker acma
Registered number
3213782
Registered office
Thorpe Way
Grove Park
enderby
Leicestershire
Le19 1SU
auditor
Deloitte LLP
Manchester
United Kingdom
Bankers
HSBC Bank Plc
56 Queen Street
Cardiff
CF10 2PX
Registrars
Capita IRG Plc
Bourne House
34 Beckenham Road
Beckenham
Kent
BR3 4TU
solicitors
Beachcroft LLP
St. Ann’s House
St. Ann Street
Manchester
Brokers
Peel Hunt
Moor House
120 London Wall
London
eC2Y 5eT
Financial PR advisors
Citigate Dewe Rogerson
3 London Wall Buildings
London
eC2M 5SY
Plc
Annual Report and Financial Statements 2013
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The Directors present their Annual Report on the affairs of the Group, together with the financial statements and Auditor’s Report, for the 52 week
period ended 28 September 2013. The Corporate Governance Statement set out on pages 38 to 40 forms part of this report.
Principal activity
The principal activity of the Group comprises the retail distribution of ceramic and porcelain tiles, natural stone, wood flooring and related products.
Strategic Report
The Company, being the listed entity Topps Tiles Plc, is required by the Companies Act to set out in this report a fair review of the business of the
Group during the financial period ended 28 September 2013 and of the position of the Group at the end of that financial period. We are also
required to set out a description of the principal risks and uncertainties facing the Group. The Company is aware of new reporting requirements for
companies with year ending dates from 1st October and with this mind we have adopted a number of the new requirements this year, including the
addition of a Strategic Report.
The information that fulfils the requirements of the Strategic Report can be found within the Chairman’s Statement on page 8, the Strategic and
Operational Review on page 10, and the Corporate Social Responsibility Statement on pages 28 to 31, which are incorporated in this report
by reference.
The future prospects of the Group are highlighted in both the Chairman’s Statement and the Strategic and Operational Review.
The Directors monitor a number of financial and non-financial key performance indicators (KPIs) for the Group and its stores. A selection of these are
detailed on pages 10 and 11.
The Company conducts an annual strategic risk discussion with the Audit Committee Chairman and senior managers from the business which
includes a wide range of risks including commercial, continuity and environmental, social and governance risks.
Results and dividends
The audited financial statements for the 52 week period ended 28 September 2013 are set out on pages 50 to 83. The Group’s profit for the
period from continuing operations, after taxation, was £9,144,000 (2012: £9,769,000).
During the interim period a dividend of 0.5p per share was declared and paid (2012: interim dividend of 0.5p per share was paid).
Following careful consideration, and for the reasons given in the Chairman’s Statement of this report, the Board is recommending the payment
of a final dividend of 1.00p per share, totalling £1,921,000 (2012: 0.75p per share, totalling £1,439,000).
Directors
The Directors of the Company, who served throughout the year and thereafter, were as follows:
J.M. Jack
Non-executive Chairman
M.T.M. Williams Chief executive Officer
R. Parker
A. White
C. Tiney
A. King
Chief Financial Officer
Senior Independent Non-executive Director
Non-executive Director
Non-executive Director
In line with the updated Code on Corporate Governance all Directors are subject to annual re-election at the next Annual General Meeting.
All resolutions at the Annual General Meeting are passed on a show of hands, in line with our Articles of Association. The results of the votes polled
in advance are also disclosed to members present and in the event that the polled votes did not support the resolution the Chairman would formally
call for a poll, thereby ensuring that all members interests are represented.
The Company provides insurance against Directors’ and Officers’ liabilities to a maximum value of £7,500,000.
The Directors’ interests in the shares of the Company are set out on page 45.
Details of Directors’ share options are provided in the Directors’ Remuneration Report on page 44.
34
Plc
Annual Report and Financial Statements 2013
Governance
Share capital
Details of the Company’s authorised and issued share capital, together with details of the movements in the Company’s issued share capital
during the period, are shown in note 20 to the financial statements.
The Company has one class of ordinary shares in issue, which carry no right to fixed income. each share carries the right to one vote at general
meetings of the Company.
There are no specific restrictions on the size of a holding nor on the transfer of shares, which are both governed by the general provisions of the
Articles of Association and prevailing legislation. The Directors are not aware of any agreements between holders of the Company’s shares that
may result in restrictions on the transfer of securities or on voting rights.
No person has any special rights of control over the Company’s share capital and all issued shares are fully paid.
Change of control – significant agreements
The Group is party to significant agreements, including commercial contracts, financial and property agreements and employees’ share plans,
which contain certain termination and other rights for the counterparties upon a change of control of the Company. Should the counterparties
choose to exercise their rights under the agreements on a change of control such arrangements would need to be renegotiated. None of these
are considered to be significant in terms of the likely impact on the business of the Group as a whole. There are no agreements between any
Group company and any of its employees or a Director of the Company which provides for compensation to be paid to the employee or
Director for termination of employment or for loss of office as a consequence of a takeover of the Company, other than provisions that would
apply on any termination of employment.
Supplier payment policy
The Group’s policy is to negotiate terms of payment with suppliers when agreeing the terms of each transaction, ensuring that suppliers are made
aware of the terms of payment and that both parties abide by those terms.
The effect of the Group’s negotiated payment policy is that trade payables at the period end represented 59 days’ purchases (2012: 43
days). Trade payables days is calculated by dividing the trade and other payables by the aggregate of cost of sales and relevant non inventory
expenditure, multiplied by 365.
Carbon reporting
As detailed in the CSR section of this report on page 29 our primary energy consumption is electricity used across our store estate. In-store
lighting is a major driver of overall consumption and we have been working on installing modern, energy efficient lighting for the last few years.
We continue to experiment with new technology to ascertain its suitability for our business.
electricity
Gas and oil
Commercial fleet
Company cars
total
2013
2012
co2 (tonnes)
8,526
3,440
2,646
430
15,042
co2 (tonnes)
/store
26.6
10.7
8.2
1.3
46.9
co2 (tonnes)
n/a
n/a
2,590
n/a
n/a
co2 (tonnes)
/store
n/a
n/a
8.1
n/a
n/a
energy carbon emissions has been compiled in conjunction with our suppliers (SSe and Gazprom) and is based on the actual energy consumed
multiplied by environment Agency approved emissions factors.
Vehicle emissions has been calculated by our in-house transport team based on mileage covered multiplied by manufacturer quoted
emission statistics.
No data is available, with the exception of commercial fleet, for the prior period because it was not a requirement to report on it and our
suppliers have been unable to supply historical data.
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Annual Report and Financial Statements 2013
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Charitable and political contributions
During the period the Group made no charitable donations (2012: £nil). The Group made no political contributions (2012: £nil).
Substantial shareholdings
In addition to the Directors’ shareholdings noted on page 45, on 15 November 2013 the Company had been notified, in accordance with
Chapter 5 of the Disclosure and Transparency Rules, of the following interests in 3% or more of its issued share capital.
Cazenove Capital Management
Williams S K M esq
Invesco
AXA Investment Managers SA
Aviva plc
Blackrock Inc
River & Mercantile Asset Management
Equal opportunities
number
24,016,625
20,593,950
20,143,919
15,101,888
11,326,585
9,781,179
9,169,994
% held
12.5%
10.7%
10.5%
7.9%
5.9%
5.1%
4.8%
At Topps Tiles we are committed to equal opportunities and our policy is included in the Strategic and Operational Review section of this report.
Employee consultation
The Group places considerable value on communication with and involvement of employees and has continued to keep all employees informed
on matters affecting them and on the various factors affecting the performance of the Group. This is achieved through formal and informal meetings,
electronic announcements and the Company magazine. Regular forums have been established to ensure that employee representatives are consulted
on a wide range of matters affecting their current and future interests. All employees are also asked to complete a confidential annual opinion survey to
ascertain their views on working for the Group and to identify any actions that can be taken to improve employee satisfaction and engagement.
Financial risk management, objectives and policies
The Group is exposed to certain financial risks, namely interest rate risk, currency risk and credit risk. Information regarding such financial risks is
detailed in notes 14, 15, 16, 17 and 18. The Group’s risk management policies and procedures are also discussed in the Strategic Report on
pages 20 to 27.
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.
This has been achieved through the introduction of a number of employee Sharesave, share bonus, approved and unapproved share option
schemes, since the flotation in 1997.
The total number of options held by employees, including Directors, is 6,079,512 (2012: 1,972,894).
As described in note 28, employee share purchase plans are open to almost all employees and provide for a purchase price equal to the daily
average market price over the three days preceeding the start of the offer period, less 20%. The shares can be purchased during a two week
offer period, which during the period ended 28 September 2013 fell between 7 January 2013 and 24 January 2013, the offer price to
employees was 43p.
Details of Directors’ share options are provided in the Directors’ Remuneration Report on page 44.
Information given to the auditor
each of the Directors at the date of approval of this annual report confirms that:
• so far as the Director is aware, there is no relevant audit information of which the Company’s auditor is unaware; and
• the Director has taken all the steps that ought to have been taken as a Director in order to make himself/herself aware of any relevant audit
information and to establish that the Company’s auditor is aware of that information.
36
Plc
Annual Report and Financial Statements 2013
Governance This confirmation is given and should be interpreted in accordance with the provisions of s418 of the Companies Act 2006.
Auditor
A resolution to re-appoint Deloitte LLP as the Company’s auditor will be proposed at the forthcoming Annual General Meeting.
Directors’ Responsibilities Statement
The Directors are responsible for preparing the Annual Report, Directors’ Remuneration Report and the financial statements in accordance with
applicable law and regulations.
Company law requires the Directors to prepare financial statements for each financial year. Under that law the Directors are required to prepare
the Group financial statements in accordance with International Financial Reporting Standards (IFRSs) as adopted by the european Union and
Article 4 of the IAS Regulation. They have elected to prepare the parent Company financial statements in accordance with United Kingdom
Generally Accepted Accounting Practice (United Kingdom Accounting Standards and applicable law). Under company law the Directors must
not approve the accounts unless they are satisfied that they give a true and fair view of the state of affairs of the Company and of the profit or
loss of the Company for that period.
In preparing the parent Company financial statements, the Directors are required to:
• select suitable accounting policies and then apply them consistently;
• make judgments and accounting estimates that are reasonable and prudent;
• state whether applicable UK Accounting Standards have been followed, subject to any material departures disclosed and explained in the
financial statements; and
• prepare the financial statements on the going concern basis unless it is inappropriate to presume that the Company will continue in business.
In preparing the Group financial statements, International Accounting Standard 1 requires that Directors:
• properly select and apply accounting policies;
• present information, including accounting policies, in a manner that provides relevant, reliable, comparable and understandable information;
• provide additional disclosures when compliance with the specific requirements in IFRSs are insufficient to enable users to understand the impact
of particular transactions, other events and conditions on the entity’s financial position and financial performance; and
• make an assessment of the Company’s ability to continue as a going concern.
The Directors are responsible for keeping adequate accounting records that are sufficient to show and explain the Company’s transactions.
They must also disclose with reasonable accuracy, at any time, the financial position of the Company and enable themselves to ensure that the
financial statements comply with the Companies Act 2006. They are also responsible for safeguarding the assets of the Company and hence for
taking reasonable steps for the prevention and detection of fraud and other irregularities.
The Directors are responsible for the maintenance and integrity of the corporate and financial information included on the Company’s
website. Legislation in the United Kingdom governing the preparation and dissemination of financial statements may differ from legislation in
other jurisdictions.
Responsibility Statement
We confirm that to the best of our knowledge:
• the Directors believe that the Audit Report is a fair, balanced and reasonable statement;
• the financial statements, prepared in accordance with the relevant financial reporting framework, give a true and fair view of the assets,
liabilities, financial position and profit or loss of the Company and the undertakings included in the consolidation taken as a whole; and
• the Management Report, which is incorporated into the Directors’ Report, includes a fair review of the development and performance of the
business, the position of the Company and the undertakings included in the consolidation taken as a whole, together with a description of the
principal risks and uncertainties that they face.
By order of the Board
r. parker,
Director and Company Secretary
26 November 2013
Plc
Annual Report and Financial Statements 2013
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Rt. Hon. Michael Jack (Chairman of the Board)
Dear shareholder,
The Company is committed to the principles of corporate governance contained in the 2012 UK Corporate Governance Code issued by the
Financial Reporting Council (“the Code”) for which the Board is accountable to shareholders.
The Board have reviewed the contents of this report and consider the document to be fair, balanced, understandable and an accurate representation
of the current position of the business. The basis for this view is that all of the Directors are furnished with the requisite information to perform their
duties and are provided access to key members of management as they require. The Board meet regularly and are given adequate time to probe,
debate and challenge business performance as and when they consider it necessary to do so. The Board have also discussed the detail of the
financial results with the Audit Committee and are satisfied they have been prepared appropriately. Having gained a thorough understanding of the
business each member has also had the opportunity to review and influence this report and as such have concluded in line with the statement above.
Statement of compliance with the Code
The Company has complied throughout the period with the Provisions of the Code. We were not, however, previously compliant with provision B6
(evaluation) of the code, instead opting for an informal rolling programme of review. This year, the Board has conducted a review of the performance
of the Board, the Board sub-committees, individual Board Directors and specifically the performance of the Chairman.
This process has been conducted by the Remuneration Chair and has taken the form of questionnaire followed by a round table discussion.
The Board of Directors comprises six members, of which four are considered independent including the Company’s Non-executive Chairman,
Rt. Hon. Michael Jack. The Senior Independent Non-executive Director is Alan White, who also chairs the Audit Committee. Brief biographical
details of all Directors are given on pages 32 and 33. The Board meets at least ten times a year. Certain defined issues are reserved for the Board
including approval of financial statements and circulars, annual budgets, strategy, Directors’ appointments, internal control and risk management,
corporate governance, key external and internal appointments and pensions and employee incentives. Board members are responsible for their own
development but are provided access to the Company’s advisors and regularly attend external presentations and workshops on areas considered
relevant and appropriate, including environmental, social and governance issues. In particular all members of the Board have access to the Deloitte
Academy in London which offers seminars and professional updates on a range of relevant topics useful to enhancing the Board’s knowledge and
understanding of corporate governance.
In advance of Board meetings Directors are supplied with up-to-date information about trading performance, the Group’s overall financial position
and its achievement against prior year, budgets and forecasts.
Where required, a Director may seek independent professional advice at the expense of the Company. All Directors have access to the Company
Secretary and they may also address specific issues to the Senior Independent Non-executive Director.
The Company Secretary is a combined role with that of the Chief Financial Officer. The Board do not consider that this impairs the independence of
the Company Secretary and the access to professional advice highlighted above is viewed as the primary mitigant to any possible impairment.
In line with the updated UK Corporate Governance Code all Directors are subject to annual re-election. Directors are elected at the first AGM after
appointment. All Non-executive Directors have written letters of appointment.
The Board considers Alan White, Claire Tiney and Andy King are independent for the purposes of the Code. The terms and conditions for the
appointment of Non-executive Directors are available for inspection on request.
The Board acknowledges the Code’s position with respect to the potential loss of independence for any Non-executive Director who has served for
nine years or more. Although the Rt. Hon. Michael Jack has exceeded this term the Board considers his broad based commercial experience and
extensive business specific knowledge to be extremely beneficial. Michael was appointed to the role of Chairman in May 2011 and since then two
new independent Non-executive Directors have joined. The composition of the Board now reflects corporate governance best practice with three
independent Non-executive Directors out of a total Board of six members.
The Board will review the independence of Non-executive Directors on an ongoing basis.
The Board operates three committees. These are the Nomination Committee, the Remuneration Committee and the Audit Committee. All of these
committees meet regularly and have formal written terms of reference which are available for inspection on request.
38
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Annual Report and Financial Statements 2013
Governance Attendance at Board/Committee meetings
The following table shows the number of Board and Committee meetings held during the 52 week period ended 28 September 2013 and the
attendance record of the individual Directors.
Number of meetings
J.M. Jack
M.T.M. Williams
R. Parker
A. White
C. Tiney
A. King
board
of directors
audit
committee
remuneration
committee
nomination
committee
12
12
12
12
12
12
12
2
2
2
2
2
2
2
3
N/A
N/A
N/A
3
3
3
0
N/A
N/A
N/A
0
0
0
Statement about applying the principles of the Code
The Company has applied the principles of the UK Corporate Governance Code as reported above. Further explanation of how the Code has
been applied in connection with Directors’ remuneration is set out in the Remuneration Report.
Audit Committee
The Audit Committee consists of the Non-executive Directors. The Chairman is Alan White and the other members are Claire Tiney and Andy
King. The qualifications of the Audit Committee members are detailed on page 33. Its Chairman has particularly relevant experience, being a
qualified chartered accountant who has previously served as the Finance Director and Chief executive of a listed company.
The Audit Committee considers the nature and scope of the audit process (both internal and external) and its effectiveness. It also reviews and
approves the internal audit programme, meets with the external auditor and considers the Annual and Interim Financial Statements before
submission to the Board. In addition reviews are made of the arrangements by which staff may, in confidence, raise concerns about possible
improprieties in matters of financial reporting or other matters. No reports have been received during the period. The Committee is responsible for
the review of the Company’s key strategic risks and this process is performed by the Committee Chairman in conjunction with a number of senior
operational managers. It also reviews the Group’s system of internal control and reports its findings twice a year to the Board. The Committee
meets with the external auditor and other members of the Board attend at the invitation of the Audit Committee Chairman.
The Audit Committee provide advice to the Board on whether the annual report is fair, balanced and provides the necessary information
shareholders require to assess the Company’s performance, business model and strategy. In doing so the following issues have been
addressed specifically:
• Review of key strategic risks – the Committee Chairman conducts an annual review of key strategic risks and invites a cross section of
Company management in order to ensure that the review includes a detailed understanding of the business. The review highlights the key risks
based on a combination of likelihood and impact and then also considers what appropriate mitigants should be implemented (highlights from
this work are included in the Strategic Report).
• Review of poor performing stores – as part of both the interim and full year end review process, poor performing stores are considered and
any related impairments and/or property provisions are provided for. Management will then follow up with detailed action plans to either
improve store performance or seek an exit solution. The Audit Committee also review progress towards these plans at the following review.
• Review of inventory – the product we sell is only slowly influenced by changing consumer trends and also has a high gross margin. The result
of these factors is that we only rarely dispose of product for below the cost we paid. As a result, inventory provisions for slow moving or
obsolete stock are modest but the Audit Committee review these as part of their review at the interim and full year stage.
• Systems implementation – during the period the business has implemented a new enterprise-wide IT system. During the year the Board received
a monthly update on the system project and ensured that it was managed in a way that would maximise the benefits to the business and
minimise any potential impacts and risks associated with this type of implementation. The central part of the system (warehouse, finance and
merchandising) went live at the end of June and stores will follow in the first half of the new financial period.
• Going concern – the Chief Financial Officer provides an assessment of the Company’s ability to continue to trade on a going concern
basis for at least the next 12 months. Forecasts are based on financial plans agreed with the Board (budgets or forecasts), the Company’s
most recent trading results, and also include a range of possible downside scenarios. The assumptions that underpin these assessments are
considered and discussed in detail when the Audit Committee meet. The conclusion of that review is included in the Strategic and Operational
Review section of this report.
Plc
Annual Report and Financial Statements 2013
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Audit Committee continued
Part of the role of the Audit Committee is to review the independence of the Company’s auditor. The Company’s external auditor, Deloitte LLP
(“Deloitte”), also provides non-audit services to the Company in the form of tax compliance. The Audit Committee is satisfied that Deloitte LLP has
adequate policies and safeguards in place to ensure that auditor objectivity and independence is maintained. The Audit Committee is aware that
providing audit and non-audit advice could lead to a potential conflict of interest. The level of fees paid to Deloitte LLP for non-audit services has been
considered by the Audit Committee and is not perceived to be in conflict with auditor independence. In order to ensure the continued independence
and objectivity of the external auditor, there is an established policy regarding the provision of non-audit services which is that all other non-audit and
tax services are put out to tender and the contract awarded based on quality and cost. The Audit Committee has concluded that the auditor, Deloitte,
is independent.
Deloitte has been auditor for the Group since September 2003. The current audit partner’s first period of signing partner was the financial period
ending 1 October 2011. Consideration is also given, by the Committee, to the work of Deloitte and their independence in deciding whether an
audit tender is required. Currently it is satisfied by the work of Deloitte and their independence, and has consequently proposed their re-appointment.
Nomination Committee
The Nomination Committee is chaired by Andy King. The other members are Alan White and Claire Tiney. The formal terms of reference for this
Committee require it to make recommendations to the Board for appointments of Directors and other senior executive staff.
The Nomination Committee is also responsible for Diversity and our policy is included in the Strategic Report section of this report.
No appointments were made during the year under review and therefore the Committee was not required to meet and no external consultancy
was retained.
Dialogue with institutional shareholders
The Directors seek to build on a mutual understanding of objectives between the Company and its institutional shareholders by making annual
presentations and communicating regularly throughout the year. The Company also posts financial information on its website www.toppstiles.co.uk.
Maintenance of a sound system of internal control
The Board has applied principle C.2 of the Code by establishing a continuous process for identifying, evaluating and managing the significant risks
the Group faces. The Board regularly reviews the process, which has been put in place from the start of the period to the date of the approval of this
report and which is in accordance with the revised guidance on internal control published in October 2005 (The Turnbull Guidance). The Board is
responsible for the Group’s system of internal control and for reviewing its effectiveness. Such a system is designed to manage rather than eliminate
the risk of failure to achieve business objectives and can only provide reasonable and not absolute assurance against material misstatement or loss.
A summary of the key risks and uncertainties are detailed in the Strategic Report section of this report.
In compliance with Provision C.2.1 of the Code, the Board continuously reviews the effectiveness of the Group’s system of internal control.
The Board’s monitoring covers all controls, including financial, operational and compliance controls and risk management. It is based principally
on reviewing reports from management to consider whether significant risks are identified, evaluated, managed and controlled. It also examines
if any significant weaknesses have been promptly remedied and whether this indicates a need for more extensive monitoring. The Board has also
performed a specific assessment for the purposes of this annual report. This considered 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.
During the course of its review of the system of internal control, the Board has not identified nor been advised of any failings or weaknesses which it
has determined to be significant. Therefore a confirmation in respect of necessary actions has not been considered necessary.
rt. hon. michael jack,
Chairman of the Board
26 November 2013
40
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Annual Report and Financial Statements 2013
Governance | reMuneratiOn repOrt
remuneration committee Members
Claire Tiney (Chair)
Alan White
Andy King
The role of the Remuneration Committee is:
- To determine the pay and benefits of the executive Directors
- To determine the short- and long-term incentives for executive Directors
- To determine awards against incentive schemes
- To consult with major shareholders about changes to these incentive schemes
- To determine fees payable to the Non-executive Chairman
- To review the Remuneration Report
letter from the chairman of the Remuneration committee
Dear shareholders,
Meetings attended
3/3
3/3
3/3
Following a significant review of our incentive schemes last financial year and a successful endorsement by shareholders at the Company’s AGM
in January 2013 I am pleased to say that we have now implemented the changes we proposed.
