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Annual Report
and Accounts
for the 52 week period ended 30 September 2017
Stock Code: TPT
25632.02 13 December 2017 11:33 AM Proof 8
25632.02 13 December 2017 11:33 AM Proof 8
Welcome
Topps Tiles is the UK’s leading tile specialist. Our core
business is focused on the domestic tile market and,
specifically, refurbishment of residential homes. We provide
an industry leading range of tiles and associated accessories
to this market. Our customer base includes both homeowners
(predominantly retail customers) and tile fitters (trade
customers) and our business is based on a broadly even split
between the two customer types. Our colleagues are a key
ingredient of our business model – our customers rely on our
expert product knowledge and world-class customer service.
We have also announced our desire to participate in the
commercial tile market. We are at the very start of our
journey to develop a meaningful presence in this significant
part of the overall UK tile market. We have completed a
small acquisition during the year and 2018 will be a year
of learning and building this new strategically important
business.
OUR STRATEGY
Our core business strategy of “Out-specialising the
Specialists” remains very much at the heart of what we do. It
is built on the foundation of ensuring we have Great People
and provide them with an environment in which they can thrive
and help us to sustain a Great Company.
Our key areas of strategic focus are having the UK's
Leading Range, providing our customers with an
Inspirational Experience and being the Traders’
Champion.
READ MORE
Read Our Strategy on pages 12 to 16
OUR STORES
Topps Tiles has over 372
stores across the UK with
a broad geographic reach
which means most customers
require less than a 20
minute drive time to reach
their local store.
17
2
55
READ MORE
See our full store list on page 141
17
52
81
148
PICTURED
Cover: KinectTM Stonewash Blue and Larvik
IFC: IndustriaTM, engineered stone metal
effect, wall mosaic
25632.02 13 December 2017 11:33 AM Proof 8
25632.02 13 December 2017 11:33 AM Proof 8
OVERVIEW
CONTENTS
BUSINESS MODEL
We offer our customers outstanding
value for money through exceptional
customer service, an up-to-date market
leading product range and unrivalled
multi-channel convenience.
READ MORE
Pages 10 and 11
CONTENTS
Highlights
Chairman’s Statement
Strategic Report
Marketplace
Business Model
Our Strategy
OUR STRATEGY
The business has an overarching goal to
achieve profitable sales growth. During
the period we conducted our annual
refresh of strategy and have now included
a more explicit focus on the commercial
tile market in our future growth plans.
READ MORE
Pages 12 to 16
KEY PERFORMANCE
INDICATORS
The Board monitors a number of
financial and non-financial metrics
and KPIs both for the Group and by
individual store.
READ MORE
Page 26
INVESTOR WEBSITE
We maintain an investors' website containing a wide
range of information to investors
www.toppstilesplc.com
Leading Range
Inspirational Experience
Traders' Champion
Great People, Great Company
Strategy in Action
Key Performance Indicators
Financial Review
Risks and Uncertainties
Corporate Social Responsibility
Our Governance
Board of Directors
Corporate Governance Statement
Directors’ Report
Directors’ Remuneration Report
Our Financials
Independent Auditor's Report
Consolidated Statement of
Financial Performance
Consolidated Statement of
Comprehensive Income
Consolidated Statement of
Financial Position
Consolidated Statement of
Changes in Equity
Consolidated Cash Flow Statement
Notes to the Financial Statements
Company Balance Sheet
Notes to the Company Financial
Statements
Additional Information
Five Year Record
Notice of Annual General Meeting
Explanatory Notes to the Notice of
Annual General Meeting
Summary of the principal features
of the Topps Tiles 2018 Sharesave
Scheme ("Sharesave Scheme")
The Team
Store Locations
2
4
8
10
12
13
14
15
16
18
26
27
33
37
44
46
50
54
74
80
80
81
82
83
84
112
113
118
119
124
127
129
141
1
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Topps Tiles Plc Annual Report and Accounts for the 52 week period ended 30 September 2017
Highlights
GROUP
REVENUE (£m)
-1.5%
LIKE-FOR-LIKE REVENUE
GROWTH YEAR-