I feel that the executive Directors have an appropriate mix of incentive around three key areas – delivering the Company’s strategic objectives,
delivering short-term profit growth, also focusing on longer term shareholder value. The benchmarking exercise we undertook as part of our
review also gives me confidence that we are providing adequate financial incentives in line with realistic but challenging targets and that we
have an appropriate balance between the short- and long-term interests of shareholders.
Whilst we are not yet bound by the new Directors’ Remuneration Report requirements we have endeavoured to include as many of the
new requirements as we are able in order to observe best practice, this includes splitting this report into a Policy Report and an Annual
Remuneration Report.
claire tiney,
Chair of Remuneration Committee
Introduction
This report has been prepared in accordance with Schedule 8 of the Accounting Regulations under the Companies Act 2006. The report also
meets the relevant requirements of the Listing Rules of the Financial Services Authority and describes how the Board has applied the principles
relating to the Directors’ remuneration in the Code. As required by the Act, a resolution to approve the report will be proposed at the Annual
General Meeting of the Company at which the financial statements will be approved.
Part 1 – Policy Report
Whilst there have been no major reviews of remuneration policy during the year and as such no advisors have been formally engaged,
the Committee have continued to take informal advice from Deloitte where it was required.
The main areas reviewed by the Committee have been the annual pay award and extension of the Company’s long-term incentive plan
to a level below the executive Management Team.
Remuneration policy
executive remuneration packages are prudently designed to attract, motivate and retain Directors of the high calibre needed to maintain the
Group’s position as a market leader and to reward them for enhancing value to shareholders. The performance measurement of the executive
Directors and key members of senior management and the determination of their annual remuneration package are undertaken by the
Committee. The remuneration of the Non-executive Directors is determined by the Board within limits set out in the Articles of Association.
None of the Committee has any personal financial interest (other than as shareholders), conflicts of interest arising from cross-directorships or
day-to-day involvement in running the business. The Committee makes recommendations to the Board on the individual remuneration packages
of each executive Director. No Director plays a part in any discussion about his/her own remuneration.
Plc
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| reMuneratiOn repOrt (CONTINUeD)
Executive Directors
Consistent with this policy, emoluments awarded to executive Directors are intended to be competitive. This is designed to incentivise executive
Directors and to align their interests with those of shareholders.
Base salary
purpose and link to
strategy
To attract and retain the best
employees. Reflects the role
and previous experience
operation
opportunity
changes in year
Annual increase in line
with the market or as
the Committee deem
appropriate based on role
and responsibilities and/or
external benchmarks
None – no pay rise was
awarded to staff and no
discretionary increase
was awarded
Reviewed annually in June
Increases based on average
salary increases of all staff
external benchmarking used
Any increases outside of this
at the Committee’s discretion
based on changes to role
and responsibilities and/or
external benchmarks
Benefits
To attract and retain the best
employees
Annual review of benefits by
Remuneration Committee
Car/allowance, private
medical insurance,
life insurance, income
protection, private fuel
None
Short-term incentive plan
(STIP)
Incentivise performance on
an annual basis against
key financial targets and
personal objectives
Objectives set against
strategic measures (financial
and non-financial)
Reward for exceeding
Company profit target
Long-term incentive plan
(LTIP)
Incentivise performance
over a rolling three year
period that aligns with
shareholders’ interests
Company (adjusted)
earnings Per Share need
to grow by a minimum
of c.7% p.a. on a three
year cumulative basis, post
any costs associated with
the award
Introduced in 2013
Introduced in 2013
Maximum of 20% of
salary can be paid in
cash for delivery against
strategic targets
Maximum of 55% of salary
can be paid in cash for
exceeding Company
profit target
Up to 100% of salary
awarded in shares.
25% of the award is
granted at c.7% adjusted
ePS growth p.a.
100% of the award is
granted at c.11% adjusted
ePS growth p.a.
Pensions
Part of overall retention
strategy
Money purchase scheme
(defined contribution)
5% employee contribution
10% Company contribution
Reviewed and amended
in 2012
42
Plc
Annual Report and Financial Statements 2013
Governance Directors’ contracts
executive Directors
It is the Company’s policy that executive Directors are offered permanent contracts of employment with a twelve month notice period. Under an
event of contract termination any severance payment would be subject to negotiation but would be with regard to length of service and the
prevailing notice period.
non-executive Directors
Non-executive Directors have specific terms of engagement and their remuneration is determined by the Board within the limits set by the Articles
of Association and based on independent surveys of fees paid to Non-executive Directors of similar companies. The basic fee paid to each
Non-executive Director in the period was £35,800 (2012: £35,000). In addition to the basic fee there is an additional allowance paid to the
Senior Independent Non-executive Director of £6,000 (2012: £6,000). With respect to the sub-committees of the Board there is a fee paid for
the additional role of sub-committee Chair of £5,000 (2012: £5,000). No additional fees are payable for members of each sub-committee
(2012: £nil) and each Non-executive Director may only be paid one additional fee. It is the Company’s policy that Non-executive Directors
should have contracts with an indefinite term providing for a maximum of six months’ notice. Independent Non-executive Directors cannot
participate in any of the Company’s share option schemes and are not eligible to join the Company’s pension scheme.
The role of Chairman is also Non-executive, with an indefinite term contract and a maximum six months’ notice. The Rt. Hon. Michael Jack
served as Chairman throughout the period and has received total remuneration of £102,000 (2012: £100,000).
The changes to Non-executive Director remuneration relates to the all-Company pay award which was granted in June 2012. Consistent with all
other employees, there has been no increase during 2013.
The details of the Non-executive Directors’ contracts are summarised in the table below:
name of director
J.M. Jack
A. White
C. Tiney
A. King
date of contract or letter
of appointment
unexpired
term
notice
period
26 January 1999
1 April 2008
12 December 2011
23 January 2012
N/A
N/A
N/A
N/A
6 months
6 months
6 months
6 months
Part 2 – Annual Remuneration Report
For the period ended 28 September 2013, the Group’s policy on remuneration was implemented as set out below.
Aggregate Directors’ remuneration
The total amounts for Directors’ remuneration were as follows:
Salaries, bonuses and benefits in kind
Money purchase pension contributions
Share-based payments
Amounts receivable under long-term incentive schemes
2013
£’000
1,077
59
–
–
1,136
2012
£’000
1,391
46
65
–
1,502
Plc
Annual Report and Financial Statements 2013
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Directors’ emoluments
name of director
basic
salary
£’000
Vehicle
allowance
£’000
benefits
in kind
£’000
Money purchase
pension
contributions
£’000
ltip
£’000
M.T.M. Williams
R. Parker
N.D. Ounstead
(resigned 25th April 2012)
non-executive directors
J.M. Jack
A. White
C. Tiney
A. King
372
223
–
102
42
41
41
821
24
21
–
–
–
–
–
45
2
2
–
–
–
–
–
4
37
22
–
–
–
–
–
59
–
–
–
–
–
–
–
–
stip
£’000
129
78
–
–
–
–
–
207
2013
£’000
564
346
–
102
42
41
41
1,136
2012
£’000
579
344
380
100
41
31
27
1,502
Bonus payments
As detailed in the Policy Report, executive Directors participate in an annual bonus scheme which is split across two measures. For the period ending
28 September 2013 the performance against these measures was as follows:
• Strategic Targets – four targets were set and three of these were delivered in full – 15% of salary was awarded
• Company Profit – the Company profit target was £12.8 million and the final declared adjusted pre-tax profit of £13 million was sufficient to
trigger an award of 19.7% of salary
Directors’ share options
Share options held by the Directors relate to long-term incentive plans (LTIP) and the Company Save As You earn scheme, which is eligible to all
employees. Both Mr Williams and Mr Parker participated in the 2013 Save As You earn Scheme and Mr Parker cancelled the 2011 Save As You
earn Scheme.
name of director
R. Parker
M. Williams
scheme
Save As You earn
April 2009
Save As You earn
April 2013
2013 LTIP
Save As You earn
April 2011
Save As You earn
April 2013
2013 LTIP
30 sep
2012
44,727
–
–
acquired
28 sep
2013
exercise
price
date
from which
exercisable
expiry
date
–
44,727
£0.165
1 Apr ‘14
1 Oct ‘14
8,372
8,372
£0.43
1Apr ‘16
1 Oct ‘16
483,371
483,371
–
1 Dec ‘15
1 Dec ‘25
5,625
–
5,625
£0.64
1 Apr ‘14
1 Oct ‘14
–
–
8,372
8,372
£0.43
1 Apr ‘16
1 Oct ‘16
805,618
805,618
–
1 Dec ‘15
1 Dec ‘25
The 2013 LTIP award was approved by shareholders at the Company’s AGM in January 2013. The awards are subject to a minimum cumulative
adjusted ePS over the period 2012/13 to 2014/15 and will vest on a straight-line basis of between 17.1p per share (25% of the award) and
18.4p per share (100% of the award).
The numbers of shares awarded is based on 100% of salary divided by the share price averaged across the final three days of the financial year
ended 28 September 2012. The 2013 LTIP was based on an average share price of 46.33p.
There were no outstanding share options held by Directors departing during the period.
The market price of the ordinary shares at 27 September 2013 was 93.0p and the range during the period was 46.5p to 94.0p.
44
Plc
Annual Report and Financial Statements 2013
Governance
Directors’ interests
The Directors had the following interest in the shares of the Company at the period end (all interests relate solely to ordinary shares).
name of director
M.T.M. Williams
R. Parker
J.M. Jack
A. White
C. Tiney
A. King
2013
no. of
ordinary
shares of
3.33p each
592,506
100,457
74,250
41,499
15,480
–
2013
holding
as %
of basic
salary
141.3%
48.7%
–
–
–
–
2012
no. of
ordinary
shares of
3.33p each
630,145
117,375
74,250
41,499
15,480
–
2012
Holding
as %
of basic
salary
69.9%
24.1%
–
–
–
–
Holding as % of basic salary is calculated using the closing share price of 93p (2012: 46p).
Performance graph
The following graph shows the Company’s performance, measured by total shareholder return (“TSR”), compared with the performance of the
FTSe 250 Index also measured by TSR. The index chosen for the comparison demonstrates the Group’s TSR in comparison to the average for
FTSe 250 companies.
The FTSe 250 index is considered a relevant comparator for the business.
Total shareholder return charting %
250
200
150
100
50
0
Oct-08
Topps Tiles Plc
FTSE 250
Approval
Oct-09
Oct-10
Oct-11
Oct-12
Oct-13
This report was approved by the Board of Directors on 26 November 2013 and signed on its behalf by:
claire tiney,
Chair of Remuneration Committee
Plc
Annual Report and Financial Statements 2013
45
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financial stateMents
| independent auditOr’s repOrt tO tHe MeMbers Of tOpps tiles plc
opinion on financial statements of topps tiles plc
In our opinion:
• the financial statements give a true and fair view of the state of the Group’s and of the parent Company’s affairs as at 28 September 2013
and of the Group’s profit and the parent Company’s loss for the 52 week period then ended;
• the Group financial statements have been properly prepared in accordance with International Financial Reporting Standards (IFRSs) as adopted
by the european Union;
• the parent Company financial statements have been properly prepared in accordance with United Kingdom Generally Accepted Accounting
Practice; and
• the financial statements have been prepared in accordance with the requirements of the Companies Act 2006 and, as regards the Group
financial statements, Article 4 of the IAS Regulation.
The financial statements comprise the Consolidated Statement of Financial Performance, the Consolidated Statement of Comprehensive Income,
the Consolidated Statement of Financial Position, the parent Company balance sheet and the related notes 1 to 7, the Consolidated Cash Flow
Statement, the Consolidated Statement of Changes in equity, and the related notes 1 to 29. The financial reporting framework that has been
applied in the preparation of the Group financial statements is applicable law and IFRSs as adopted by the european Union. The financial
reporting framework that has been applied in the preparation of the parent Company financial statements is applicable law and United Kingdom
Accounting Standards (United Kingdom Generally Accepted Accounting Practice).
Separate opinion in relation to IFRSs as issued by the IASB
As explained in note 2 to the Group financial statements, the Group in addition to complying with its legal obligation to apply IFRSs as adopted
by the european Union, has also applied IFRSs as issued by the International Accounting Standards Board (IASB).
In our opinion the Group financial statements comply with IFRSs as issued by the IASB.
Going concern
As required by the Listing Rules we have reviewed the Directors’ statement on page 18 that the Group is a going concern. We confirm that:
• we have not identified material uncertainties related to events or conditions that may cast significant doubt on the Group’s ability to continue
as a going concern which we believe would need to be disclosed in accordance with IFRSs as adopted by the european Union; and
• we have concluded that the Directors’ use of the going concern basis of accounting in the preparation of the financial statements is appropriate.
However, because not all future events or conditions can be predicted, this statement is not a guarantee as to the Group’s ability to continue as
a going concern.
Our assessment of risks of material misstatement
The assessed risks of material misstatement described below are those that had the greatest effect on our audit strategy, the allocation of resources
in the audit and directing the efforts of the engagement team:
• the completeness of inventory provisions, including an assessment of the appropriateness of the recorded slow-moving inventory provisions;
reflecting their judgmental nature and the substantial inventory holding across the store portfolio and warehouse;
• the appropriateness and completeness of onerous lease and dilapidation provisions, including the potential impairment of property, plant and
equipment in loss-making stores. This reflects their judgemental nature, which includes an assessment of the likely future periods over which
leasehold properties may be vacant, estimates of future costs of making good dilapidations and an assessment of the expected future cash flows
for loss-making stores; and
• the financial reporting implications of the upgrade to the Group’s financial accounting software; reflecting its fundamental importance to the
Group’s operations and financial reporting, and its complex nature.
Our audit procedures relating to these matters were designed in the context of our audit of the financial statements as a whole, and not to express
an opinion on individual accounts or disclosures. Our opinion on the financial statements is not modified with respect to any of the risks described
above, and we do not express an opinion on these individual matters.
46
Plc
Annual Report and Financial Statements 2013
An overview of the scope of our audit
Given the nature of the Group’s corporate structure where all evidence relating to each component is compiled at the Group’s head office, we
performed an audit covering 100% of the Group’s trading components and accordingly our samples were selected from 100% of the Group’s
total assets, revenue and profit. With the exception of dormant components, no components were scoped out of the audit.
The Group audit team followed a programme of planned visits to a sample of stores as part of their consideration of the adequacy of the design
and implementation of internal controls and conduct substantive tests of stockcount procedures. This programme has been designed so that the
Group audit team visits different store locations each year depending upon risks identified.
We scoped our response to the risks identified above as follows:
• we assessed the completeness of inventory provisions by challenging management’s principal assumptions in identifying and providing for slow-
moving and other at-risk inventory. We identified at-risk inventory by reference to the quantities of inventory held at year end relative to historical
sales, forecast sales levels of discontinued lines and sales made after the year end. We compared the stock losses estimated by management to
historical stock losses within the business and we challenged management’s assumptions around the percentage provision made for each stock
line by reference to our knowledge of the industry;
• we assessed the appropriateness and completeness of onerous lease, dilapidation and related asset impairment provisions by challenging
management’s principal assumptions in identifying and providing for the Group’s at-risk properties. Deloitte property specialists assisted us in
evaluating the Directors’ estimates, including the review and challenge of the advice received by the Group from its property team, for example,
relating to the length of time anticipated to exit certain onerous lease agreements. We also challenged management’s assumptions in relation
to the risk of asset impairment at loss-making stores by comparing projected future trading to current trading and management’s track record of
returning such stores to profit; and
• we assessed the financial reporting implications of the upgrade to the Group’s financial accounting software by considering the risks of
incomplete and/or inaccurate transfer of data from the old to the new system and of weaknesses in the subsequent operation of the new
accounting system. Deloitte IT specialists assisted us in assessing the controls around the data transfer and subsequent operation of the new
system, and we performed audit procedures to substantiate that the transfer of key financial data was accurate.
The Audit Committee’s consideration of these risks is set out on page 39.
Our application of materiality
We apply the concept of materiality both in planning and performing our audit, and in evaluating the effect of misstatements on our audit and on
the financial statements. For the purposes of determining whether the financial statements are free from material misstatement, we define materiality
as the magnitude of misstatement that makes it probable that the economic decisions of a reasonably knowledgeable person, relying on the
financial statements, would be changed or influenced.
When establishing our overall audit strategy, we determined a magnitude of uncorrected misstatements that we judged would be material for the
financial statements as a whole. We determined materiality for the Group to be £0.5 million, which is 5% of pre-tax profit after adjusting for the
fair value gain on interest rate derivatives which was settled during the year.
We agreed with the Audit Committee that we would report to the Committee all audit differences in excess of £10,000, as well as differences
below that threshold which, in our view, warranted reporting on qualitative grounds.
Plc
Annual Report and Financial Statements 2013
47
84 – 96Additional Information01 – 31Strategic Report32 – 45Governance46 – 83Financial Statements financial stateMents
| independent auditOr’s repOrt tO tHe MeMbers Of tOpps tiles plc
(CONTINUeD)
Opinion on other matters prescribed by the Companies Act 2006
In our opinion:
• the part of the Directors’ Remuneration Report to be audited has been properly prepared in accordance with the Companies Act 2006; and
• the information given in the Strategic Report and the Directors’ Report for the financial year for which the financial statements are prepared is
consistent with the financial statements.
Matters on which we are required to report by exception
adequacy of explanations received and accounting records
Under the Companies Act 2006 we are required to report to you if, in our opinion:
• we have not received all the information and explanations we require for our audit; or
• adequate accounting records have not been kept by the parent Company, or returns adequate for our audit have not been received from
branches not visited by us; or
• the parent Company financial statements are not in agreement with the accounting records and returns.
We have nothing to report in respect of these matters.
Directors’ remuneration
Under the Companies Act 2006 we are also required to report if in our opinion certain disclosures of Directors’ remuneration have not been
made or the part of the Directors’ Remuneration Report to be audited is not in agreement with the accounting records and returns. Under the Listing
Rules we are required to review certain elements of the Directors’ Remuneration Report. We have nothing to report arising from these matters or
our review.
corporate Governance statement
Under the Listing Rules we are also required to review the part of the Corporate Governance Statement relating to the Company’s compliance
with nine provisions of the UK Corporate Governance Code. We have nothing to report arising from our review.
our duty to read other information in the annual report
Under the ISAs (UK and Ireland), we are required to report to you if, in our opinion, information in the annual report is:
• materially inconsistent with the information in the audited financial statements; or
• apparently materially incorrect based on, or materially inconsistent with, our knowledge of the group acquired in the course of performing
our audit; or
• is otherwise misleading.
In particular, we are required to consider whether we have identified any inconsistencies between our knowledge acquired during the audit and
the Directors’ statement that they consider the Annual Report is fair, balanced and understandable and whether the Annual Report appropriately
discloses those matters that we communicated to the Audit Committee which we consider should have been disclosed. We confirm that we have
not identified any such inconsistencies or misleading statements.
48
Plc
Annual Report and Financial Statements 2013
Respective responsibilities of Directors and auditor
As explained more fully in the Directors’ Responsibilities Statement, the Directors are responsible for the preparation of the financial statements
and for being satisfied that they give a true and fair view. Our responsibility is to audit and express an opinion on the financial statements in
accordance with applicable law and International Standards on Auditing (UK and Ireland). Those standards require us to comply with the Auditing
Practices Board’s ethical Standards for Auditors.
This report is made solely to the Company’s members, as a body, in accordance with Chapter 3 of Part 16 of the Companies Act 2006.
Our audit work has been undertaken so that we might state to the Company’s members those matters we are required to state to them in an
auditor’s 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 and the Company’s members as a body, for our audit work, for this report, or for the opinions we have formed.
Scope of the audit of the financial statements
An audit involves obtaining evidence about the amounts and disclosures in the financial statements sufficient to give reasonable assurance that the
financial statements are free from material misstatement, whether caused by fraud or error. This includes an assessment of: whether the accounting
policies are appropriate to the Group’s and the parent Company’s circumstances and have been consistently applied and adequately disclosed;
the reasonableness of significant accounting estimates made by the Directors; and the overall presentation of the financial statements. In addition,
we read all the financial and non-financial information in the annual report to identify material inconsistencies with the audited financial statements
and to identify any information that is apparently materially incorrect based on, or materially inconsistent with, the knowledge acquired by us in
the course of performing the audit. If we become aware of any apparent material misstatements or inconsistencies we consider the implications
for our report.
timothy edge
(Senior statutory auditor) for and on behalf of Deloitte LLP
Chartered Accountants and Statutory Auditor
Manchester, United Kingdom
26 November 2013
Plc
Annual Report and Financial Statements 2013
49
84 – 96Additional Information01 – 31Strategic Report32 – 45Governance46 – 83Financial Statements financial stateMents
| cOnsOlidated stateMent Of financial perfOrMance
For the 52 weeks ended 28 September 2013
group revenue – continuing operations
Cost of sales
Gross profit
employee profit sharing
Distribution and selling costs*
Other operating expenses
Administrative costs*
Sales and marketing costs*
group operating profit
Other gains
Investment revenue
Finance costs
Fair value gain/(loss) on interest rate derivatives
profit before taxation
Taxation
profit for the period attributable to equity holders of the company
earnings per ordinary share
from continuing operations
– basic
– diluted
52 weeks
ended
28 september
2013
£’000
notes
3
177,849
(70,826)
restated*
52 weeks
ended
29 september
2012
£’000
177,693
(71,144)
107,023
106,549
(6,251)
(68,483)
(4,656)
(10,025)
(3,763)
13,845
109
170
(3,733)
210
10,601
(1,457)
9,144
(6,023)
(66,734)
(4,755)
(9,482)
(4,093)
15,462
1,624
152
(4,108)
(637)
12,493
(2,724)
9,769
4.76p
4.73p
5.14p
5.09p
6
7
7
7
4
8
26
10
* during the period the group reviewed its internal reporting structure and reclassified certain departments’ expenditure into a more appropriate operating cost caption.
the comparative figures have been restated to reflect this.
| cOnsOlidated stateMent Of cOMpreHensiVe incOMe
For the 52 weeks ended 28 September 2013
Profit for the period
Total comprehensive income for the period attributable
to equity holders of the parent Company
52 weeks
ended
28 september
2013
£’000
52 weeks
ended
29 september
2012
£’000
9,144
9,769
9,144
9,769
50
Plc
Annual Report and Financial Statements 2013
financial stateMents
| cOnsOlidated stateMent Of financial pOsitiOn
As at 28 September 2013
non-current assets
Goodwill
Property, plant and equipment
Deferred tax asset
current assets
Inventories
Trade and other receivables
Cash and cash equivalents
total assets
current liabilities
Trade and other payables
Current tax liabilities
Provisions
net current assets
non-current liabilities
Bank loans
Derivative financial instruments
Deferred tax liabilities
Provisions
total liabilities
net liabilities
equity
Share capital
Share premium
Own shares
Merger reserve
Share-based payment reserve
Capital redemption reserve
Retained earnings
total deficit attributable to equity holders of the parent
The accompanying notes are an integral part of these financial statements.
notes
2013
£’000
2012
£’000
11
12
19
14
15
16
19
17
18
19
19
20
21
22
23
24
25
26
245
35,348
–
35,593
26,196
7,711
18,443
52,350
87,943
245
35,016
139
35,400
25,917
7,085
14,442
47,444
82,844
(35,929)
(26,099)
(3,734)
(1,014)
(40,677)
11,673
(54,820)
–
(426)
(2,204)
(98,127)
(10,184)
6,404
1,492
(10)
(399)
649
20,359
(38,679)
(10,184)
(5,809)
(820)
(32,728)
14,716
(59,555)
(6,107)
–
(1,802)
(100,192)
(17,348)
6,395
1,481
(4)
(399)
566
20,359
(45,746)
(17,348)
The financial statements of Topps Tiles Plc, registered number 3213782, on pages 50 to 80 were approved by the Board of Directors and
authorised for issue on 26 November 2013. They were signed on its behalf by:
matt Williams,
Director
rob parker,
Director
Plc
Annual Report and Financial Statements 2013
51
84 – 96Additional Information01 – 31Strategic Report32 – 45Governance46 – 83Financial Statements financial stateMents
| cOnsOlidated stateMent Of cHanges in equity
For the 52 weeks ended 28 September 2013
Balance at
1 October 2011
Profit and total comprehensive
income for the period
Issue of share capital
Dividends
Credit to equity for equity-settled
share-based payments
Deferred tax on share-based
payment transactions
Balance at
29 September 2012
Profit and total comprehensive
income for the period
Issue of share capital
Dividends
Own shares purchased in the
period
Credit to equity for equity-settled
share-based payments
Deferred tax on share-based
payment transactions
balance at
28 september 2013
share
capital
£’000
share
premium
£’000
own
shares
£’000
merger
reserve
£’000
share-
based
payment
reserve
£’000
capital
redemption
reserve
£’000
retained
earnings
£’000
total
equity
£’000
6,279
1,022
(4)
(399)
543
20,359
(53,262)
(25,462)
–
116
–
–
–
–
459
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
23
–
–
–
–
–
–
9,769
–
(2,087)
9,769
575
(2,087)
–
23
(166)
(166)
6,395
1,481
(4)
(399)
566
20,359
(45,746)
(17,348)
–
9
–
–
–
–
–
11
–
–
–
–
–
–
–
(6)
–
–
–
–
–
–
–
–
–
–
–
–
83
–
–
–
–
–
–
–
9,144
–
(2,396)
9,144
20
(2,396)
–
–
319
(6)
83
319
6,404
1,492
(10)
(399)
649
20,359
(38,679)
(10,184)
52
Plc
Annual Report and Financial Statements 2013
financial stateMents
| cOnsOlidated casH flOw stateMent
For the 52 weeks ended 28 September 2013
cash flow from operating activities
Profit for the period
Taxation
Fair value (gain)/loss on interest rate derivatives
Finance costs
Investment revenue
Other gains
Group operating profit
Adjustments for:
Depreciation of property, plant and equipment
Impairment of property, plant and equipment
Share option charge
(Increase)/Decrease in trade and other receivables
Increase in inventories
Increase in payables
cash generated by operations
Interest paid
Taxation paid
Net cash from operating activities
investing activities
Interest received
Purchase of property, plant and equipment
Proceeds on disposal of property, plant and equipment
Net cash used in investment activities
financing activities
Dividends paid
Proceeds from issue of share capital
Settlement of interest rate hedge
Repayment of bank loans
Net cash used in financing activities
Net increase in cash and cash equivalents
Cash and cash equivalents at beginning of period
cash and cash equivalents at end of period
52 weeks
ended
28 september
2013
£’000
52 weeks
ended
29 september
2012
£’000
9,144
1,457
(210)
3,733
(170)
(109)
13,845
4,258
553
83
(486)
(279)
10,209
28,183
(3,265)
(2,649)
22,269
199
(5,586)
398
(4,989)
(2,396)
14
(5,897)
(5,000)
(13,279)
4,001
14,442
18,443
9,769
2,724
637
4,108
(152)
(1,624)
15,462
3,988
525
23
62
(2,117)
1,782
19,725
(3,145)
(2,161)
14,419
266
(6,522)
5,419
(837)
(2,087)
575
(6,716)
–
(8,228)
5,354
9,088
14,442
Plc
Annual Report and Financial Statements 2013
53
84 – 96Additional Information01 – 31Strategic Report32 – 45Governance46 – 83Financial Statements financial stateMents
| nOtes tO tHe financial stateMents
For the 52 weeks ended 28 September 2013
1 General information
Topps Tiles Plc is a company incorporated in the United Kingdom under the Companies Act 2006. The address of the registered office is given
on page 33. The nature of the Group’s operations and its principal activity are set out in the Directors’ Report on page 34.
These financial statements are presented in pounds Sterling because that is the currency of the primary economic environment in which the Group
operates. Foreign operations are included in accordance with the policies set out in note 18.
adoption of new and revised standards
In the current period, the following new and revised standards and interpretations have been adopted and may affect the future amounts reported
in the financial statements:
Amendment to IFRS 1 Limited exemption from Comparative IFRS 7 Disclosures for First-time Adopters. The amendment clarifies the required
level of disclosure around credit risk and collateral held and provides relief from disclosures of renegotiated financial assets. The impact of this
amendment has been to reduce the level of disclosure provided on collateral that the entity holds as security on financial assets that are past, due
or impaired.
Standards not affecting the reported results nor the financial position
The following new and revised Standards and Interpretations have been adopted in the current year. Their adoption has not had any significant
impact on the amounts reported in these financial statements that may impact the accounting for future transactions and arrangements.
Amendments to IAS 32 – Classification of Rights Issues. Under the amendment, rights issues of instruments issued to acquire a fixed number
of an entity’s own non-derivative equity instrument for a fixed amount in any currency and which otherwise meet the definition of equity are
classified as equity.
Improvements to IFRSs 2010. Aside from those items already identified above, the amendments made to standards under the 2010 improvements
to IFRSs have had no impact and will not have any impact on the Group.
Improvements to IFRSs 2010. Aside from those items already identified above, the amendments made to standards under the 2010 improvements
to IFRSs have had no impact on the Group.
At the date of authorisation of these financial statements, the following Standards and Interpretations which have not been applied in these
financial statements were in issue but not yet effective (and in some cases had not yet been adopted by the eU):
IFRS 7 (amended): Disclosures – Transfers of Financial Assets
IFRS 9 – Financial Instruments
IFRS 10 – Consolidated Financial Statements
IFRS 11 – Joint Arrangements
IFRS 12 – Disclosure of Interests in Other entities
IFRS 13 – Fair Value Measurement
IAS 1 – (amended): Presentation of Items of Other Comprehensive Income
IAS 12 (amended): Deferred Tax: Recovery of Underlying Assets
IAS 19 (revised): employee Benefits
IAS 27 (revised): Separate Financial Statements
The Directors anticipate that the adoption of these Standards and Interpretations in future periods will have no material impact on the financial
statements of the Group.
54
Plc
Annual Report and Financial Statements 2013
2 Accounting policies
a) Basis of accounting
The financial statements have been prepared in accordance with International Financial Reporting Standards “IFRSs”. The financial statements have
also been prepared in accordance with IFRSs adopted by the european Union and therefore the Group financial statements comply with Article 4
of the eU IAS regulation. The financial statements have been prepared on the historical cost basis, except for the revaluation of derivative financial
instruments. Historical cost is generally based on the fair value of the consideration given in exchange for the assets.
b) Going concern
Based on a detailed review of the risks and uncertainties discussed within the Strategic and Operational Review, and management’s current
expectations, the Board believes that 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 current economic climate creates a degree of uncertainty in the outlook which when combined with the financial covenants included in our
loan facilities, has led the Board to conduct a detailed review of a number of different trading scenarios, including reasonably possible downsides,
as well as possible mitigating actions, should they be required.
Based on this analysis the Board has concluded that the Company would be able to fully meet all of its financial commitments for the foreseeable
future and therefore consider it appropriate to prepare the financial statements on the going concern basis.
The principal accounting policies adopted are set out below.
c) Basis of consolidation
The consolidated financial statements incorporate the financial statements of the Company and entities controlled by the Company (its subsidiaries).
Control is achieved where the Company has the power to govern the financial and operating policies of an investee entity so as to obtain benefits
from its activities.
The results of subsidiaries acquired or disposed of during the period are included in the Consolidated Statement of Financial Performance from
the effective date of acquisition or up to the effective date of disposal, as appropriate. Where necessary, adjustments are made to the financial
statements of subsidiaries to bring the accounting policies used into line with those used by the Group. All intra-group transactions, balances,
income and expenses are eliminated on consolidation.
d) Financial period
The accounting period ends on the Saturday which falls closest to 30 September, resulting in financial periods of either 52 or 53 weeks.
Throughout the financial statements, Directors’ Report and Strategic Report, references to 2013 mean at 28 September 2013 or the 52 weeks
then ended; references to 2012 mean at 29 September 2012 or the 52 weeks then ended.
e) Goodwill
Goodwill arising in a business combination is recognised as an asset at the date that control is acquired (the acquisition date). Goodwill is
measured as the excess of the sum of the consideration transferred, the amount of any non-controlling interest in the acquiree and the fair value
of the acquirer’s previously held equity interest (if any) in the entity over the net of the acquisition-date amounts of the identifiable assets acquired
and the liabilities assumed.
If, after reassessment, the Group’s interest in the fair value of the acquiree’s identifiable net assets exceeds the sum of the consideration transferred,
the amount of any non-controlling interest in the acquiree and the fair value of the acquirer’s previously held equity interest in the acquiree (if any),
the excess is recognised immediately in profit or loss as a bargain purchase gain.
Goodwill is not amortised but is reviewed for impairment at least annually. For the purpose of impairment testing, goodwill is allocated to each
of the Group’s cash-generating units expected to benefit from the synergies of the combination. Cash-generating units to which goodwill has been
allocated are tested for impairment annually, or more frequently when there is an indication that the unit may be impaired. If the recoverable
amount of the cash-generating unit is less than the carrying amount of the unit, the impairment loss is allocated first to reduce the carrying amount
of any goodwill allocated to the unit and then to the other assets of the unit pro rata on the basis of the carrying amount of each asset in the unit.
An impairment loss recognised for goodwill is not reversed in a subsequent period.
On disposal of a subsidiary, the attributable amount of goodwill is included in the determination of the profit or loss on disposal.
Goodwill arising on acquisitions before the date of transition to IFRSs has been retained at the previous UK GAAP amounts subject to being tested
for impairment at that date. Goodwill of £15,080,000 written off to reserves under UK GAAP prior to 1998 has not been reinstated and will not
be included in determining any subsequent profit or loss on disposal.
Plc
Annual Report and Financial Statements 2013
55
84 – 96Additional Information01 – 31Strategic Report32 – 45Governance46 – 83Financial Statements financial stateMents
| nOtes tO tHe financial stateMents (CONTINUeD)
2 Accounting policies (continued)
f) Revenue recognition
Revenue is measured at the fair value of the consideration received or receivable and represents amounts receivable for goods and services
provided in the normal course of business, net of discounts, VAT and other sales-related taxes.
Revenue from the sale of goods is recognised when all the following conditions are satisfied:
• the Group has transferred to the buyer the significant risks and rewards of ownership of the goods;
• the Group retains neither continuing managerial involvement to the degree usually associated with ownership nor effective control over
the goods sold;
• the amount of revenue can be measured reliably;
• it is probable that the economic benefits associated with the transaction will flow to the entity; and
• the costs incurred or to be incurred in respect of the transaction can be measured reliably.
Revenue for the Tesco Clubcard scheme is recognised on a gross profit basis as services are provided on an agency basis.
Sales returns are provided for based on past experience and deducted from income.
Interest income is recognised when it is probable that the economic benefits will flow to the Group and the amount of income can be measured
reliably. Interest income is accrued on a time basis, by reference to the principal outstanding and at the effective interest rate applicable, which
is the rate that exactly discounts estimated future cash receipts through the expected life of the financial asset to that asset’s net carrying amount
on initial recognition.
Dividend income from investments is recognised when the shareholders’ rights to receive payment have been established (provided that it
is probable that the economic benefit will flow to the Group and the amount of income can be measured reliably).
g) exceptional items
Items are classed as exceptional where they relate to one-off costs incurred in the period that the Directors do not expect to be repeated in the
same magnitude on an annual basis, or where the Directors consider the separate disclosure to be necessary to understand the Group’s
performance. The principles applied in identifying exceptional costs are consistent between periods.
h) Property, plant and equipment
Property, plant and equipment are stated at cost less accumulated depreciation and any recognised impairment loss.
Depreciation is charged so as to write off the cost of assets, less estimated residual value, over their estimated useful lives, on the following bases:
Freehold buildings
2% per annum on cost on a straight-line basis
Short leasehold land and buildings
over the period of the lease, up to 25 years on a straight-line basis
Fixtures and fittings
Motor vehicles
over 10 years or over four years per annum as appropriate
25% per annum on a reducing balance basis
Freehold land is not depreciated.
Residual value is calculated on prices prevailing at the date of acquisition.
Assets held in the course of construction for production, supply or administrative purposes, or for purposes not yet determined, are carried at cost,
less any recognised impairment loss. Cost includes professional fees and, for qualifying assets, borrowing costs capitalised in accordance with the
Group’s accounting policy. Depreciation of these assets, on the same basis as other property assets, commences when the assets are ready for
their intended use.
The gain or loss arising on the disposal or retirement of an asset is determined as the difference between the sales proceeds and the carrying
amount of the asset and is recognised in the statement of financial performance.
56
Plc
Annual Report and Financial Statements 2013
2 Accounting policies (continued)
i) impairment of tangible and intangible assets excluding goodwill
At each period end, the Group reviews the carrying amounts of its tangible assets to determine whether there is any indication that those assets
have suffered an impairment loss. If any such indication exists, the recoverable amount of the asset is estimated in order to determine the extent
of the impairment loss (if any). Where the asset does not generate cash flows that are independent from other assets, the Group estimates the
recoverable amount of the cash-generating unit to which the asset belongs. An intangible asset with an indefinite useful life is tested for impairment
at least annually and whenever there is an indication that the asset may be impaired.
Recoverable amount is the higher of fair value less costs to sell and value in use. In assessing value in use, the estimated future post-tax cash flows
are discounted to their present value using a post-tax discount rate that reflects current market assessments of the time value of money and the risks
specific to the asset for which the estimates of future cash flows have not been adjusted.
If the recoverable amount of an asset (or cash-generating unit) is estimated to be less than its carrying amount, the carrying amount of the asset
(cash-generating unit) is reduced to its recoverable amount. An impairment loss is recognised as an expense immediately, unless the relevant asset
is carried at a re-valued amount, in which case the impairment loss is treated as a revaluation decrease.
Where an impairment loss subsequently reverses, the carrying amount of the asset (cash-generating unit) is increased to the revised estimate
of its recoverable amount, but so that the increased carrying amount does not exceed the carrying amount that would have been determined
had no impairment loss been recognised for the asset (cash-generating unit) in prior years. A reversal of an impairment loss is recognised
as income immediately, unless the relevant asset is carried at a revalued amount, in which case the reversal of the impairment loss is treated
as a revaluation increase.
j) inventories
Inventories are stated at the lower of cost and net realisable value and relate solely to finished goods for resale. Cost comprises the purchase
price of materials and an attributable proportion of distribution overheads based on normal levels of activity and is valued at standard cost.
Net realisable value represents the estimated selling price, less costs to be incurred in marketing, selling and distribution. Provision is made
for those items of inventory where the net realisable value is estimated to be lower than cost. The net replacement value of inventories is not
considered materially different from that stated in the consolidated statement of financial position.
k) taxation
The tax expense represents the sum of the tax currently payable and deferred tax.
The tax currently payable is based on taxable profit for the period. Taxable profit differs from net profit as reported in the statement of financial
performance because it excludes items of income or expense that are taxable or deductible in other periods and it further excludes items that
are never taxable or deductible. The Group’s liability for current tax is calculated using tax rates that have been enacted or substantively enacted
by the balance sheet date.
Deferred tax is the tax expected to be payable or recoverable on differences between the carrying amounts of assets and liabilities in the financial
statements and the corresponding tax bases used in the computation of taxable profit, and is accounted for using the balance sheet liability
method. Deferred tax liabilities are generally recognised for all taxable temporary differences and deferred tax assets are recognised to the extent
that it is probable that taxable profits will be available against which deductible temporary differences can be utilised. Such assets and liabilities
are not recognised if the temporary difference arises from the initial recognition of goodwill or from the initial recognition (other than in a business
combination) of other assets and liabilities in a transaction that affects neither the tax profit nor the accounting profit.
Deferred tax liabilities are recognised for taxable temporary differences arising on investments in subsidiaries, and interests in jointly controlled
entities, except where the Group is able to control the reversal of the temporary difference and it is probable that the temporary difference will not
reverse in the foreseeable future.
Deferred tax is calculated at the tax rates that are expected to apply in the period when the liability is settled or the asset is realised based on tax
laws and rates that have been enacted at the balance sheet date. Deferred tax is charged or credited in the statement of financial performance,
except when it relates to items charged or credited directly to equity, in which case the deferred tax is also dealt with in equity.
Deferred tax assets and liabilities are offset when there is a legally enforceable right to set off current tax assets against current tax liabilities
and when they relate to income taxes levied by the same taxation authority and the Group intends to settle its current tax assets and liabilities
on a net basis.
Plc
Annual Report and Financial Statements 2013
57
84 – 96Additional Information01 – 31Strategic Report32 – 45Governance46 – 83Financial Statements financial stateMents
| nOtes tO tHe financial stateMents (CONTINUeD)
2 Accounting policies (continued)
l) Foreign currency
The individual financial statements of each Group company are presented in the currency of the primary economic environment in which it
operates (its functional currency). For the purpose of the consolidated financial statements, the results and financial position of each Group
company are expressed in pounds Sterling, which is the functional currency of the Company, and the presentational currency for the consolidated
financial statements.
Transactions in currencies other than the entity’s functional currency (foreign currencies) are recorded at the rates of exchange prevailing on the
dates of transactions. At each period end, monetary assets and liabilities that are denominated in foreign currencies are retranslated at the rates
prevailing on that date. Non-monetary items carried at fair value that are denominated in foreign currencies are retranslated at the rates prevailing
at the date when the fair value was determined. Non-monetary items that are measured in terms of historical cost in a foreign currency are
not retranslated.
exchange differences arising on the settlement of monetary items, and on the retranslation of monetary items, are included in the statement
of financial performance for the period.
exchange differences arising on the retranslation of non-monetary items carried at fair value are included in statement of financial performance
for the period.
exchange differences are recognised in profit or loss in the period in which they arise except for:
• exchange differences on transactions entered into to hedge certain foreign currency risks (see below under financial instruments/hedge
accounting); and
• exchange differences on monetary items receivable from or payable to a foreign operation for which settlement is neither planned nor likely
to occur (therefore forming part of the net investment in the foreign operation), which are recognised initially in other comprehensive income and
reclassified from equity to profit or loss on disposal or partial disposal of the net investment.
m) leases
Rentals payable under operating leases are charged to income on a straight-line basis over the term of the relevant lease even where payments
are not made on such a basis, except where another more systematic basis is more representative of the time pattern in which economic benefits
from the lease asset are consumed. Contingent rentals arising under operating leases are recognised as an expense in the period in which they
are incurred.
In the event that lease incentives are received to enter into operating leases, such incentives are recognised as a liability. The aggregate benefit
of incentives is recognised as a reduction of rental expense on a straight-line basis, except where another systematic basis is more representative
of the time pattern in which economic benefits from the leased asset are consumed.
n) investments
Fixed asset investments are shown at cost less provision for impairment.
o) Retirement benefit costs
For defined contribution schemes, the amount charged to the statement of financial performance in respect of pension costs is the contributions
payable in the period. Differences between contributions payable in the period and contributions actually paid are shown as either accruals
or prepayments in the balance sheet.
p) Finance costs
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.
All other finance costs of debt are recognised in the statement of financial performance over the term of the debt at a constant rate on the
carrying amount.
58
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Annual Report and Financial Statements 2013
2 Accounting policies (continued)
q) Financial instruments
Financial assets and financial liabilities are recognised in the Group’s statement of financial position when the Group becomes a party to the
contractual provisions of the instrument.
All financial assets are recognised and derecognised on a trade date where the purchase or sale of a financial asset is under a contract whose
terms require delivery of the financial asset within the timeframe established by the market concerned, and are initially measured at fair value, plus
transaction costs, except for those financial assets classified as at fair value through profit or loss, which are initially measured at fair value.
Financial assets are classified into the following specified categories: financial assets “at fair value through profit or loss” (“FVTPL”), “held-to-maturity”
investments, “available-for-sale” (“AFS”) financial assets and “loans and receivables”. The classification depends on the nature and purpose of the
financial assets and is determined at the time of initial recognition.
Financial assets at FVTPL
Financial assets are classified as at FVTPL where the financial asset is either held for trading or it is designated as at FVTPL. The Group has no
designated FVTPL financial assets.
A Financial asset is classified as held for trading if:
• it has been acquired principally for the purpose of selling in the near future; or
• it is a part of an identified portfolio of financial instruments that the Group manages together and has a recent actual pattern of short-term
profit-taking; or
• it is a derivative that is not designated and effective as a hedging instrument.
Financial assets at FVTPL are stated at fair value, with any resultant gain or loss recognised in profit or loss. The Directors use their judgement
in selecting an appropriate valuation technique for financial instruments not quoted in an active market. Valuation techniques commonly used
by market practitioners are applied, such as discounted cash flows and assumptions regarding market volatility.
Loans and receivables
Trade receivables, loans, and other receivables that have fixed or determinable payments that are not quoted in an active market are classified
as loans and receivables. Loans and receivables are measured at amortised cost using the effective interest method, less any impairment.
Interest income is recognised by applying the effective interest rate, except for short-term receivables when the recognition of interest would
be immaterial.
Effective interest method
The effective interest method is a method of calculating the amortised cost of a debt instrument and of allocating interest income over the relevant
period. The effective interest rate is the rate that exactly discounts estimated future cash receipts (including all fees on points paid or received that
form an integral part of the effective interest rate, transaction costs and other premiums or discounts) through the expected life of the debt instrument,
or, where appropriate, a shorter period, to the net carrying amount on initial recognition.
Income is recognised on an effective interest basis for debt instruments other than those financial assets and liabilities classified as at FVTPL.
Impairment of financial assets
Financial assets, other than those at FVTPL, are assessed for indicators of impairment at each Statement of Financial Position date. Financial assets
are impaired where there is objective evidence that, as a result of one or more events that occurred after the initial recognition of the financial
asset, the estimated future cash flows of the investment have been impacted.
For certain categories of financial asset, such as trade receivables, assets that are assessed not to be impaired individually are subsequently
assessed for impairment on a collective basis. Objective evidence of impairment for a portfolio of receivables could include the Group’s past
experience of collecting payments, an increase in the number of delayed payments in the portfolio past the average credit period of 43 days,
as well as observable changes in national or local economic conditions that correlate with default on receivables.
For financial assets carried at amortised cost, the amount of the impairment is the difference between the asset’s carrying amount and the present
value of estimated future cash flows, discounted at the financial asset’s original effective interest rate.
The carrying amount of the financial asset is reduced by the impairment loss directly for all financial assets with the exception of trade receivables,
where the carrying amount is reduced through the use of an allowance account. When a trade receivable is considered uncollectible, it is
written off against the allowance account. Subsequent recoveries of amounts previously written off are credited against the allowance account.
Changes in the carrying amount of the allowance account are recognised in profit or loss.
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2 Accounting policies (continued)
q) Financial instruments (continued)
If, in a subsequent period, the amount of the impairment loss decreases and the decrease can be related objectively to an event occurring after
the impairment was recognised, the previously recognised impairment loss is reversed through profit or loss to the extent that the carrying amount
of the investment at the date the impairment is reversed does not exceed what the amortised cost would have been had the impairment not
been recognised.
Cash and cash equivalents
Cash and cash equivalents comprise cash on hand and demand deposits, and other short-term highly liquid investments that are readily convertible
to a known amount of cash within three months and are subject to an insignificant risk of changes in value.
Derecognition of financial assets
The Group derecognises a financial asset only when the contractual rights to the cash flows from the asset expire; or it transfers the financial
asset and substantially all the risks and rewards of ownership of the asset to another entity. If the Group neither transfers nor retains substantially
all the risks and rewards of ownership and continues to control the transferred asset, the Group recognises its retained interest in the asset and an
associated liability for amounts it may have to pay. If the Group retains substantially all the risks and rewards of ownership of a transferred financial
asset, the Group continues to recognise the financial asset and also recognises a collateralised borrowing for the proceeds received.
Financial liabilities and equity
Financial liabilities and equity instruments are classified according to the substance of the contractual arrangements entered into. An equity
instrument is any contract that evidences a residual interest in the assets of the Group after deducting all of its liabilities. equity instruments issued
by the Group are recorded at the proceeds received, net of direct issue costs.
Financial liabilities are classified as at FVTPL where the financial liability is either held for trading or it is designated as at FVTPL. The Group does
not have any designated FVTPL liabilities.
A financial liability is classified as held for trading if:
• it has been incurred principally for the purpose of disposal in the near future; or
• it is a part of an identified portfolio of financial instruments that the Group manages together and has a recent actual pattern of short-term
profit-taking; or
• it is a derivative that is not designated and effective as a hedging instrument.
Financial liabilities at FVTPL are stated at fair value, with any resultant gain or loss recognised in profit or loss.
Other financial liabilities
Other financial liabilities, including borrowings, are initially measured at fair value, net of transaction costs. Other financial liabilities are
subsequently measured at amortised cost using the effective interest method, with interest expense recognised on an effective yield basis.
The effective interest method is a method of calculating the amortised cost of a financial liability and of allocating interest expense over the relevant
period. The effective interest rate is the rate that exactly discounts estimated future cash payments through the expected life of the financial liability,
or, where appropriate, a shorter period, to the net carrying amount on initial recognition.
Derecognition of financial liabilities
The Group derecognises financial liabilities when, and only when, the Group’s obligations are discharged, cancelled or they expire.
Derivative financial instruments
The Group’s activities expose it to the financial risks of changes in foreign currency exchange rates and interest rates.
The Group uses foreign exchange forward contracts and interest rate swap contracts to manage these exposures. The Group does not hold or
issue derivative financial instruments for speculative purposes.
The use of financial derivatives is governed by the Group’s policies approved by the Board of Directors, on the use of financial derivatives.
Derivatives are initially recognised at fair value at the date a derivative contract is entered into and are subsequently remeasured to their fair value
at each period end date. The resulting gain or loss is recognised in profit or loss immediately.
A derivative is presented as a non-current asset or a non-current liability if the remaining maturity of the instrument is more than 12 months and it
is not expected to be realised or settled within 12 months. Other derivatives are presented as current assets or current liabilities.
Derivatives embedded in other financial instruments or other host contracts are treated as separate derivatives when their risks and characteristics
are not closely related to those of the host contracts and the host contracts are not measured at fair value with changes in fair value recognised
in profit or loss.
60
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Annual Report and Financial Statements 2013
2 Accounting policies (continued)
q) Financial instruments (continued)
An embedded derivative is presented as a non-current asset or a non-current liability if the remaining maturity of the hybrid instrument to which
the embedded derivative relates is more than 12 months and is not expected to be realised or settled within 12 months. Other derivatives are
presented as current assets or current liabilities.
r) share-based payments
The Group has applied the requirements of IFRS 2 Share-based Payments. In accordance with the transitional provisions, IFRS 2 has been applied
to all grants of equity instruments after 7 November 2002 that were unvested as of 1 October 2005.
The Group issues equity-settled share-based payments to certain employees. equity-settled share-based payments are measured at fair value
(excluding the effect of non market-based vesting conditions) at the date of grant. The fair value determined at the grant date of the share-based
payment is expensed on a straight-line basis over the vesting period, based on the Group’s estimate of shares that will eventually vest. Fair value
is measured by use of the Black-Scholes model.
The Group provides employees with the ability to purchase the Group’s ordinary shares at 80% of the current market value through the operation
of its share save scheme. The Group records an expense, based on its estimate of the 20% discount related to shares expected to vest on a
straight-line basis over the vesting period.
s) trade payables
Trade payables are initially measured at fair value and are subsequently measured at amortised cost, using the effective interest rate method.
t) operating profit
Operating profit is stated after charging restructuring costs but before property disposals, investment income, finance costs and fair value movement
in derivative contracts.
u) Provisions
Provisions are recognised when the Group has a present obligation (legal or constructive) as a result of a past event, and it is probable that the
Group will be required to settle that obligation and a reliable estimate can be made of the amount of that obligation. Provisions are measured at
the Directors’ best estimate of the expenditure required to settle the obligation at the balance sheet date, and are discounted to present value where
the effect is material.
v) critical accounting judgements and key sources of estimation uncertainty
In the application of the Group’s accounting policies, which are described above, the Directors are required to make judgements, estimates and
assumptions about the carrying amounts of assets and liabilities that are not readily apparent from other sources. The estimates and associated
assumptions are based on historical experience and other factors that are considered to be relevant. Actual results may differ from these estimates.
The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in
which the estimate is revised if the revision affects only that period, or in the period of the revision and future periods if the revision affects both
current and future periods.
The critical judgement, apart from those involving estimations (which are dealt with separately below), that the Directors have made in the
process of applying the Group’s accounting policies and that has the most significant effect on the amounts recognised in financial statements
is the detailed criteria for the recognition of revenue from the sale of goods set out in IAS 18 Revenue and, in particular, whether the Group has
transferred to the buyer the significant risks and rewards of ownership of the goods. The Group only recognises revenue where this is the case.
Key sources of estimation uncertainty
The key assumptions concerning the future, and other key sources of estimation uncertainty at the period end date, that have a significant risk
of causing a material adjustment to the carrying amounts of assets and liabilities within the next financial period, are discussed below:
Impairment of property, plant and equipment
During the period, the Group has closed 12 stores in the UK, including five before their lease end dates. As the fixtures and fittings within
these stores cannot be re-used in other locations within the Group, the carrying value of these assets has been fully provided for in the period.
Additional impairments have been made for stores which are identified for conversion during the next financial period and for loss-making stores.
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2 Accounting policies (continued)
v) critical accounting judgements and key sources of estimation uncertainty (continued)
Onerous lease provisions
During the period the Group has continued to review the performance of its store portfolio, which has resulted in two further stores being exited
before their lease terms had expired (2012: nil stores). In respect of the leases in relation to stores exited before lease end dates in prior periods
that are still vacant, the Group has provided for what it considers to be the unavoidable costs prior to lease termination or sublease. The Group
has further reviewed any trading loss-making stores and provided for those leases considered to be onerous. These estimates are based upon
available information and knowledge of the property market. The ultimate costs to be incurred in this regard may vary from the estimates.
Dilapidations provision
The Group has estimated its likely dilapidation charges for its store portfolio and provided accordingly. This estimate involves an assessment
of average costs per store and the expected exit period for the current portfolio, and is based on management’s best estimate, taking into
account knowledge of the property market and historical trends. The ultimate costs to be incurred may vary from the estimates.
3 Revenue
An analysis of Group revenue is as follows:
Revenue from the sale of goods
Investment revenue
Total revenue
52 weeks
ended
28 september
2013
£’000
52 weeks
ended
29 september
2012
£’000
177,849
170
178,019
177,693
152
177,845
Interest receivable represents gains on loans and receivables. There are no other gains recognised in respect of loans and receivables.
4 Profit before taxation
Profit before taxation for the period has been arrived at after charging/(crediting):
Depreciation of property, plant and equipment
Impairment of property, plant and equipment
Disposal of property, plant and equipment gain
Property related provisions
Staff costs (see note 5)
Operating lease rentals
Write down of inventories recognised as an expense
Cost of inventories recognised as expense
Net foreign exchange gain
52 weeks
ended
28 september
2013
£’000
52 weeks
ended
29 september
2012
£’000
4,258
553
(109)
927
43,123
20,629
2,807
68,019
(11)
3,988
525
(1,624)
208
42,801
19,295
2,594
68,550
(30)
62
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Annual Report and Financial Statements 2013
4 Profit before taxation (continued)
Analysis of auditor’s remuneration is provided below:
Fees payable to the Company’s auditor with respect to the Company’s annual accounts
Fees payable to the Company’s auditor and their associates for other audit services to the Group:
Audit of the Company’s subsidiaries pursuant to legislation
Total audit fees
Audit related assurance services
Taxation compliance services
Other services
Total non audit fees
52 weeks
ended
28 september
2013
£’000
52 weeks
ended
29 september
2012
£’000
50
110
160
5
73
8
86
246
40
108
148
–
70
–
70
218
A description of the work of the Audit Committee is set out on pages 39 to 40 and includes an explanation of how auditor objectivity and
independence is safeguarded when non-audit services are provided by the auditor.
5 Staff costs
The average monthly number of persons and their full-ime equivalents employed by the Group and Company in the UK during the accounting
period (including executive Directors) was:
Selling
Administration
Their aggregate remuneration comprised:
Wages and salaries (including LTIP, see note 28)
Social security costs
Other pension costs (see note 27b)
52 weeks
ended
28 september
2013
number
employed
52 weeks
ended
29 september
2012
number
employed
1,556
164
1,720
1,488
166
1,654
2013
£’000
2012
£’000
39,447
3,466
210
43,123
39,148
3,478
175
42,801
Details of Directors’ emoluments are disclosed on pages 43 to 44. employee profit sharing of £6.2 million (2012: £6 million) is included in the
above and comprises sales commission and bonuses.
6 Other gains
Other gains in 2013 relate to the sale of one freehold property (2012: three freehold properties).
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7 Investment revenue, finance costs and fair value loss on interest rate derivatives
Investment revenue
Bank interest receivable and similar income
Finance costs
Interest on bank loans and overdrafts
Interest on interest rate derivatives
Interest on underpaid tax*
Fair value loss on forward currency contracts
52 weeks
ended
28 september
2013
£’000
52 weeks
ended
29 september
2012
£’000
170
170
(2,200)
(506)
(1,000)
(27)
(3,733)
152
152
(3,119)
(821)
–
(168)
(4,108)
* the group has historically provided for tax on open HMrc enquiries, some of which have now been resolved. as a result, some historic tax payments have been
reallocated between periods which, whilst leading to a net reduction in the overall level of provision required, has required a reallocation of provision from corporation
tax payable to cover interest which may become due on underpaid tax in earlier periods. in the event that additional tax is ultimately due in those earlier periods,
it is estimated that £1 million of late payment interest would fall due.
Held for trading assets and liabilities
Interest rate swaps gain/(loss)
Forward currency contracts losses
52 weeks
ended
28 september
2013
£’000
52 weeks
ended
29 september
2012
£’000
210
(27)
183
(637)
(168)
(805)
No finance costs are appropriate to be capitalised in the period, or the prior period.
Interest on bank loans and overdrafts represents gains and losses on financial liabilities measured at amortised cost. There are no other gains
or losses recognised in respect of financial liabilities measured at amortised cost.
8 Taxation
continuing operations:
Current tax – charge for the period
Current tax – adjustment in respect of previous periods
Deferred tax – effect of reduction in UK corporation tax rate
Deferred tax – charge for period (note 19)
Deferred tax – adjustment in respect of previous periods (note 19)
52 weeks
ended
28 september
2013
£’000
52 weeks
ended
29 september
2012
£’000
1,799
(1,226)
–
875
9
1,457
2,573
(139)
48
661
(419)
2,724
Corporation tax in the UK is calculated at 23.5% (2012: 25%) of the estimated assessable profit for the period.
Finance Act 2013 included provision to reduce the rate of corporation tax to 21% with effect from 1 April 2014 and 20% from 1 April 2015.
64
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Annual Report and Financial Statements 2013
8 Taxation (continued)
The charge for the period can be reconciled to the profit per the statement of financial performance as follows:
continuing operations:
Profit before taxation
Tax at the UK corporation tax rate of 23.5% (2012: 25%)
Tax effect of expenses that are not deductible in determining taxable profit
Tax effect of chargeable gain lower than profit on sale of freehold property
Tax effect of tangible fixed assets which do not qualify for capital allowances
Tax effect of adjustment in respect of prior periods
Tax expense for the period
9 Dividends
Interim dividend for the period ended 28 September 2013 of £0.005 (2012: £0.005) per share
Proposed final dividend for the period ended 28 September 2013 of £0.01 (2012: £0.0075) per share
52 weeks
ended
28 september
2013
£’000
52 weeks
ended
29 september
2012
£’000
10,601
2,491
16
(56)
222
(1,216)
1,457
12,493
3,123
59
(159)
259
(558)
2,724
52 weeks
ended
28 september
2013
£’000
52 weeks
ended
29 september
2012
£’000
958
1,921
958
1,438
The proposed final dividend is subject to approval by shareholders at the Annual General Meeting and has not been included as a liability
in these financial statements.
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.
Weighted average number of shares
For basic earnings per share
Weighted average number of shares under option
For diluted earnings per share
2013
number of
shares
2012
number of
shares
192,012,412
1,351,853
193,364,265
190,006,223
1,749,687
191,755,910
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Annual Report and Financial Statements 2013
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10 Earnings per share (continued)
The calculation of the basic and diluted earnings per share used the denominators as shown above for both basic and diluted earnings per share.
The adjusted earnings figure is based on the following data (as detailed in the Financial Review section of this report):
from continuing operations
Profit after tax for the period
Post-tax effect of:
Impairment of property, plant and equipment
Property disposal gain
Interest rate derivative (gain)/charge
Fair value loss on foreign currency forward contracts
Restructuring costs
Interest on corporation tax
Property related provisions
Adjusted profit after tax for the period
11 Goodwill
52 weeks
ended
28 september
2013
£’000
52 weeks
ended
29 september
2012
£’000
9,144
9,769
553
(109)
(161)
21
177
115
709
10,449
525
(1,624)
478
126
288
–
155
9,717
£’000
245
Cost and carrying amount at 1 October 2011, 29 September 2012 and 28 September 2013
The balance of goodwill remaining is the carrying value that arose on the acquisition of Surface Coatings Ltd in 1998.
The Group tests goodwill annually for impairment, or more frequently if there are indications that goodwill might be impaired.
The recoverable amounts are determined from value in use calculations. The key assumptions for the value in use calculations are those regarding
the discount rates, growth rates and expected changes to, selling prices and direct costs during the period. Management estimates discount rates
based on the Group’s weighted average cost of capital. The growth rates are based on industry growth forecasts. Changes in selling prices and
direct costs are based on past practices and expectations of future changes in the market. Discounted cash flows are calculated using a post-tax
rate of 13.0% (2012: 10.9%).
The Group prepares cash flow forecasts derived from the most recent financial budgets approved by management for the next five years and
extrapolates cash flows for the following five years. The growth rate applied does not exceed the average long-term growth rate for the relevant
markets. There are no reasonable changes that would result in the carrying value of goodwill being reduced to its recoverable amount.
The accounting judgements and sources of estimation uncertainty involved in assessing any impairment loss are referred to in note 2 to the
financial statements.
As a result of the annual test of impairment of goodwill, no impairment has been identified for the current period.
66
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Annual Report and Financial Statements 2013
12 Property, plant and equipment
land and buildings
cost
At 1 October 2011
Additions
Disposals
At 29 September 2012
Additions
Disposals
At 28 september 2013
Accumulated depreciation and impairment
At 1 October 2011
Charge for the period
Provision for impairment
eliminated on disposals
At 29 September 2012
Charge for the period
Provision for impairment
eliminated on disposals
At 28 september 2013
carrying amount
At 28 september 2013
At 29 September 2012
freehold
£’000
19,705
528
(4,432)
15,801
70
(511)
15,360
1,915
290
65
(638)
1,632
227
–
(240)
1,619
short
leasehold
£’000
fixtures
and fittings
£’000
motor
vehicles
£’000
1,842
–
–
1,842
–
–
1,842
1,537
74
–
–
1,611
67
–
–
1,678
50,266
5,591
(2,823)
53,034
5,358
(2,042)
56,350
31,206
3,599
460
(2,806)
32,459
3,925
550
(1,925)
35,009
90
–
–
90
121
(45)
166
24
25
–
–
49
39
3
(27)
64
total
£’000
71,903
6,119
(7,255)
70,767
5,549
(2,598)
73,718
34,682
3,988
525
(3,444)
35,751
4,258
553
(2,192)
38,370
13,741
14,169
164
231
21,341
20,575
102
41
35,348
35,016
Freehold land and buildings include £4,104,000 of freehold land (2012: £4,104,000) on which no depreciation has been charged in the
current period. There is no material difference between the carrying and market values.
Cumulative finance costs capitalised in the cost of tangible fixed assets amount to £nil (2012: £nil).
Contractual commitments for the acquisition of property, plant and equipment are detailed in note 29.
During the period, the Group has closed 12 stores in the UK. As the fixtures and fittings within these stores cannot be re-used in other locations
within the Group, the carrying value of these assets has been fully provided for in the period, with the associated impairment charge included
within other operating expenses.
13 Subsidiaries
A list of the significant subsidiaries, including the name, country of incorporation and proportion of ownership interest is given in note 3 to the
Company’s separate financial statements.
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14 Trade and other receivables
Amounts falling due within one year:
Amounts receivable for the sale of goods
Allowance for doubtful debts
Other debtors and prepayments
– Rent and rates
– Other
2013
£’000
714
(59)
5,072
1,984
7,711
2012
£’000
750
(104)
5,090
1,349
7,085
The Directors consider that the carrying amount of trade and other receivables at 28 September 2013 and 29 September 2012 approximates to
their fair value on the basis of discounted cash flow analysis.
credit risk
The Group’s principal financial assets are bank balances and cash and trade receivables.
The Group considers that it has no significant concentration of credit risk. The majority of sales in the business are cash-based sales in the stores.
Total trade receivables (net of allowances) held by the Group at 28 September 2013 amounted to £0.7 million (2012: £0.6 million).
These amounts mainly relate to sundry trade accounts and Tesco Clubcard Scheme generated sales. In relation to these sales, the average credit
period taken is 62 days (2012: 58 days) and no interest is charged on the receivables. Trade receivables between 60 days and 120 days are
provided for based on estimated irrecoverable amounts from the sale of goods, determined by reference to past default experience.
Before accepting any new customer, the Group uses an external credit scoring system to assess the potential customer’s credit quality and defines
credit limits by customer. Limits and scoring attributed to customers are reviewed periodically. Of the trade receivables balance at the end of the
year, £161,000 (2012: £176,000) is due from Tesco Plc, the Group’s largest customer.
Included in the Group’s trade receivable balance are debtors with a carrying amount of £36,000 (2012: £211,000) which are past due
at the reporting date for which the Group has not provided as there has not been a significant change in credit quality and the amounts are
still considered recoverable. The Group does not hold any collateral over these balances. The average age of these receivables is 98 days
(2012: 197 days).
Ageing of past due but not impaired receivables
60 – 120 days
121 – 200 days
Greater than 200 days
2013
£’000
7
20
9
2012
£’000
80
55
76
The allowance for doubtful debts was £59,000 by the end of the period (2012: £104,000). Given the minimal receivable balance, the
directors believe that there is no further credit provision required in excess of the allowance for doubtful debts.
The allowance for doubtful debts includes £59,000 relating to individually impaired trade receivables (2012: £104,000) which are due from
companies that have been placed into liquidation.
The Directors consider that the carrying amount of trade and other receivables is approximately equal to their fair value.
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Annual Report and Financial Statements 2013
15 Cash and cash equivalents
Cash and cash equivalents comprise cash held by the Group and short-term bank deposits (with associated right of set off) net of bank overdrafts,
with an original maturity of three months or less. The carrying amount of these assets approximates their fair value. A breakdown of significant bank
and cash balances by currency is as follows:
Sterling
US dollar
euro
Total cash and cash equivalents
16 Other financial liabilities
Trade and other payables
Amounts falling due within one year
Trade payables
Other payables
Accruals and deferred income
2013
£’000
18,369
27
47
18,443
2012
£’000
14,023
254
165
14,442
2013
£’000
2012
£’000
18,244
5,506
12,179
35,929
12,916
3,331
9,852
26,099
Trade payables and accruals principally comprise amounts outstanding for trade purchases and on-going costs. The average credit period taken
for trade purchases is 59 days (2012: 43 days). No interest is charged on these payables.
The Directors consider that the carrying amount of trade payables at 28 September 2013 and 29 September 2012 approximates to their fair
value on the basis of discounted cash flow analysis.
17 Bank loans
Bank loans (all Sterling)
The borrowings are repayable as follows:
On demand or within one year
In the second year
In the third to fifth year
Less: total unamortised issue costs
Issue costs to be amortised within 12 months
Amount due for settlement after 12 months
2013
£’000
2012
£’000
54,555
59,289
–
–
55,000
55,000
(445)
54,555
265
54,820
–
–
60,000
60,000
(711)
59,289
266
59,555
The Directors consider that the carrying amount of the bank loan at 28 September 2013 and 29 September 2012 approximates to its fair value
since the amounts relate to floating rate debt.
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17 Bank loans (continued)
The average weighted interest rates paid on the loan were as follows:
Loans
2013
%
3.30
2012
%
4.54
The Group borrowings are arranged at floating rates, thus exposing the Group to cash flow interest rate risk.
During the period the Group cancelled £10 million of its committed revolving credit facility, leaving a remaining facility of £65 million, expiring
in May 2015. As at the financial period end £55 million of this facility was drawn, with a further £10 million of undrawn financing available.
The loan facility contains financial covenants which are tested on a bi-annual basis.
At 28 September 2013, the Group had available £10 million (2012: £15 million) of undrawn committed banking facilities.
18 Financial instruments
Financial liabilities held for trading were reclassified in the prior period in order to more appropriately reflect the requirements of IAS1.
Classification as non-current liabilities ensures the instrument mirrors the cash flows of the loan facility, which it has in place to hedge against.
capital risk management
The Group manages its capital to ensure that entities in the Group will be able to continue as a going concern while maximising the return to
stakeholders through the optimisation of the debt and equity balance. The Group’s overall strategy remains unchanged from 2012. The capital
structure of the Group consists of debt, which includes the borrowings disclosed in note 17, cash and cash equivalents disclosed in note 15 and
equity attributable to equity holders of the parent, comprising issued capital, reserves and retained earnings as disclosed in notes 20 to 26.
The Group is not subject to any externally imposed capital requirements.
significant accounting policies
Details of the significant accounting policies and methods adopted, including the criteria for recognition, the basis of measurement and the basis
on which income and expenses are recognised, in respect of each class of financial asset, financial liability and equity instrument are disclosed in
note 2q to the financial statements.
Categories of financial instruments
financial assets
Loans and receivables (including cash and cash equivalents)
financial liabilities
Held for trading
Fair value through profit and loss
Amortised cost
carrying value and fair value
2013
£’000
2012
£’000
19,098
15,088
–
129
72,935
6,107
102
72,369
The Group considers itself to be exposed to risks on financial instruments, including market risk (including currency risk), credit risk, liquidity risk and
cash flow interest rate risk.
The Group seeks to mitigate the effects of these risks by using derivative financial instruments to hedge these risk exposures economically. The use
of financial derivatives is governed by the Group’s policies approved by the Board of Directors, which provide written principles on foreign
exchange risk, interest rate risk, credit risk, the use of financial derivatives and non-derivative financial instruments, and the investment of excess
liquidity. The Group does not enter into or trade financial instruments, including derivative financial instruments, for speculative purposes.
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Annual Report and Financial Statements 2013
18 Financial instruments (continued)
Market risks
The Group’s activities expose it primarily to the financial risks of changes in foreign currency exchange rates and interest rates. The Group enters
into a variety of derivative financial instruments to manage its exposure to interest rate and foreign currency risk, including:
• forward foreign exchange contracts to hedge the exchange rate risk arising on the import of goods from South America and China; and
• interest rate swaps and collars to mitigate the risk of movements in interest rates.
Foreign currency risk management
The Group undertakes certain transactions denominated in foreign currencies. Hence, exposures to exchange rate fluctuations arise. exchange rate
exposures are managed within approved policy parameters utilising forward foreign exchange contracts.
The carrying amounts of the Group’s foreign currency denominated monetary assets and monetary liabilities at the reporting date are as follows:
euro
us dollar
Foreign currency sensitivity analysis
Assets
2013
£’000
47
135
2012
£’000
177
254
liabilities
2013
£’000
801
–
2012
£’000
1,253
434
The Group is mainly exposed to the currency of China and Brazil (US dollar currency) and to various european countries (euro) as a result of
inventory purchases. The following table details the Group’s sensitivity to a 10% increase and decrease in Sterling against the relevant foreign
currencies. 10% represents management’s assessment of the reasonably possible change in foreign exchange rates. The sensitivity analysis includes
only outstanding foreign currency denominated monetary items and adjusts their translation at the period end for a 10% change in foreign currency
rates. A positive number below indicates an increase in profit and other equity where Sterling strengthens 10% against the relevant currency.
Profit or Loss movement on a 10% strengthening in Sterling against the euro
Profit or Loss movement on a 10% strengthening in Sterling against the US dollar
Profit or Loss movement on a 10% weakening in Sterling against the euro
Profit or Loss movement on a 10% weakening in Sterling against the US dollar
currency derivatives
2013
£’000
68
(12)
(84)
15
2012
£’000
98
16
(120)
(20)
The Group utilises currency derivatives to hedge significant future transactions and cash flows. The Group uses foreign currency forward contracts
in the management of its exchange rate exposures. The contracts are denominated in US dollars and euros.
At the balance sheet date, the total notional amounts of outstanding forward foreign exchange contracts that the Group has committed to are
as below:
Forward foreign exchange contracts
2013
£’000
4,828
2012
£’000
5,132
These arrangements are designed to address significant exchange exposures for the first half of 2013 and are renewed on a revolving basis
as required.
At 28 September 2013 the fair value of the Group’s currency derivatives is a £129,000 liability within accruals and deferred income (note 16)
(2012: a liability of £102,000). These amounts are based on market value of equivalent instruments at the balance sheet date.
Losses of £27,000 are included in finance costs (note 7) (2012: £168,000 loss).
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18 Financial instruments (continued)
interest rate risk management
The Group is exposed to interest rate risk as entities in the Group borrow funds at floating interest rates. The risk is managed by the Group by
maintaining an appropriate mix between fixed and floating rate borrowings, by the use of interest rate swap contracts and collars. The Group’s
exposures to interest rates on financial assets and financial liabilities are detailed in the liquidity risk management section of this note.
interest rate sensitivity analysis
The sensitivity analyses below have been determined based on the exposure to interest rates for both derivatives and non-derivative instruments at
the balance sheet date. For floating rate liabilities, the analysis is prepared assuming the amount of liability outstanding at the balance sheet date
was outstanding for the whole year. A 50 basis points increase or decrease is used when reporting interest rate risk internally to key management
personnel and represents management’s assessment of the possible change in interest rates.
If interest rates had been 50 basis points higher/lower and all other variables were held constant, the Group’s profit would be impacted
as follows:
(loss) or profit
The Group’s sensitivity to interest rates mainly relates to the revolving credit facility.
interest rate derivatives
50 basis points increase
in interest rates
50 basis points decrease
in interest rates
2013
£’000
(187)
2012
£’000
723
2013
£’000
187
2012
£’000
(441)
The Group used interest rate derivatives to manage its exposure to interest rate movements on its bank borrowings.
The Group’s interest rate derivative comprised of a 10 year cancellable collar with a notional value of £30 million (2012: £30 million) with
a cap of 5.6% and a floor of 4.49%. The interest rate within this range is LIBOR less 0.4%. Where LIBOR falls below the floor the interest rate
resets to a fixed level of 5.55%.
The fair value liability of the swaps entered into at 28 September 2013 is estimated at £nil (2012: £6,107,000). An amount of £ 210,000
has been credited to the statement of financial performance in the period (2012: £637,000 charge) to reflect the fair value gain.
On 30 April 2013 the Group settled the 10 year cancellable collar, for a consideration of £5,897,000.
credit risk management
Credit risk refers to the risk that a counter party will default on its contractual obligations resulting in financial loss to the Group. Management has
considered the counterparty risk associated with the cash and derivative balances and do not consider there to be a material risk. The Group has
a policy of only dealing with creditworthy counterparties. The Group’s exposure to its counterparties is reviewed periodically. Trade receivables are
minimal consisting of a number of insurance companies and sundry trade accounts, further information is provided in note 14.
The carrying amount of financial assets recorded in the financial statements, which is net of impairment losses, represents the Group’s maximum
exposure to credit risk without taking account of the value of any collateral obtained.
liquidity risk management
Ultimate responsibility for liquidity risk management rests with the Board of Directors. The Group manages liquidity risk by maintaining adequate
reserves, banking facilities and reserve borrowing facilities by continuously monitoring forecast and actual cash flows and matching the maturity
profiles of financial assets and liabilities. Included in note 17 is a description of additional undrawn facilities that the Group has at its disposal to
reduce liquidity risk further.
liquidity and interest risk tables
The following tables detail the Group’s remaining contractual maturity for its non-derivative financial liabilities. The tables have been drawn up
based on the undiscounted cash flows (and on the assumption that the variable interest rate remains constant at the latest fixing level of 3.01688%
(2012: 3.54658%) of financial liabilities based on the earliest date on which the Group can be required to pay. The table includes both interest
and principal cash flows.
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Annual Report and Financial Statements 2013
18 Financial instruments (continued)
2013
Non-interest bearing
Variable interest rate instruments
2012
Non-interest bearing
Variable interest rate instruments
less than
1 month
£’000
35,929
5,131
less than
1 month
£’000
26,099
197
1–3 months
£’000
–
289
1–3 months
£’000
–
379
3 months
to 1 year
£’000
–
1,254
3 months
to 1 year
£’000
–
1,742
1–5 years
£’000
–
51,130
total
£’000
35,929
57,804
1–5 years
£’000
–
63,888
total
£’000
26,099
66,206
The Group is financed through a £65 million (2012 £75 million), revolving credit facility of which £55 million (2012 £65 million) was utilised.
In the current period the total unused amount of financing facilities was £10 million (2012 £15 million) at the balance sheet date. The Group
expects to meet its other obligations from operating cash flows and proceeds of maturing financial assets.
The following table details the Group’s liquidity analysis for its derivative financial instruments. The table has been drawn up based on the
undiscounted net cash inflows/(outflows) on the derivative instruments that settle on a net basis and the undiscounted gross inflows and (outflows)
on those derivatives that require gross settlement. When the amount payable or receivable is not fixed, the amount disclosed has been determined
by reference to the projected interest and foreign currency rates as illustrated by the yield curves existing at the reporting date.
2013
Foreign exchange forward
contracts payments
Foreign exchange forward
contracts receipts
2012
Interest rate swaps payments
Foreign exchange forward
contracts payments
Foreign exchange forward
contracts receipts
less than
1 month
£’000
1–3 months
£’000
3 months
to 1 year
£’000
1–5 years
£’000
5+ years
£’000
total
£’000
–
–
less than
1 month
£’000
–
–
–
(1,956)
(2,872)
1,878
2,819
–
–
–
–
(4,828)
4,697
1–3 months
£’000
(364)
3 months
to 1 year
£’000
(1,103)
1–5 years
£’000
(3,883)
(3,296)
(1,836)
3,199
1,839
–
–
5+ years
£’000
–
–
–
total
£’000
(5,350)
(5,132)
5,038
Fair value of financial instruments
The fair values of financial assets and financial liabilities are determined as follows:
• Foreign currency forward contracts are measured using quoted forward exchange rates and yield curves derived from quoted interest rates
matching maturities of the contracts.
• Interest rate swaps are measured at the present value of future cash flows estimated and discounted based on the applicable yield curves
derived from quoted interest rates.
• Interest rate collars are measured using applicable yield curves derived from quoted interest rates and market volatilities.
The fair values are therefore categorised as Level 2, based on the degree to which the fair value is observable. Level 2 fair value measurements
are those derived from inputs other than unadjusted quoted prices in active markets (Level 1 categorisation) that are observable for the asset or
liability, either directly (i.e. as prices) or indirectly (i.e. derived from prices).
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19 Provisions
Onerous lease provision
Dilapidations provision
Current
Non-current
At 29 September 2012
Additional provision in the period
Utilisation of provision
Release of provision in the period
At 28 september 2013
2013
£’000
1,973
1,245
3,218
1,014
2,204
3,218
onerous lease
dilapidations
provision
provision
£’000
1,080
1,400
(150)
(357)
1,973
£’000
1,542
81
(181)
(197)
1,245
2012
£’000
1,080
1,542
2,622
820
1,802
2,622
total
£’000
2,622
1,481
(331)
(554)
3,218
The onerous lease provision relates to estimated future unavoidable lease costs in respect of closed, non-trading and loss-making stores.
The provision is expected to be utilised over the following four financial periods. The dilapidations provision represents management’s best estimate
of the Group’s liability under its property lease arrangements based on past experience and is expected to be utilised over the following seven
financial periods.
The following are the deferred tax liabilities/(assets) recognised by the Group and movements thereon during the current and prior
reporting period.
Accelerated
tax
depreciation
£’000
other
short-term
timing
differences
£’000
share-based
payments
£’000
exchange rate
differences
£’000
interest rate
hedging
£’000
rent free
£’000
1,847
(9)
28
(147)
–
1,719
(155)
9
–
(42)
(14)
–
2
–
(54)
31
–
–
(308)
(23)
–
25
166
(140)
(19)
–
(319)
17
(39)
–
(1)
–
(23)
(5)
–
–
(2,074)
845
–
166
–
(1,063)
1,061
–
–
(35)
(99)
(447)
3
–
(578)
(38)
–
–
total
£’000
(595)
661
(419)
48
166
(139)
875
9
(319)
1,573
(23)
(478)
(28)
(2)
(616)
426
As at 1 October 2011
(Credit)/charge to income
Charge/(credit) in respect of
previous periods
Impact of rate change
Charge to equity
As at 29 September 2012
(Credit)/charge to income
Charge in respect of previous
periods
Credit to equity
As at 28 september
2013
Finance Act 2013 included provision to reduce the rate of corporation tax to 21% with effect from 1 April 2014 and 20% from 1 April 2015.
If the deferred tax assets and liabilities of the Group were all to reverse after 1 April 2015, the effect of the reduction to 20% would be to reduce
the net deferred tax liability by £56,000.
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Annual Report and Financial Statements 2013
20 Called-up share capital
Authorised 240,000,000 (2012: 240,000,000) ordinary shares of 3.33p each (2012: 3.33p)
Authorised 37,000,000 (2012: 37,000,000) redeemable B shares of £0.54 each
Authorised 124,890,948 (2012: 124,890,948) irredeemable C shares of £0.001 each
Issued and fully-paid 192,127,669* (2012: 191,852,710) ordinary shares of 3.33p
each (2012: 3.33p)
Total
2013
£’000
8,000
19,980
125
28,105
6,404
6,404
2012
£’000
8,000
19,980
125
28,105
6,395
6,395
During the period the Group issued 274,959 (2012: 3,486,908) ordinary shares with a nominal value of £9,156 (2012: £116,229) under
share option schemes for an aggregate cash consideration of £20,307 (2012: £575,340).
* during the period 191,000 (£6,000) shares were purchased by topps tiles employee benefit trust on behalf of the directors and senior Management team. these have
not been paid for at the balance sheet date.
21 Share premium
At start of period
Premium on issue of new shares
At end of period
22 Own shares
At start of period
Issued in the period
At end of period
2013
£’000
1,481
11
1,492
2013
£’000
(4)
(6)
(10)
2012
£’000
1,022
459
1,481
2012
£’000
(4)
–
(4)
A subsidiary of the Group holds 313,000 (2012: 122,000) shares with a nominal value of £10,000 (2012: £4,000) and therefore these
have been classed as own shares.
23 Merger reserve
At start and end of period
24 Share-based payment reserve
At start of period
Credit to equity for equity-settled share-based payments
At end of period
2013
£’000
(399)
2012
£’000
(399)
2013
£’000
566
83
649
2012
£’000
543
23
566
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25 Capital redemption reserve
At start and end of period
2013
£’000
2012
£’000
20,359
20,359
The capital redemption reserve arose on the cancellation of treasury shares and as a result of a share reorganisation in 2006.
26 Retained earnings
At 1 October 2011
Dividends (note 9)
Deferred tax on sharesave scheme taken directly to equity
Net profit for the period
At 29 September 2012
Dividends (note 9)
Deferred tax on share save scheme taken directly to equity
Net profit for the period
At 28 september 2013
27 Financial commitments
a) capital commitments
£’000
(53,262)
(2,087)
(166)
9,769
(45,746)
(2,396)
319
9,144
(38,679)
At the end of the period there were capital commitments contracted of £200,000 (2012: £300,000).
b) Pension arrangements
The Group operates a defined contribution pension scheme for employees. 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
£210,000 (2012: £175,000). At the period end there are were no outstanding contributions (2012: same).
c) lease commitments
Minimum future sublease payments expected to be received under non-cancellable subleases amount to £2,238,000.
The Group has entered into non cancellable operating leases in respect of motor vehicles, equipment and land and buildings.
Minimum lease payments under operating leases recognised as an expense for the period were £20,629,000 which includes property service
charges of £707,000 (2012: £19,295,000 including property service charges of £591,000).
At the balance sheet date, the Group had outstanding commitments for future minimum lease payments under non-cancellable operating leases
which fall due as follows:
– within 1 year
– within 2 – 5 years
– after 5 years
2013
2012
land and
buildings
£’000
20,270
67,540
65,884
153,694
other
£’000
1,321
953
–
2,274
land and
buildings
£’000
19,335
63,334
65,646
148,315
Other
£’000
1,025
1,160
25
2,210
Operating lease payments primarily represent rentals payable by the Group for certain of its office and store properties. Leases are negotiated for
an average term of 15 years and rentals are fixed for an average of five years (2012: five years).
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Annual Report and Financial Statements 2013
28 Share-based payments
The Group operates three share option schemes in relation to Group employees.
equity-settled share option scheme
Options are exercisable at the middle market closing price for the working day prior to the date of grant and are exercisable three years from the
date of grant if the employee is still employed by the Group at that date.
Details of the share options outstanding during the period are as follows:
date of grant
26 January 2001
12 February 2002
Movements in share options are summarised as follows:
Outstanding at beginning of period
exercised during the period
expired during the period
Outstanding at end of period
exercisable at end of period
other share-based payment plans
option
price
exercisable
period
54p
54p
7 years
7 years
no. of options outstanding
2013
2012
–
–
–
–
–
–
2013
number
of share
options
–
–
–
–
–
2013
Weighted
average
exercise price
£
–
–
–
–
–
2012
number
of share
options
40,779
–
(40,779)
–
–
2012
weighted
average
exercise price
£
0.54
–
(0.54)
–
–
employee share purchase plans are open to almost all employees and provide for a purchase price equal to the daily average market price on the
date of grant, less 20%. The shares can be purchased during a two week period each financial period. The shares so purchased are generally
placed in the employee share savings plan for a three or five year period.
Movements in share-based payment plan options are summarised as follows:
Outstanding at beginning of period
Issued during the period
expired during the period
exercised during the period
Outstanding at end of period
exercisable at end of period
2013
number
of share
options
1,972,894
2,029,575
(553,079)
(96,966)
3,352,424
3,352,424
2013
Weighted
average
exercise price
£
0.32
0.43
0.46
0.17
0.37
0.37
2012
number
of share
options
6,229,563
–
(769,761)
(3,486,908)
1,972,894
1,972,894
2012
weighted
average
exercise price
£
0.25
–
0.48
0.17
0.32
0.32
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28 Share-based payments (continued)
The inputs to the Black-Scholes Model for the above three and five year plans are as follows:
Weighted average share price
Weighted average exercise price
expected volatility (3 and 5 years)
expected life
Risk-free rate of interest
Dividend yield
– pence
– pence
– %
– years
– %
– %
2013
2012
45.9
36.7
48.1 and 63.6
3 or 5
0.34
3.18
39.8
31.8
47.3 and 70.6
3 or 5
0.2
4.09
expected volatility was determined by calculating the historical volatility of the Group’s share price over the previous three or five years
(2012: three or five years). The expected risk used in the model has been adjusted, based on management’s best estimate, for the effects
of non-transferability, exercise restrictions and behavioural forces.
Deferred bonus long-term incentive plan
During the financial period ended 29 September 2012 an award was made under the deferred bonus long-term incentive plan (“LTIP”) for the
Senior Management Team. Under this bonus scheme 25% of the award (net of tax) is deferred in the form of shares for a two year period, with
a matching share award (on a gross basis) that vests at the end of two years subject to the achievement of performance conditions relating to
continuing employment within the business and eBITDA earnings growth measured over the two year period.
This scheme was replaced in January 2013 when a new long-term incentive plan was approved by shareholders and as such there will be no
further awards under this scheme.
The total number of shares awarded was 191,084, and the fair value of these deferred shares as at 28 September 2013 was £81,000
(2012: £95,000).
The total number of matching shares that are expected to be awarded, subject to fulfilment of the performance conditions is 363,614 and the fair
value of these matching shares as at 28 September 2013 was £163,000 (2012: £nil). No options were granted or exercised during the period
(2012: none). There were no options outstanding at 28 September 2013.
The inputs to the Black-Scholes Model are as follows:
Weighted average share price
Weighted average exercise price
expected volatility
expected life
Risk-free rate of interest
– pence
– pence
– %
– years
– %
2013
50.5
–
43.8
2
0.3
2012
49.7
–
53.4
2
0.2
expected volatility was determined by calculating the historical volatility of the Group’s share price over the 2011/12 and 2012/13 financial
periods (2012: 2010/11 and 2011/12 financial periods). The expected risk used in the model has been adjusted, based on management’s
best estimate, for the effects of non-transferability, exercise restrictions and behavioural forces.
78
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Annual Report and Financial Statements 2013
28 Share-based payments (continued)
Management options
During the period members of the Management team were granted share options that are due to vest in October 2015, subject to the fulfilment
of criteria. The number of shares that are expected to be awarded is 290,000 and the fair value of these shares as at 28 September 2013 was
£138,000.
The inputs to the Black-Scholes Model are as follows:
Weighted average share price
Weighted average exercise price
expected volatility
expected life
Risk-free rate of interest
– pence
– pence
– %
– years
– %
2013
55.0
–
48.1
3
0.54
2012
–
–
–
–
–
expected volatility was determined by calculating the historical volatility of the Group’s share price over the 2010/11, 2011/12 and 2012/13
financial periods. The expected risk used in the model has been adjusted, based on management’s best estimate, for the effects of
non-transferability, exercise restrictions and behavioural forces.
In total, the Group recognised a total expense of £83,000 (2012: £23,000 expense) relating to share-based payments.
29 Related party transactions
S.K.M. Williams had the non-statutory role of President (resigned March 2012), advising on property matters and is a related party by virtue
of his 10.7% shareholding (20,593,950 ordinary shares) in the Group’s issued share capital (2012: 10.7% shareholding of 20,593,950
ordinary shares).
At 28 September 2013 S.K.M. Williams was the landlord of four properties leased to Multi Tile Limited, a trading subsidiary of Topps Tiles Plc,
for £208,000 (2012: four properties for £178,000) per annum.
No amounts were outstanding with S.K.M. Williams at 28 September 2013 (2012: £nil).The lease agreements on all properties are operated
on commercial arm’s length terms. His salary for the period in his role as President was £nil (2012: £24,000).
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.
The remuneration of the Board of Directors, who are considered key management personnel of the Group was £1.1 million (2012: £1.5 million)
as well as share-based payments of £44,000 (2012: £65,000). Further information about the remuneration of the individual Directors is
provided in the Remuneration Report on pages 41 to 45.
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Annual Report and Financial Statements 2013
79
84 – 96Additional Information01 – 31Strategic Report32 – 45Governance46 – 83Financial Statements financial stateMents
| cOMpany balance sHeet
As at 28 September 2013
fixed assets
Investments
current assets
Debtors due within one year
Debtors due after one year
Cash at bank and in hand
creditors: Amounts falling due within one year
net current assets
net assets
capital and reserves
Called-up share capital
Share premium
Share-based payment reserve
Capital redemption reserve
Other reserve
Profit and loss account
equity shareholders’ funds
52 weeks
ended
2013
£’000
52 weeks
ended
2012
£’000
notes
3
4
4
5
6,7
7
7
7
7
7
2,959
2,920
3,156
123,200
14,784
141,140
(1,387)
139,753
142,712
6,404
1,492
649
20,359
6,200
107,608
142,712
35
221,200
20,270
241,505
(1,139)
240,366
243,286
6,395
1,481
532
20,359
6,200
208,319
243,286
The financial statements of Topps Tiles Plc, Companies House number 3213782, were approved by the Board of Directors on and signed on its
behalf by:
matt Williams,
Director
rob parker,
Director
80
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Annual Report and Financial Statements 2013
financial stateMents
| nOtes tO tHe cOMpany financial stateMents
For the 52 weeks ended 28 September 2013
1 Basis of accounting
The separate financial statements of the Company are presented as required by the Companies Act 2006. They have been prepared under
the historical cost convention and in accordance with United Kingdom Accounting Standards and law.
Based on a detailed review of the risks and uncertainties discussed within the Strategic and Operational Review, and management’s current
expectations the Board believes that the Company will continue to meet all of its financial commitments as they fall due and will be able to
continue as a going concern.
The current economic climate creates a degree of uncertainty in the outlook which when combined with the financial covenants included in our
loan facilities, has led the Board to conduct a detailed review of a number of different trading scenarios, including reasonably possible downsides,
as well as possible mitigating actions, should they be required.
Based on this analysis the Board has concluded that the Company would be able to fully meet all of its financial commitments for the foreseeable
future and therefore consider it appropriate to prepare the financial statements on the going concern basis.
There have been no changes to the principal accounting policies in the period, all of which have been applied consistently throughout the period
and the preceding period.
The Company issues equity-settled share-based payments to certain employees. equity-settled share-based payments are measured at fair value
at the date of grant. The charge added to the cost of investment in those subsidiaries whose employees receive the benefit of the share options
is £39,000 (2012: £8,000 credit). In respect of the deferred long-term bonus incentive plan, the share-based payment charge within the
Company is £nil (2012: £57,000).
Fixed asset investments are shown at cost less provision for impairment.
The Company has taken advantage of the exemption in FRS 8 from disclosing transactions with other members of the Group and the exemption
in FRS 29 for making disclosures relating to financial instruments.
2 Profit for the period
As permitted by section 408 of the Companies Act 2006 the Company has elected not to present its own profit and loss account for the
period. Topps Tiles Plc reported a retained loss for the financial period ended 28 September 2013 of £100,711,000 (2012: £5,047,000).
Following a review of the projected cash flows relating to this company and its subsidiaries an impairment of £98,000,000 has been recognised
against the intercompany receivable.
The auditor’s remuneration for services to the Company was £50,000 for audit related work (2012: £40,000 for audit related work).
Fees relating to non-audit work totalled £nil (2012: £nil), see note 4 to the Group financial statements for further details.
The Company had no other employees other than the Directors (2012: same), whose remuneration is detailed on pages 43 to 44.
3 Fixed asset investments
At 29 September 2012
Movement in share options granted to employees
At 28 september 2013
shares
£’000
2,920
39
2,959
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Annual Report and Financial Statements 2013
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84 – 96Additional Information01 – 31Strategic Report32 – 45Governance46 – 83Financial Statements financial stateMents
| nOtes tO tHe cOMpany financial stateMents (CONTINUeD)
3 Fixed asset investments (continued)
The Company has investments in the following subsidiaries which principally affected the profits or net assets of the Group. To avoid a statement of
excessive length, details of investments which are not significant have been omitted.
Subsidiary undertaking
Topalpha Limited*
Multi Tile Limited
Topps Tiles Holdings
Topps Tiles (UK) Limited
Topps Tiles Distribution Ltd
*Held directly by topps tiles plc
% of issued shares held
100%
100%
100%
100%
100%
Principal activity
Property management and investment
Retail and wholesale of ceramic tiles, wood flooring and related products
Intermediate holding company
Retail and wholesale of ceramic tiles, wood flooring and related products
Wholesale and distribution of ceramic tiles, wood flooring and related products
The investments are represented by ordinary shares.
All undertakings are incorporated in Great Britain and are registered and operate in england and Wales.
4 Debtors
Amounts falling due within one year:
Amounts owed by subsidiary undertakings
Other debtors
Prepayments and accrued income
Amounts falling due after one year:
Amounts owed by subsidiary undertaking
2013
£’000
2012
£’000
2,977
166
13
3,156
–
22
13
35
123,200
221,200
Following a review of the projected cash flows relating to this Company and its subsidiaries an impairment of £98,000,000 has been
recognised against the intercompany receivable.
In respect of the deferred bonus share award, a deferred tax asset has not been recognised as it is probable that there will be insufficient suitable
profits arising when the shares are awarded against which to relieve the deduction.
5 Creditors: amounts falling due within one year
Trade and other creditors
Amounts owed to subsidiary undertakings
Accruals and deferred income
2013
£’000
17
251
1,119
1,387
2012
£’000
16
130
993
1,139
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Annual Report and Financial Statements 2013
6 Called-up share capital
Authorised 240,000,000 (2012: 240,000,000) ordinary shares of 3.33p each (2012: 3.33p)
Authorised 37,000,000 (2012: 37,000,000) redeemable B shares of £0.54 each
Authorised 124,890,948 (2012: 124,890,948) irredeemable C shares of £0.001 each
Issued and fully-paid 192,127,669* (2012: 191,852,710) ordinary shares
of 3.33p each (2012: 3.33p)
2013
£’000
8,000
19,980
125
28,105
2012
£’000
8,000
19,980
125
28,105
6,404
6,395
* during the period 191,000 (£6,000) shares were purchased by topps tiles employee benefit trust on behalf of the directors and senior Management team. these have
not been paid for at the balance sheet date.
During the period the Group allotted 274,959 (2012: 3,486,908) ordinary shares with a nominal value of £9,156 (2012: £116,229) under
share option schemes for an aggregate cash consideration of £20,307 (2012: £575,340).
7 Reserves
company
At 29 September 2012
Loss for the period
Dividend paid to equity
shareholders
Issue of new shares
Credit to equity for equity-
settled share-based payments
At 28 september 2013
share
capital
£’000
6,395
–
–
9
share
premium
£’000
1,481
–
–
11
–
6,404
–
1,492
share-based
payment
reserve
£’000
capital
redemption
reserve
£’000
other
reserves
£’000
6,200
–
profit
and loss
account
£’000
208,319
(98,315)
total
£’000
243,286
(98,315)
–
–
(2,396)
–
(2,396)
20
20,359
–
–
–
–
20,359
–
6,200
–
107,608
117
142,712
532
–
–
–
117
649
At 28 September 2013, the Directors consider the other reserve of £6,200,000 to remain non-distributable.
The Directors consider £105,106,000 (2012: £203,106,000) of profit and loss account reserves not to be distributable at 28 September
2013. This arose on an unrealised gain on the intragroup disposal of subsidiary companies. An impairment has been recognised against the
related intercompany balance this period.
Plc
Annual Report and Financial Statements 2013
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84 – 96Additional Information01 – 31Strategic Report32 – 45Governance46 – 83Financial Statements additiOnal infOrMatiOn
| fiVe year recOrd
UNAUDITeD
Group revenue
Group operating profit
Profit before taxation
Shareholders’ deficit
Basic earnings per share
Dividend per share
Dividend cover
Average number of employees
Share price (period end)
52 weeks
ended
26 september
2009
£’000
186,061
16,425
4,904
(53,282)
1.00p
–
–
1,625
94.41p
53 weeks
ended
2 October
2010
£’000
183,420
20,899
13,397
(28,530)
5.37p
–
–
1,615
60.0p
52 weeks
ended
1 October
2011
£’000
175,525
13,980
7,908
(25,462)
3.04p
1.50p
1.92
1,661
34.0p
52 weeks
ended
29 september
2012
£’000
52 weeks
ended
28 september
2013
£’000
177,693
15,462
12,493
(17,348)
5.14p
1.10p
4.68
1,654
46.0p
177,849
13,845
10,601
(10,184)
4.76p
1.25p
3.17
1,720
93.0p
All figures quoted are inclusive of continued and discontinued operations.
84
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Annual Report and Financial Statements 2013
| nOtice Of annual general Meeting
NOTICe IS HeReBY GIVeN that the Annual General Meeting of Topps Tiles Plc (the “Company”) will be held at Topps Tiles Plc, Thorpe Way,
Grove Park, enderby, Leicestershire Le19 1SU on 24 January 2014 at 10.00 am for the purpose of considering the following resolutions:-
resolutions 1 to 11, (inclusive) as ordinary resolutions and resolutions 12 to 14 (inclusive) as special resolutions.
Ordinary business
1. To receive and adopt the Company’s Annual Report and Financial Statements for the financial period ended 28th September 2013 together
with the last Directors’ Report, the last Directors’ Remuneration Report and the Auditor’s Report on those accounts and the auditable part of the
Directors’ Remuneration Report.
2. To declare a final dividend of 1p per Ordinary Share on the Ordinary Shares for the period.
3. To re-elect Matthew Williams as a Director of the Company.
4. To re-elect Robert Parker as a Director of the Company.
5. To re-elect The Rt. Hon. Michael Jack as a Director of the Company.
6. To re-elect Alan White as a Director of the Company.
7. To re-elect Claire Tiney as a Director of the Company.
8. To re-elect Andy King as a Director of the Company.
9. To re-appoint Deloitte LLP as auditors to hold office from the conclusion of the meeting to the conclusion of the next meeting at which the
Annual Report and Financial Statements are laid before the Company at a remuneration to be determined by the Directors.
10. To approve the Directors’ Remuneration Report for the financial period ended 28th September 2013 as set out in the Annual Report and
Financial Statements for that period.
Special business
To consider and, if thought fit, to pass the resolutions set out below which, in the case of Resolution 11 will be proposed as Ordinary Resolution
and, in the case of Resolutions 12 to 14 (inclusive) will be proposed as Special Resolutions.
11. THAT, in accordance with section 551 of the Companies Act 2006 (“2006 Act”), the Directors be generally and unconditionally authorised
to allot Relevant Securities (as defined in the Notes to this Resolution):
(a)
i.
ii.
comprising equity securities (as defined by section 560 of the CA 2006) up to an aggregate nominal amount of £4,264,807 (such
amount to be reduced by the nominal amount of any Relevant Securities allotted pursuant the authority in paragraph 11(b) below) in
connection with an offer by way of a rights issue:
to holders of Ordinary Shares in proportion (as nearly as may be practicable) to their respective holdings; and
to holders of other equity securities as required by the rights of those securities or as the Directors otherwise consider necessary,
but subject to such exclusions or other arrangements as the Directors may deem necessary or expedient in relation to treasury shares,
fractional entitlements, record dates, legal or practical problems in or under the laws of any territory or the requirements of any regulatory
body or stock exchange; and
(b)
In any other case, up to an aggregate nominal amount of £2,132,403 (such amount to be reduced by the nominal amount of any
equity securities allotted pursuant to the authority in paragraph 11(a) above in excess of £2,132,403),
provided that this authority shall, unless renewed, varied or revoked by the Company, expire 15 months from the passing of this resolution
or, if earlier, the date of the next Annual General Meeting of the Company save that the Company may, before such expiry, make offers
or agreements which would or might require Relevant Securities to be allotted and the Directors may allot Relevant Securities in pursuance
of such offer or agreement notwithstanding that the authority conferred by this resolution has expired.
This resolution revokes and replaces all unexercised authorities previously granted to the Directors to allot Relevant Securities but without
prejudice to any allotment of shares or grant of rights already made, offered or agreed to be made pursuant to such authorities.
Plc
Annual Report and Financial Statements 2013
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| nOtice Of annual general Meeting (CONTINUeD)
12. THAT, subject to the passing of Resolution 11 above, the Directors of the Company be given the general power to allot equity securities
(as defined by section 560 of the 2006 Act) for cash, either pursuant to the authority conferred by Resolution 11 or by way of a sale of
treasury shares, as if section 561(1) of the 2006 Act did not apply to any such allotment, provided that this power shall be limited to:
(a)
the allotment of equity securities pursuant to a rights issue or similar offer to Ordinary Shareholders where the equity securities respectively
attributable to the interests of all Ordinary Shareholders are proportionate or as nearly as practical (and taking into account any
prohibitions against or difficulties concerning the making of an offer of allotment to shareholders whose registered address or place
of residence is overseas and subject to such exclusions as the Directors of the Company may deem necessary or expedient to deal
with fractional entitlement or record dates) to the respective numbers of Ordinary Shares held by them; and
(b)
the allotment (otherwise than pursuant to paragraph (a) above) of equity securities up to an aggregate nominal amount of the greater
of £320,180 or 5% of the issued share capital of the Company.
The power granted by this resolution will expire 15 months from the passing of this resolution or, if earlier, the conclusion of the Company’s
next Annual General Meeting (unless renewed, varied or revoked by the Company prior to or on such date) save that the Company may,
before such expiry make offers or agreements which would or might require equity securities to be allotted after such expiry and the Directors
may allot equity securities in pursuance of any such offer or agreement notwithstanding that the power conferred by this resolution has expired.
13. THAT, the Company be generally and unconditionally authorised for the purposes of section 701 of the 2006 Act to make market purchases
(within the meaning of section 693(4) of the 2006 Act) of Ordinary Shares of 31⁄3p each in the capital of the Company (“Ordinary Shares”)
provided that:
(a)
the maximum number of Ordinary Shares hereby authorised to be purchased is 28,627,022 (representing 14.9% of the Company’s
issued Ordinary Share capital);
(b)
the minimum price, exclusive of any expenses, which may be paid for an Ordinary Share is 31⁄3p;
(c)
(d)
(e)
the maximum price, exclusive of any expenses, which may be paid for an Ordinary Share is an amount equal to 105% of the average
of the middle market quotations for an Ordinary Share derived from the London Stock exchange Daily Official List for the five business
days immediately preceding the date on which such Ordinary Share is Contracted to be purchased;
unless previously renewed, varied or revoked, the authority conferred shall expire at the close of the next Annual General Meeting
of the Company or 12 months from the date of this resolution, if earlier; and
the Company may make a contract for the purchase of Ordinary Shares under this authority before the expiry of this authority which
would or might require to be executed wholly or partly after the expiry of such authority, and may make purchases of Ordinary Shares
in pursuance of such a contract as if such authority had not expired.
14. THAT, a general meeting other than an annual general meeting may be called on not less than 14 clear days’ notice.
Notes
1. The right to vote at the meeting is determined by reference to the register of members. Only those members registered in the register
of members of the Company as at 6.00pm on 22 January 2014 or, in the event that the meeting is adjourned, close of business on such
date being not more than 2 days prior to the date fixed for the adjourned meeting. Changes to entries in the register of members after
6.00pm on 22 January 2014 or, in the event that the meeting is adjourned, after 2 working days before the time of any adjourned meeting,
shall be disregarded in determining the rights of any person to attend or vote at the meeting.
2. A member is entitled to appoint one or more persons as proxies to exercise all or any of his rights to attend, speak and vote at the meeting.
A proxy need not be a member of the Company. A form of proxy is enclosed and notes for completion can be found on the form and should
be read carefully before it is completed. To be valid, the form of proxy must be completed, signed and sent to the offices of the Company’s
registrars, Capita Asset Services, PXS, The Registry, 34 Beckenham Road, Beckenham, Kent BR3 4TU together with the power of attorney
or other authority (if any) under which it is signed or a notarially certified or office copy of the same, so as to arrive no later than 10.00am on
22nd January 2014 (or, in the event that the meeting is adjourned, no later than 2 working days before the time of any adjourned meeting).
3. A member may appoint more than one proxy in relation to the meeting provided that each proxy is appointed to exercise the rights attached
to a different share or shares held by him. To appoint more than one proxy, you will need to complete a separate proxy form in relation
to each appointment. You may photocopy the enclosed proxy form, indicating clearly on each proxy form the name of the proxy you wish
to appoint and the number of shares in relation to which the proxy is appointed. All forms must be signed and should be returned together
in the same envelope. You can only appoint a proxy using the procedures set out in these notes and the notes to the proxy form. The right
of a member under section 324 of the Companies Act 2006 (“2006 Act”) to appoint a proxy does not apply to a person nominated
to enjoy information rights under section 146 of the 2006 Act.
4. The appointment of a proxy will not preclude a member from attending and voting in person at the meeting if he or she so wishes.
5. As at the close of business on the date of this notice, the Company’s issued share capital comprised 192,174,429 Ordinary Shares of
31⁄3p each. each Ordinary Share carries the right to one vote at a general meeting of the Company.
86
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Annual Report and Financial Statements 2013
AdditionAl informAtion
6. A vote withheld is not a vote in law, which means that the vote will not be counted in the calculation of votes for or against the resolution.
If no voting indication is given, your proxy will vote or abstain from voting at his or her discretion. Your proxy will vote (or abstain from voting)
as he or she thinks fit in relation to any other matter which is put before the meeting. The notes to the proxy form explain how to direct your
proxy to vote on each resolution or withhold their vote.
7. In the case of joint holders, where more than one joint holders purports to appoint a proxy, only the appointment submitted by the most
senior holder will be accepted. Seniority is determined by the order in which the names of the joint holders appear in the Company’s register
of members in respect of the joint holding (the first named being the most senior).
8. CReST members who wish to appoint a proxy or proxies through the CReST electronic proxy appointment service may do so by using
the procedures described in the CReST Manual. CReST personal members or other CReST sponsored members and those CReST members
who have appointed a voting service provider(s), should refer to their CReST sponsor or voting service provider(s) who will be able to take
the appropriate action on their behalf.
9. In order for a proxy appointment or instruction made using the CReST service to be valid, the appropriate CReST message (a “CReST
Proxy Instruction”) must be properly authenticated in accordance with euroclear UK & Ireland Limited (formerly CReSTCo’s) specifications
and must contain the information required for such instructions, as described in the CReST Manual. The message, regardless of whether it
constitutes the appointment of a proxy or an amendment to the instruction given to a previously appointed proxy, must, in order to be valid,
be transmitted so as to be received by the issuers’ agent (ID RA10) by the latest time for receipt of proxy appointments specified in this notice.
For this purpose, the time of receipt will be taken to be the time (as determined by the timestamp applied to the message by the CReST
Applications Host) from which the registrars are able to retrieve the message by enquiry to CReST in the manner prescribed by CReST.
After this time, any change of instructions to proxies appointed through CReST should be communicated to the appointee through other means.
CReST members and, where applicable, their CReST sponsors or voting service provider(s) should note that euroclear UK & Ireland Limited
does not make available special procedures in CReST for any particular messages. Normal system timings and limitations will therefore apply
in relation to the input of CReST Proxy Instructions. It is the responsibility of the CReST member concerned to take (or, if the CReST member is
a CReST personal member or sponsored member or has appointed a voting service provider(s), to procure that his CReST sponsor or voting
service provider(s) take(s)) such action as shall be necessary to ensure that a message is transmitted by means of the CReST system by any
particular time. In this connection, CReST members and, where applicable, their CReST sponsors or voting service providers are referred,
in particular, to those sections of the CReST Manual concerning practical limitations of the CReST system and timings.
10. The Company may treat as invalid a CReST Proxy Instruction in the circumstances set out in Regulation 35(5)(a) of the Uncertificated Securities
Regulations 2001.
11. Where a copy of this notice is being received by a person who has been nominated to enjoy information rights under section 146 of the
2006 Act (“nominee”):
(a)
(b)
the nominee may have a right under an agreement between the nominee and the member by whom he was appointed, to be
appointed, or to have someone else appointed, as a proxy for the meeting; or
if the nominee does not have any such right or does not wish to exercise such right, the nominee may have a right under any such
agreement to give instructions to the member as to the exercise of voting rights.
12. Capita Asset Services maintain the Company’s share register. They also provide a telephone helpline service on 0871 664 0300 (calls cost
10p a minute plus network extras. Lines are open from 8.30am to 5.30pm, Monday to Friday. If you have any queries about voting or about
your shareholding, please contact Capita Asset Services.
13. Members have the right to ask questions at the meeting in accordance with section 319A of the 2006 Act.
14. The following documents are available for inspection by members at the registered office of the Company (except Bank Holidays) during the
normal business hours and at the place of the meeting not less than 15 minutes prior to and during the meeting:
(a)
the register of Directors’ interests required to be kept under section 809 of the 2006 Act; and
(b) copies of the Directors’ service contracts.
15. Information regarding the AGM, including the information required by section 311A of the 2006 Act, is available from the Company’s
website – www.toppstiles.co.uk.
rob parker – Company Secretary
registered office: Thorpe Way, Grove Park, enderby, Leicestershire, Le19 1SU
registered no: 3213782
Plc
Annual Report and Financial Statements 2013
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| explanatOry nOtes tO tHe nOtice Of annual general Meeting
THe ANNUAL GeNeRAL MeeTING of the Company will be held at the Company’s premises at Thorpe Way, Grove Park, enderby, Leicestershire
Le19 1SU on 24 January 2014 at 10.00am.
Four of the resolutions are to be taken at this year’s Annual General Meeting as special business. By way of explanation of these and certain
other resolutions:
Ordinary business
Resolution 2
Declaration of Final Dividend
A final dividend of 1p per Ordinary Share is recommended by the Directors for payment to shareholders on the register of members of the
Company at 6.00pm on 27 December 2013. Subject to approval by the Ordinary Shareholders at the Annual General Meeting, the dividend
will be paid on 31 January 2014. An interim dividend of 0.50p was declared which means the total dividend level will be 1.50p per Ordinary
Share for the 52 weeks prior to 28 September 2013.
Resolutions 3 to 8
Re-election of Directors
The Company’s articles of association require that all members of the Board of Directors submit themselves for re-election at least every three years
with the exception of the Rt. Hon. J.M. Jack who has served for at least nine years and therefore retires and offers himself for re-election annually.
Although not required by the Company’s articles, each of the remaining Directors will, in the interests of good corporate governance, retire
voluntarily and offer himself for re-election. Brief biographical details about all the Directors appear on pages 32 and 33 of the Annual Report and
Financial Statements.
Special business
Resolution 11
Authority to issue shares
This resolution deals with the Directors’ authority to allot Relevant Securities in accordance with section 551 of the CA 2006.
This resolution complies with guidance issued by the Association of British Insurers (ABI) in December 2008 (and revised in November 2009)
and will, if passed, authorise the Directors to allot:
• In relation to a pre-emptive rights issue only, equity securities (as defined by section 560 of the CA 2006) up to a maximum nominal amount of
£4,264,807 which represents approximately 66.66% of the Company’s issued Ordinary Shares (excluding treasury shares) as at 24 January
2014. This maximum is reduced by the nominal amount of any Relevant Securities allotted under the authority set out in paragraph 11.2.
• In any other case, Relevant Securities up to a maximum nominal amount of £2,132,403 which represents approximately 33.3% of the
Company’s issued Ordinary Shares (excluding treasury shares) as at 24 January 2014. This maximum is reduced by the nominal amount of
any equity securities allotted under the authority set out in paragraph 11.1 in excess of £2,132,403.
Therefore, the maximum nominal amount of Relevant Securities (including equity securities) which may be allotted under this resolution is
£4,264,807.
The Company does not currently hold any treasury shares.
The authority granted by this resolution will expire 15 months following the resolution being passed or, if earlier, the date of the next Annual
General Meeting of the Company.
The Directors have no present intention to exercise this authority.
In this resolution, Relevant Securities means:
• shares in the Company, other than shares allotted pursuant to:
• an employee share scheme (as defined in section 1166 of the CA 2006);
• a right to subscribe for shares in the Company where the grant of the right itself constituted a Relevant Security; or
• a right to convert securities into shares in the Company where the grant of the right itself constituted a Relevant Security; and
• any right to subscribe for or to convert any security into shares in the Company other than rights to subscribe for or convert any security into
shares allotted pursuant to an employee share scheme (as defined in section 1166 of the CA 2006). References to the allotment of Relevant
Securities in this resolution include the grant of such rights.
88
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Annual Report and Financial Statements 2013
AdditionAl informAtion Resolution 12
Disapplication of statutory rights of pre-emption
This proposed resolution seeks to obtain power under section 571 of the 2006 Act to enable the Directors to allot, for cash, shares with an
aggregate nominal value of £320,180 equal to approximately 5% 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 share
option schemes, the Directors have no present intention to exercise its authority under this resolution 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.
Resolution 13
Authority to purchase Ordinary Shares
At the Annual General Meeting, Ordinary Shareholders are being invited under Resolution 13 to grant authority to the Company to make market
purchases of its Ordinary Shares. It is proposed such authority shall expire on the conclusion of the Annual General Meeting to be held in 2015
or 12 months from the date of this resolution, if earlier. This authority will be limited to the purchase of not more than 14.9% of the Ordinary Shares
currently in issue. This represents the maximum amount of Ordinary Share capital in issue which is permitted before tender or partial offer to all
shareholders is required to be made to perform any share buy-back. The maximum price payable under this authority will be 105% of the average
of the middle market quotations of an Ordinary Share for the five business days before the relevant purchase and the minimum price will be 31⁄3p
per Ordinary Share. In considering whether or not to purchase Ordinary Shares under the market purchase authority, the Directors will take into
account cash resources, the effect on gearing and other investment opportunities before exercising the authority. In addition, the Company will only
exercise the authority to make such a purchase in the market when the Directors consider it is in the best interests of the shareholders generally to do
so and it should result in an increase in earnings per Ordinary Share. As at 29 September 2013, there were options to subscribe for 5,731,033
equity shares outstanding under various schemes representing approximately 3% of the current issued share capital of the Company. If the authority
sought by Resolution 13 was exercised in full, the number of outstanding options would represent approximately 3.5% of the issued share capital
following the repurchase of shares.
Resolution 14
Notice period for general meetings
This resolution is required to reflect the implementation in August 2009 of the Shareholder Rights Directive. The regulation implementing this
Directive increased the notice period for general meetings of the Company to 21 days. Previously the Company was able to call general meetings
(other than an AGM) on 14 clear days’ notice and would like to preserve this ability going forward. In order to be able to do so shareholders
must approve the calling of meetings on 14 days’ notice. Resolution 14 seeks such approval. The approval will be effective until the Company’s
next Annual General Meeting, when it is intended that a similar resolution will be proposed. The Company will also need to meet the requirements
for electronic voting under the Directive before it can call a general meeting on 14 days’ notice.
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A
Aaron Foster
Aaron Gerfen
Aaron Rivett
Aaron Smith
Abdirahman Ibrahim
Abdul Rouf
Abraham Sanchez
Adam Chapman
Adam Clarke
Adam Close
Adam Cook
Adam Crowe
Adam Davidson
Adam Gale
Adam Ireland
Adam Moate
Adam Nuttall
Adam Parsons
Adam Riley
Adam Rodriguez
Adam Shearsmith
Adam Stevenson
Adam Venmore
Adam Ward
Adam Williams
Adam Wolniewicz
Adil Rajah
Adnan Abdullah
Adrian Kimber
Adrian Rimmington
Ahmed Ali
Aileen Crossley
Ajay Arya
Ajay Bhakri
Akiyemi Orekoya
Aklakud Duha
Akshey Vadgama
Alan Gorry
Alan Haji
Alan Hughes
Alan Parker
Alan Saunders
Alan Sinclair
Alan Smalley
Alan Sproston
Alan White
Alan Wrighting
Albert Kujur
Alex Openshaw
Alex Whitmore
Alexander Armstrong
Alexander esposito
Alexander Heskett
Alexander Nicholls
Alexander Onions
Alexandra Anton
Alexandria Ferguson
Alfred Kamara
Ali Rizvi
Alison Hunt
Alison Walkinshaw
Alister Watt
Allan Harper
Alvin Chinyanga
Amanda Green
Amanda Hullett
Amanda Samuel
Amandeep Singh
Amit Bhargava
Amy Randall
Amy Smith
Ananthan Sivanesan
Anantharupan
Ananthapuvirajah
Andre Oliveira
Andrea Crooks
Andrea Moon
Andrew Bartlett
Andrew Belson
Andrew Brookfield
Andrew Canham
Andrew Chapman
Andrew Childs
Andrew Clay
Andrew Clayton
Andrew Collins
Andrew Cox
Andrew Curr
Andrew Curtis
Andrew Davis
Andrew elliott
Andrew Green
Andrew Hainge
Andrew Hamilton
Andrew Hanson
Andrew Harrison
Andrew Hill
Andrew Keattch
Andrew King
Andrew Middleton
Andrew Page
Andrew Phillips
Andrew Playfoot
Andrew Riley
Andrew Salkeld
Andrew Sharkey
Andrew Shaw
Andrew Smith
Andrew Taylor
Andrew Wagstaff
Andrew Warne
Andrew Waterfield
Andrew Wilkinson
Andrew Winterburn
Andrew Wood
Andrew Woodhouse
Andrew Woods
Andrew Young
Angela Capp
Angelique Da Silva
Ann Mathias
Anna Forden
Anna Wedrzyk
Annmarie Malone
Anthony Christopher
Anthony Cox
Anthony Daly
Anthony Davies
Anthony Dedman
Anthony Docherty
Anthony Gibby
Anthony Gilbert
Anthony Gregory
Anthony Havvas
Anthony James
Anthony Linsell
Anthony Martin
Anthony Molyneux
Anthony Tarr
Anthony Wood
Antonia Brown
Antonio Perkins
Antony Belham
Anub Varghese
Anuraag Parashar
Anwar Marshall
Arisha Khullar
Arnold Harrison
Arnold Jones
Aron Hoff
Arthur Stafford
Arthur van Aswegen
Ashleigh Mackinnon
Ashleigh Richards
Ashley Cutler
Ashley Martin
Asim Ali
Asteraya engdayehu
Astone Davids
B
Barbara Connor
Barbara Smith
Barclay Harding
Barrie Palmer
Barry edwards
Barry Hodges
Barry Jones
Barry Taylor
Barry Theobald
Barry Thomas
Barry Veasey
Barry Webber
Ben Armitage
Ben Bright
Ben Brooker
Ben Cook
Ben elworthy
Ben Holloway
Ben Hoyle
Ben Maguire
Ben Sawyer
Ben Stapley
Ben Wootton
Benjamin Hardie
Benjamin Lawson
Benjamin Rich
Benjamin Rowe
Benjamin Willis
Benjamin Woollins
Bernadette Peasland
Beth Boulton
Beth Crozier
Bilal Rafiq
Billy Hutchins
Billy Lodge
Bjorn Bjergfelt
Bolaji Adeyanju
Bradley Ball
Bradley Crome
Bradley Moore
Brandon Abels
Brandon Sykes
Brant Wells
Bregetta Hill
Brendan Flynn
Brendan Holdaway
Brett Goulden
Brian Cariello
Brian Cook
Brian Cooper
Brian Cox
Brian Crews
Brian Dicks
Brian Flatters
Brian King
Brian Linnington
Brian Lockart
Bridget Mappley
Bruce Fielding
Bruce Garrod
Bruno Bernasconi
Bryan Torres Teran
C
Cade Somerville
Calbert Hall
Callan Rushen
Campbell Marr
Carl Chamberlain
Carl Cook
Carl Courtney
Carl Cumberbatch
Carl Dyke
Carl Foster
Carl Fraser
Carl Hermitt
Carl Paternoster
Carl Walker
Carl Whatley
Carlos Chowdhury
Carly Porter
Carol english
Caroline Bailey
Caroline Bennett
Caroline May
Caroline Vernon-Ball
Carolyn Paull
Catherine Platt
Charlene Walpole
Charles Robbins
Charles Ross
Charles Smith
Charles Taylor
Charles Woodward
Charlie Hamblin
Charlotte Driscoll
Charlotte Lamming
Chelsea Crichton
Cherie Ahmet
Cheryl Vearncombe
Chetna Shah
Chia Abdulla
Chirag Shah
Chloe Bennett
Choudre Grobler
Christer Vida Farcinsen-Leth
Christian Banham
Christian Clarke
Christina Langridge
Christine Hendry
Christine Thistlethwaite
Christopher Beeson
Christopher Bland
Christopher Bowden
Christopher Bowles
Christopher Brereton
Christopher Cartey
Christopher Collins
Christopher Cooper
Christopher Curtis
Christopher Foster
Christopher Harbutt
Christopher Heyes
Christopher Holland
Christopher Howe
Christopher Jensen
Christopher Joynes
Christopher Lamb
Christopher Leach
Christopher Markham
Christopher Nicholls
Christopher Nixon
Christopher Nottle
Christopher Potter
Christopher Sansby
Christopher Santos
Christopher Stobbs
Christopher Turley
Christopher Walley
Christopher Warren
Christopher White
Christopher Williamson
Chudry Ghani
Cindy Cox
Clair Jeffries
Claire Chaffe
Claire Rayton
Claire Tiney
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Annual Report and Financial Statements 2013
AdditionAl informAtion Clare Barden
Clare Bytheway
Colin Griffiths
Colin Harvey
Colin Hayward
Colin Hoban
Colin Joy
Colin Markham
Colin Rymer
Colin Skinner
Colin Taylor
Connor Bellhouse
Connor Saunders
Conrad Harrup
Cora Morrison
Corrina Bowers
Craig Connor
Craig Dolling
Craig Hill
Craig Murphy
Craig Nicholson
Craig Ollard
Craig Reed
Craig Smith
Craig Tetlow
Cristina Cole
Curtis Hatton
Czeslaw Majorek
D
Dale Benford
Dale Huckle
Dale Loy
Dale Stone
Damian Harrison
Damontre Love
Daniel Brain
Daniel Branson
Daniel Cox
Daniel Curtin
Daniel evans
Daniel Fallows
Daniel Findlay
Daniel Friend
Daniel Hill
Daniel Ingham
Daniel Jones
Daniel Lee
Daniel Little
Daniel Loft
Daniel Mclean
Daniel Musguin
Daniel Robinson
Daniel Saltmarsh
Daniel Sheppard-Brown
Daniel Stevenson
Daniel Thompson
Daniel Thornley
Daniel Weatherley
Daniel Woodford
Daniel Wren
Danielle Noyes
Danielle Omara
Danielle Whittaker
Danniella Green
Danny Burgess
Darone Dubois-Gayere
Darran Wood
Darren Bebbington
Darren Bentley
Darren Bradley
Darren Chester
Darren Doughty
Darren Hancock
Darren Harper
Darren Hyman
Darren Mitchell
Darren Morgan
Darren Rawlings
Darren Read
Darren Rutledge
Darren Square
Darren Wagg
Darren Weedan
Darron Bicknell
Darron Kerr
Darryl Ferry
David Atherton
David Augustus
David Blades
David Bolingbroke
David Brooks
David Burnikell
David Carpenter
David Clare
David Coupland
David Critchlow
David Dorney
David elliott
David Godbold
David Harper
David Hatton
David Hayers
David Henderson
David Hill
David Hirst
David Hope
David Hussey
David Jobling
David Jones
David Kershaw
David Kettlewell
David Knight
David Lane
David Locke
David Macartney
David Marsh
David Matthews
David Meers
David Miller
David Morris
David Murray
David Nichol
David Oliver
David Palmer
David Parr
David Prime
David Rendall
David Savage
David Sheehy
David Shewan
David Simons
David Smith
David Steel
David Stott
David Tempest
David Thomasson
David Thompson
David Townsley
David Webb
David Whitelaw
David Wilson
David Yallop
Dawn Allan
Dawn Gale Curtis
Dean Beale
Dean Bull
Dean Harper
Dean Johnson
Dean Macmillan
Dean Marshall
Dean Miller
Dean Newell
Dean Smith-Crome
Dean Titchen
Dean Woolley
Deana Turner
Deborah Gobey
Deborah Rooney
Decland Speede
Deji Babatope
Delreena Richardson
Demi-Louise Skinner
Denis O Brien
Denise Fishwick
Dennis Jepson
Dennis Jovellanos
Dennis Lammas
Denzil Johns
Derek Amoo
Derek Lambourn
Derek Sim
Derek Smith
Devias Gudka
Devindren Govender
Dewi evans
Dhanvir Sandhu
Dilawar Ali
Dilip Parmar
Dinesh Amin
Dipal Parikh
Dishon Meade
Divyeshkumar Javiya
Dominic D’Souza
Dominic Hall
Dominic Reilly
Dominic Summers
Dominic Vass
Donald Magullian
Donovan Robinson
Dorothy Stewart
Douglas Hartness
Douglas Macquarrie
Duane Glover
Duncan Foy
Duncan Fraser
Dylan Roberts
E
eamonn Clancy
elizabeth Harbord
ellie Howcroft
emily Grice
emily Lenton
emma Childs
emma Hatton
emma Leavis
emma Whatson
emmanuel Liwao
emran Mannan
eric Asuming
ermiyas Girma
ethan Short
ewa Lukaszewska
ezra evans
F
Faisal Ashraf
Faizar Ali
Felipe Da Rocha West
Finbarr Mcquaid
Fiona Grant
Fitz Martin
Frances Aylward
Francesca Wright
Frank Hibbert
G
Gage Wheeldon
Gail Purves
Gareth Carnegie
Gareth Carruthers
Gareth Davies
Gareth Moss
Gareth Pye
Gareth Roberts
Gareth Williams
Garry Case
Garry Hardy
Garry Pilling
Gary Ashdown
Gary Bloomfield
Gary Curtis
Gary Gear
Gary Gee
Gary Gledhill
Gary Hawrylak
Gary Marsden
Gary Marshall
Gary Peters
Gary Roberts
Gary Thatcher
Gary Woolmore
Gavin Bennett
Gavin Collins
Gavin Magwood
Gavin Mitchell
Gavin Richardson
Gemma Stephens
George Latham
George Martinesz
George Peck
George Tuplin
Georgina Joynson
Geraint Thorne
Gerard Mallon
Gethin Jordan
Gianfranco Zanolini
Gillian Grace
Glen Holloway
Glendale Canoville
Glenn Alford
Glenn Claridge
Glenn elgy
Glyn Rogers
Gordon Davies
Gordon Vallente
Goutam Saha
Graham Beaney
Graham Cooper
Graham Jones
Graham Livingstone
Graham Vance
Grant Harris
Grant Spicer
Gregory Barwick
Gregory McHugh
Gregory O’Loughlin
Grzegorz Kaminski
Gurnaam Sharma
Guy Ferguson
H
Hardeep Samra
Harmeet Jassal
Harry Biggs
Harry Brazier
Harry Pinsker
Hassan Rajah
Hazel Millington
Heather Findler
Heidi McGonigle
Helen Gosling
Helen Hughes
Hitesh Nathu
Holly Nettleton
Hugh Selley
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I
Iain Arnott
Iain Masters
Ian Aikman
Ian Bird
Ian Bloomfield
Ian Costen
Ian Gould
Ian Hughes
Ian Jones
Ian Marshall
Ian Mcloughlin
Ian Mcneish
Ian Noon
Ian Paterson
Ian Sykes
Ian Tivendale
Ian Winterburn
Ima ekanem
Imran Ashraf
Imran Isat
Imran Khalid
Iqbal Hussain
Irene Dickinson
Irfan Suleri
Isaac Halstead
Izabela Krzyszkowska
Jaasir Wazir
J
Jabbar Shah
Jacek Zebrowski
Jack Cairns
Jack Campany
Jack Coker
Jack Maddison
Jack O’Neill
Jack Walker
Jack Whitehead
Jacob Coleman
Jacqueline Byrne
Jacqueline Desborough-
Morehead
Jacqueline Farnan
Jailuene Peake
Jaime Bugg
Jair Sharp
Jajwinder Harar
Jake Leach
Jake Missen
Jake Shopland
Jake Woods
Jake Wright
James Bayley
James Biesty
James Butler
James Cameron
James Clifford
James Faulkner
James Fox
James Heard
James Holt
James Hubball
James Judkins
James Mcgeoch
James Morgan
James Murphy
James Parle
James Pascoe
James Patston
James Pearson
James Pilfold
James Robertson
James Rolfe
James Saunders
James Taylor
James Thorning
James Tuvey
James Vander Plank
James Walker
James Worden
Jamie Axten
Jamie evans
Jamie Rose
Jamie Sia
Jamie Thain
Jamie Wenborn
Jan Reddi
Jane Coventry
Janet Riley
Janice Millett
Janie Bungey
Jarreth Hawkins
Jason Bennett
Jason Buckley
Jason Clare
Jason Coupland
Jason Darcy
Jason ealden
Jason Gallagher
Jason Hannon
Jason Knox
Jason Meadows
Jason Nettleford
Jason Perry
Jason Pratt
Jason Prevett
Jason Rose
Jason Thomas
Javeed Parkar
Jay Cinense
Jay Strawford
Jayandrie Chetty
Jayaprakash Paragjee
Jayash Patel
Jayde Bailey
Jaykumar
Kulasegarampillai
Jaymal Arjan
Jean-luc Brocklehurst
Jeannette Hastie
Jedrzej Politowski
Jeffrey Adubofour
Jeffrey Armstrong
92
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Annual Report and Financial Statements 2013
Jemma Jordan
Jemma Wyatt
Jenna Sysum
Jennifer Seabrook
Jennifer Wall
Jenny Mason
Jessica Mccarthy
Jessica Thiari
Jeton Jashari
Jill Cox
Joanna Terrell
Joanne Cox
Joanne elton
Jodie Baigrie
Joe Cromie
Joe Lamond
Joe Smith
Joelle Cochrane
John Bourke
John Coleman
John Cook
John Cooper
John Duffy
John ellis
John Fawkes
John Forden
John Foster
John Gardner
John Harris
John Harrison
John Hesp
John Hickey
John Hughes
John Keouski
John Lewis
John Marris
John Mclaren
John Moat
John Page
John Pilling
John Seager
John Shaw
John Smith
John Tait
John Taylor
John Thompson
John Williams
John Wright
Johnathan Mccallum
John-Paul Jones
Jon Clarke
Jon Reynolds
Jon Thatcher
Jonathan Bainbridge-
Coombs
Jonathan Boxall
Jonathan Francois
Jonathan Hall
Jonathan Hargreaves
Jonathan Hicks
Jonathan Mills
Jonathan Morgan
Jonathan Pringle
Jonathan Sheerin
Jonathan Smith
Jonathan Wallace
Jonathan Williams
Jonathan Winzer
Jonathan Woodroff
Jon-paul Hughes
Jon-Paul Russell
Jordan Gibbins
Jordan Macdonald
Jordan McKinlay
Joseph Cox
Joseph Gregorace
Joseph Heath
Joseph Lawton
Joseph Rudd
Joseph Sweeney
Joshua Badrick
Joshua Batterham
Joshua Gaston
Joshua Groener
Joshua Harris
Joshua Rapley
Joshua Wood
Joshua Wright
Jubair Ahmed
Juginder Gill
Julie Brachtvogel
Julie Christie
Julie Cox
Julie Fewings
Julie Jordan
Juliet Wilford
Justin Bradley
Justin evans
Justin Korankye-Addai
Justin Morgan
K
Kalpeshkumar Patel
Kalpik Singh
Kamil Janas
Kamlesh Shah
Karen Brook
Karen Dodds
Karen Leimetter
Karen Sutcliffe
Karl Batterham
Karl Stephens
Karl Turner-Talmage
Karl Verry
Karl Wilson
Kashan Riley
Kashif Munir
Katarzyna Roberts
Katherine Davis
Kathryn Baird
Kathryn Robinson
Katie Brindley
Katy Arthur
Kawaljit Gulati
Keenan Childs
Keith Ambrose
Keith earl
Keith Fitzpatrick
Keith Johnson
Keith Rudkin
Keith Storrier
Keith Webb
Kellie Collins
Kellie Harris
Kelly Carvell
Kelly Hackman
Kelly Horsburgh
Kelly Savile
Kelly-Anne O Connor
Kelvin Lansdowne
Kenneth Owen
Kenneth Pettengale
Kenneth Westley
Kenneth Williams
Kerim Ozkolaci
Kerri Atkinson
Kerry Bates
Kerry Hume
Kevan Richardson
Kevin Baker
Kevin Bowtle
Kevin Fox
Kevin Hailes
Kevin Hardy
Kevin Hartley
Kevin Hastings
Kevin Hodson
Kevin Jeans
Kevin Jones
Kevin Nicol
Kevin Rowe
Kevin Schofield
Kevin Sherwood
Kevin Thorne
Kieran Barnes-Warden
Kieran Harvey
Kieron Clarke
Kim Liddle
Kirstie Leonard
Kirsty Haughton
Kirti Patel
Kristian Catterall
Kristian Powell
Kristopher Bailey
Krystle Milan
Kuldeep Singh
Kulvinder Singh
Kunal Pandya
Kyle Francis
Kyle Hardie
L
Lance Cale
Laura Adams
Laura Brice
Laura edwards
Laura Henry
AdditionAl informAtion Laura James
Laura Johnson
Laura Morris
Laura Richards
Lauren Bettison
Laurence Jones
Leah Norris
Leanne Curry
Leanne Palmer
Lee Baxter
Lee Clarke
Lee Dering
Lee Dover
Lee Durrant
Lee etheridge
Lee Galloway
Lee Gibson
Lee Henry
Lee Hutchinson
Lee Jacovou
Lee James
Lee Johnstone
Lee Mayfield
Lee Mcconnell
Lee Morris
Lee Peake
Lee Pinder
Lee Read
Lee Roskruge
Lee Stratton
Lee West
Lee Wilkinson
Leema Sabir
Leena Ramsaha
Leigh Hyam
Leighton Davies
Leo O’Doherty
Leon Oneill
Leonard Finch
Lesley Watson
Lesley Willcox
Lesley Wilson
Leslie Shemmeld
Lester Marshall
Levi Jordan Welch
Lewis Adkins
Lewis Axford
Lewis Franklin
Lewis Hall
Lewis Saunders
Lewis Walter
Leyton Bellamy
Leza McDonald
Liam Allen
Liam Cowan-Fields
Liam Fortin
Liam Gulliver
Liam Hunt
Liam Mulhall
Liam Piper
Lianne Harrison-Allcock
Libby Field
Lilian Pilling
Linda Herbert
Linda Scott
Lindsey Thorburn
Lisa Algar
Lisa Bannister
Lisa Holmes
Lloyd Jackson
Loren Sherwin
Lorna Hislop
Loucas Louca
Louis Crowther
Louis Prosser
Louis Whittle
Louise Sprigg
Louise Wilson
Lucinda Mazzei
Lucy Mcgennity-Bane
Luke Carter
Luke Day
Luke Kerr
Luke Livermore
Luke Maycock
Luke Mcnally
Luke Potiphar
Luke Sargent
Luke Saunders
Luke Tilley
Luke Woodward
Lynette Levi
Lynn Pearson
M
Maciej Dziabas
Maciej Rabczewski
Mahomadzuber Saiyed
Malcolm Ferguson
Malcolm Temple
Malik Khaliq
Mandeep Singh
Mandy Aidney
Manish Ghelabhai
Manjit Ahluwalia
Mansoor Ali
Marc Breeze
Marc Rudge
Marcin Kupczyk
Marcin Sakowicz
Marcus Birch
Margaret Lawrie
Margaret Potter
Maria Furniss
Maria Rushworth
Maria Thompson
Mariangela Lombardi
Mark Allman
Mark Ames
Mark Barrett
Mark Bianchi
Mark Bradbury
Mark Braithwaite
Mark Brown
Mark Bryan
Mark Burgess
Mark Coe
Mark Discombe
Mark Finucane
Mark Frisby
Mark Fuller
Mark Gasson
Mark Geary
Mark Holland
Mark Hunter
Mark Johnson
Mark Johnston
Mark Keymer
Mark Lever
Mark Maciver
Mark Mott
Mark Owen
Mark Palmer
Mark Pancott
Mark Stephens
Mark Stokoe
Mark Stone
Mark Sweet
Mark Tennant
Mark Thompson
Mark Tilley
Mark Vaughan
Mark Waldock
Mark Walters
Mark Winder
Mark Winger
Mark Wright
Marlon Barnes
Martin Belford
Martin Byers
Martin Derricott
Martin evans
Martin Foster
Martin Leon
Martin Moore
Martin Morris
Martin Osborne
Martin Pickard
Martin Sloggett
Martin Smyth
Martin Williams
Martin Winterburn
Martin Wys
Martina Way
Martyn Somerville
Martyn Spring
Martyn Strange
Mary Syme
Mathew Clucas
Mathew Tapp
Matthew Antell
Matthew Attwood
Matthew Britton
Matthew Clamp
Matthew Clayton
Matthew Copestake
Matthew Dean
Matthew Dunne
Matthew Fisher
Matthew Foster
Matthew Foulger
Matthew Harris
Matthew Hawley
Matthew Hay
Matthew Hill
Matthew King
Matthew Lloyd
Matthew Love
Matthew Mcphee
Matthew Moore
Matthew Nash
Matthew Richardson
Matthew Robinson
Matthew Sigley
Matthew Sims
Matthew Singleton
Matthew Stevenson
Matthew Stewart
Matthew Wesson
Matthew Whitlock
Matthew Williams
Matthew Woodhouse
Matthew Wright
Max Whitfield
Megan Broadway
Mehmet Asdoyuran
Melanie Gray
Melanie Lilley
Melanie Toole
Melissa Robinson
Melissa Wadman
Mellisa Kennett
Melton Thompson
Melvyn Chamberlain
Mervyn Thorne
Metimiku Yohannes
Michael Asumadu
Michael Blinkhorne
Michael Booth
Michael Boughton
Michael Bowden
Michael Braithwaite
Michael Buckley
Michael Butler
Michael Campbell
Michael Cosgrove
Michael Darroch
Michael Dinter
Michael earls
Michael Fannon
Michael Finn
Michael Foley
Michael Haggett
Michael Hall
Michael Hopper
Michael Huskisson
Michael Ingham
Michael Jack
Michael Jenks
Michael King
Michael Lay
Michael Litster
Michael Lovelock
Michael Patrick
Michael Queen
Michael Sackey
Michael Stephens
Michael Stewart
Michael Upton
Michael Van Sittert
Michael Weeks
Michael Wells
Michaela Thomas
Michal Politowski
Michele Poxon
Michelle Furber
Michelle Hill
Michelle Kempson
Michelle Keys
Michelle le Monnier
Michelle Moore
Mike Moss
Miles Burden
Mitchell Williams
Mitul Patel
Mohamed Patel
Mohammad Mukhtar
Mohammed Amin
Mohammed Jamil
Mohammed Jimale
Mohammed Khalid
Mohammed Memi
Mohammed Nawaz
Mohammed Parvaz
Morva Leslie
Mr Topps (retired)
Mubashir Uddin
Muhammad Anaib
Mehmood
Muhammad Mirza
Murat Macit
Murdo Martin
Myke Turner
N
Naim Bourhaba
Narinder Chatha
Natalie Frankum
Natalie Mccuaig-Finlay
Natalie Palumbo
Natasha Browne
Nathan Austin
Nathan Coulthard
Nathan Hands
Nathan Harry
Nathan Sobers
Nathan Winterton
Nathan Wolowicz
Navesh Naidoo
Navinder Johal
Ndumiso Mafa
Neil Ammon
Neil Brownley
Plc
Annual Report and Financial Statements 2013
93
84 – 96Additional Information01 – 31Strategic Report32 – 45Governance46 – 83Financial Statements | tHe teaM (CONTINUeD)
Neil Donkin
Neil Hendy
Neil Homan
Neil Jones
Neil Southgate
Neil Topping
Neil Wardlaw
Neil Williams
Neill Wiltshire
Nicholas Billyeald
Nicholas Donkin
Nicholas Gadd
Nicholas Gussow
Nicholas Houghton
Nicholas Knowles
Nicholas Lawrence
Nicholas Lodge
Nicholas Smith
Nicholas Walch
Nicholas Withers
Nicholaus Buchanan
Nick Wardman
Nicky Glenister
Nicola Biggs
Nicola Mcwatt
Nicola Squires
Nicole Andrews
Nigel Fleming
Nigel Hickman
Nigel Parry
Nikkole Jury
Nikola Sutton
Nikunjkumar Patel
Niroshan Athmajothy
Nital Patel
O
Oliver Clancy
Oliver Haghighi
Olivia Pilson-Wood
Omid Ibrahimi
Osemua Masaya
Owen Tudor
P
Paige Makepeace
Pankaj Bhardwaj
Paolo Segagni
Patricia evans
Patrick Coleman
Paul Baxter
Paul Burkett
Paul Burrow
Paul Carter
Paul Cartledge
Paul Chapman
Paul Clark
Paul Collett
Paul Cowen
Paul Cull
Paul Dalby
Paul Davey
Paul elliott
Paul Fitzsimmons
Paul Galvin
Paul Gillham
Paul Grant
Paul Holmes
Paul Hutchins
Paul Irving
Paul Kelly
Paul Krawczyk
Paul Laverty
Paul Lester
Paul McCabe
Paul Miller
Paul Mills
Paul Nicholls
Paul Noyes
Paul Ruddle
Paul Silvester
Paul Smith
Paul Starkey
Paul Tennant
Paul Tregaskis
Paul Vandendyck
Paul West
Paul Whittington
Paul Whitworth
Paul Wiltshaw
Paula Budsworth
Pauline Harrison
Pawel Warych
Pete Bauer
Peter Anderson
Peter Callan
Peter Charters
Peter Hanley
Peter Higgins
Peter Hogg
Peter Jones
Peter Nicholson
Peter Oldman
Peter Scutt
Peter Simmonds
Peter Stubbs
Peter Turtle
Peter Walmsley
Peter Young
Philip Banks
Philip Cranston
Philip Dunn
Philip Gallop
Philip Hibbert
Philip Kelly
Philip Mccarney
Philip Quane
Phillip Goode
Phillip Goodeve
Phillip Gundel
94
Plc
Annual Report and Financial Statements 2013
Robert Aldridge
Robert Beard
Robert Bindon
Robert Chawner
Robert Clarke
Robert Collins
Robert exley
Robert Gedlek
Robert George
Robert Howes
Robert Howker
Robert Jay
Robert Keohone
Robert King
Robert Kreamer
Robert Kweli
Robert Lynch
Robert Lyus
Robert Mccormick
Robert Mcgowan
Robert Moss
Robert Myers
Robert Parker
Robert Prince
Robert Prothero-Dyer
Robert Swift
Robin Perrin
Robin Stagg
Robin Thomson
Rodney Meyer
Roger Gridley
Roger Lazenby
Ronald Forester
Ronald Woolgar
Ross Ashbrook
Ross Copley
Ross Langford
Ross Matthews
Roxanne evans
Roxanne Martin
Roy Peasland
Roy Redgate
Ryan Apark
Ryan Coleman
Ryan Curd
Ryan Gomersall
Ryan Jones
Ryan Lee
Ryan Randall
Ryan Sinclair
Phillip Hunt
Phillip Walters
Phillipa Hewitt
Phoebe Webb
Prakash Mistry
Premyslaw Swislocki
Pritesh Bhatt
Q
Quadeer Ahmed
Quang Pham
R
Rachit Vadgama
Rae Williams
Rafal Wojtasik
Raj Surani
Rajiv Vadgama
Ramanjeet Narain
Ravendra Bishun
Ravikumar Patel
Raymond Johnson
Rea Tarran
Rebecca Julier-Goodwin
Rebecca Lively
Rebecca Oblein
Reiss Maddison
Rhys Bennett
Rhys Bird
Rhys Hedges
Rhys Kelland
Rhys Sheridan
Ricardo Malcolm
Richard Bickers
Richard Brooks
Richard Carter
Richard Clark
Richard Davies
Richard edwards
Richard Fagan
Richard Fellows
Richard Geare
Richard Harris
Richard Hickman
Richard Hopkin
Richard Lewington
Richard McCracken
Richard O’donnell
Richard Oldale
Richard Slack
Richard Small
Richard Sumner
Richard Westell
Rickey Singleton
Ricky Bishop
Robbie Perry
Robel Ghebrewold
Robert Adams
Robert Adkins
S
Salman Bawani
Sam Davis
Sam Nortey
Sam Orton
Samantha Hunter
Samantha Leavis
Samantha Makrygiannis
Samantha Sumbler
Sameer Jamdar
Sampson Coomber
Samson Okolosi
Samuel Carey
Samuel Heath
Samuel Knowles
Samuel Lenny
Samuel Purvis
Sandip Sahota
Sandra Ramsay
Sanjeev Pal
Sarah Bacon
Sarah Cassam
Sarah Dobson
Sarah Drake
Sarah Harrup
Sarah Jordan
Sarah Kite
Sarah Newcomb
Savio Coutinho
Sayanthan Nallanathan
Scott Ahmad
Scott Birdseye
Scott Bond
Scott Bunting
Scott Campbell
Scott Currie
Scott Meadows
Scott Williams
Sean Baxter
Sean Cahill
Sean Collins
Sean Dare
Sean Gee
Sean King
Sean Mclean
Sean Taylor
Sean Weatherby
Shahid Mahmood
Shana esworthy
Shane Bryan
Shane Daley
Shane Hart
Shane Lindsay
Shane Malone
Shane Till
Shannon Woods
Sharon Beckett
Sharon Buckley
Sharon Simmonds
Shaun Barrett
AdditionAl informAtion Shaun Conroy
Shaun Dodson
Shaun Douglas
Shaun Harwood
Shaun Link
Shaun Mayes
Shaun Pawsey
Shaun Scott
Shelley Carey
Shelley Rutter
Shirley Moore
Shrina Shah
Sian Austen
Silvi Atanasova
Silvonne Mclean
Simon Beare
Simon Brookfield
Simon Chappell
Simon Coombs
Simon Crossland
Simon Frew
Simon Green
Simon Grimmett
Simon Jackson
Simon Jones
Simon Lasham
Simon Leslie
Simon Lewis
Simon Loach
Simon Marks
Simon Morgan
Simon Neal
Simon Newton
Simon Partridge
Simon Pitt
Simon Roberts
Simon Witham
Simone Turner
Siobhan Ashman
Sophia Miller
Sophie Doggart
Spyros Spyriadis
Stephanie Ailwood
Stephanie Nevett
Stephen Adams
Stephen Ainsworth
Stephen Anthony
Stephen Bloomfield
Stephen Brown
Stephen Buckley
Stephen Carr
Stephen Chalmers
Stephen Collins
Stephen Corkett
Stephen Foote
Stephen France
Stephen Freeman
Stephen Gaylor
Stephen Green
Stephen Hall
Stephen Iwasyszyn
Stephen Kelly
Stephen Lewis
Stephen Lopes
Stephen Machin
Stephen Marshall
Stephen Morris
Stephen Nicol
Stephen Seymour
Stephen Smith
Stephen Spurgeon
Stephen Starkie
Stephen West
Steve Smith
Steven Birch
Steven Bristow
Steven Buxton
Steven Christie
Steven Darbyshire
Steven Dooley
Steven Dyer
Steven Godwin
Steven Higgins
Steven Howells
Steven Jenkins
Steven Kernot
Steven Larner
Steven Macarthur
Steven Moxom
Steven Ohara
Steven Pressley
Steven Richards
Steven Walker
Steven Whitehead
Steven Wood
Stuart Baigent
Stuart Barrett
Stuart Clarke
Stuart Corlett
Stuart Davey
Stuart Dixon
Stuart Hall
Stuart Hitch
Stuart Munton
Stuart Pemberton
Stuart Rees
Stuart Ross
Stuart Whitby
Stuart Williams
Suresh Mistry
Susan Attwell
Susan Bill
Susan Black
Susan Henshall
Susan Hulme
Susan Law
Suventhiran
Shanmugarajah
Syeda Abbas
T
Tami Robinson
Tanya Sharpe
Terence Dooley
Terence Downing
Terry Salisbury
Thavaranjan Thavanesan
Theruchenthuran
erathinasingam
Thomas Brien
Thomas Crawford
Thomas Cunningham
Thomas Dickson
Thomas evans
Thomas Hudspith
Thomas Lowe
Thomas Mackey
Thomas Mills
Thomas Moran
Thomas Murray
Thomas Newman
Thomas Otley
Thomas Parkes
Thomas Ross
Thomas Ryan
Thomas Seaden
Thomas Swain
Thomas Wade
Thomas Watson
Tiffany Rose
Tiffany Vockins
Tim Bird
Timmy Sandwell
Timothy Bentley
Timothy Boardman
Timothy Coupland
Timothy Hartwick
Timothy Stanhope
Timothy Tatlock
Timothy Tuff
Tobias Knox
Toby Collins
Todd Routledge
Tom Lewis
Tony Nunn
Tracey Hansard
Tracy Wearmouth
Tracy Wickenden
Trashgim Syla
Trevor Routley
Trevor Thomas
Tristan Hodge
Tyler Manly
Tyrell Beckham
Tyrone Gambrell
U
Umair Qureshi
Upendra Dudhaiya
V
Veronica evett
Victor Omeife
Victoria Carrington
Victoria Moore
Vikki Williams
Vikram Singh
Vilius Meilus
Vincent Barber
Vinod Joshi
Vishaal Nath
W
Walkey Hilaire
Warren Bester
Wayne Cormack
Wayne Farini
Wayne Randall
Wayne Reed
Wayne Taylor
Wayne Wheeler
Wei Mean Donlan
Wendy Bruce
Wesley Neukermans
William Bailey
William Barreda
William Brownsell
William Cullen
William Gunshon
William Lewinton
William Mason
William Mcphee
William Ralls
William Ryves
William Wylie
Y
Yogendra Gajbhiye
Yohannes Getachew
Yvonne Burgess
Z
Zaccai Newman
Zack Shine
Zahid Hossain
Zainab Idris
Zlatko Milovanovic
Zoe Atkinson
Zoe Derry
Zoe Mills
Plc
Annual Report and Financial Statements 2013
95
84 – 96Additional Information01 – 31Strategic Report32 – 45Governance46 – 83Financial Statements | stOre lOcatiOns
Truro
Huntingdon
Market Harborough
Wellingborough
Milton Keynes
Luton
St Neots
Bedford elms
Letchworth
Aylesbury
Welwyn Garden City
Stevenage
Watford
Waterlooville
Dorchester
Glastonbury
Weymouth
Harlow*
Swindon*
eastbourne*
exeter*
Plymouth*
Wales
Wrexham
Cardiff – Hadfield Rd
Cardiff – Newport Rd
Bridgend
Merthyr Tydfil
Cross Hands
Neath
Carmarthen
Barry
Haverfordwest
Swansea – Llansamlet
Swansea – Cwmdu
Flint
Rhyl
Bangor
North
Carlisle
Penrith
Workington
Stockton
Newcastle upon Tyne
Durham
Darlington
York
York Clifton Moor
Harrogate
Scarborough
Wakefield
Pontefract
Gateshead
Widnes
St Helens
Bolton
Blackburn
Morecambe
Barrow
Preston
Cleveleys
Chorley
Ormskirk
Blackpool Marton
Chester
Warrington
Birkenhead
Wigan
Wigan Clearance
Anfield
Aintree
Manchester – Salford
Manchester –
Audenshaw
Cheadle
Manchester –
Green Quarter
Manchester – Sale
Stockport
Stockport Clearance
Manchester –
Failsworth
Manchester – Hyde
Oldham
Huddersfield
Macclesfield
Leeds
Bradford
Sheffield Hillsborough
Hull*
Stockport*
Wigan*
Liverpool*
Midlands
Worksop
Hull
Hull Clearance
Grimsby
Rotherham
Meadowhall
Barnsley
Doncaster
Doncaster Sprotborough
Congleton
Northwich
Lincoln
Newark
Boston
Mansfield
Grantham
Spalding
Lincoln Outer Circle
Chesterfield
Nottingham –
Lady Bay
Nottingham –
Castle Park
Long eaton
Derby Osmaston
Derby
Telford
Shrewsbury
Newcastle-Under-Lyme
Leek
Nantwich
Crewe
Cannock
Stoke on Trent – Fenton
Stoke Clearance
Birmingham –
Great Barr
Birmingham – Solihull
Wolverhampton
Wolverhampton
Clearance
Birmingham –
erdington
Birmingham – Sheldon
West Bromwich
Tamworth
Burton on Trent
Lichfield
Coventry
Coventry – Binley
Stratford Upon Avon
Nuneaton Topps
Redditch
Kidderminster
Kings Heath
Rugby
Leicester
Leicester – Grove Park
Kettering
Loughborough
Cheltenham*
Stoke On Trent*
Wolverhampton*
Kettering*
London
Chingford
edmonton
Stamford Hill
enfield
Waltham Cross
Shoreditch
Southall
Staples Corner
New Southgate
New Southgate
Clearance
Colindale
Wembley
Hayes
Uxbridge
Golders Green
North Finchley
Ruislip
Westfields
Harrow
Acton
Ilford
Beckton
Mile end Topps
Wapping
Barking Topps
Ilford Seven Kings
Dartford Topps
Charlton
Penge
West Wickham
Beckenham Topps
Orpington
Orpington Clearance
Catford
eltham
Bromley Common
Mitcham
Forest Hill
Old Kent Road
Feltham
Croydon
Croydon Purley Way
Gunnersbury
Brentford
Highgate
Vauxhall
Twickenham
Fulham
Wandsworth
east Sheen
Maida Vale
Streatham
Battersea
Wimbledon
Dagenham
Romford
Raynes Park
Cheam
St Albans
Hemel Hempstead
Chesham
Borehamwood
Park Royal
Willesden
Hounslow
Surbiton
Richmond*
Orpington*
New Southgate*
Park Royal*
Scotland and
Northern Ireland
Glasgow – Hillington
Wishaw
Glasgow – Greenock
Glasgow
Glasgow – Shawfield
edinburgh – Leith
Aberdeen
Inverness
Dundee
edinburgh – Sighthill
Aberdeen –
Bridge of Don
edinburgh – Kinnaird
Glasgow – Govan
Dumfries
Ayr
elgin
Belfast Newtonabbey
South
Kings Lynn
Wisbech
Peterborough –
Boongate
Peterborough –
Rex Centre
Stamford
Chelmsford
Colchester
Sudbury
Braintree
Clacton on Sea
Chelmsford Springfield
Harlow
Harlow Clearance
Bishops Stortford
Norwich Mile Cross
Norwich Hall Road
Ipswich Martlesham
Ipswich
Norwich
Cambridge
Great Yarmouth
Bury St edmunds
Thetford
Cromer
Lowestoft
Bristol
Swindon
Swindon Clearance
Hengrove
Frome
Bristol – Clevedon
Chippenham
Gloucester
Cheltenham
Worcester
evesham
Hereford
Cirencester
Northampton –
Orbital Park
Northampton –
Nene Valley
Portsmouth
High Wycombe
Fareham
Isle Of Wight
Basingstoke
Winchester
Reading
Newbury
Southampton – Millbrook
Southampton – Hedgend
Oxford – Cowley
Oxford – Abingdon
Oxford – Botley
Witney
Banbury
Bicester
Buckingham
Brentwood
Crayford
erith
Southend
Basildon
Rayleigh
Grays
Sevenoaks
Bexhill
Maidstone
Sittingbourne
Tunbridge Wells
Strood
Broadstairs
Tonbridge
Canterbury
Folkestone
Ashford
Guildford
Farnborough
Farnham
Camberley
Byfleet
Brighton
Gatwick
Horsham
Uckfield
Newhaven
east Molesey
Chichester
Lewes
Bognor Regis
Windsor
Slough
eastbourne
eastbourne Clearance
Bournemouth Topps
Bridgewater
Weston Super Mare
Salisbury
Christchurch
Poole
Bristol – Cribbs
Causeway
Yeovil
exeter
exeter Clearance
Torquay
Barnstaple
Plymouth
Plymouth Clearance
Taunton
Launceston
exmouth
Bodmin
*Brand swapped store
96
Plc
Annual Report and Financial Statements 2013
AdditionAl informAtion StRAteGic RePoRt
| StoRe locAtionS
17
55
66
47
15
128
Stores operated by the
Group in scoTland and
norThern ireland
Stores operated by the
Group in midlands
Stores operated by the
Group in london
Stores operated by the
Group in norTh
Stores operated by the
Group in wales
Stores operated by the
Group in souTh
scotland
north
Midlands
Wales
london
south
designed and produced
by radley yeldar www.ry.com
toPPS tileS – StoRe numbeRS
Stores at the beginning of the period
new stores opened
sub-total
closures (including brand swaps)
Total
325
18
343
–15
328
P
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2
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3
50 years of success, 328 stores and still growing
2013
Topps Tiles
celebrates its 50th
year anniversary.
2011
topps tiles open a
brand new 50,000 sq. ft.
warehouse to fulfill online
orders and expand their
product range.
2007
matt Williams is appointed our new
ceo. topps tiles sponsors leicester city
Football club. We launch our Youth
Sponsorship programme.
2002
We launch our own radio
station - Topps FM - and our
first national TV campaign.
2010
We launch our How-To DVD
and online tile visualiser
We sponsor the ITV Weather.
2003
We win PLC of the Year
award.
1995
tile Kingdom buys and
becomes topps tiles,
meaning 40 stores
across the uK.
Topps Tiles Plc
thorpe Way, Grove Park, enderby,
leicestershire le19 1Su
T 0116 282 8000
F 0116 282 8115
www.toppstiles.co.uk
1963
the first topps tiles is
opened in manchester,
owned by ted derbyshire.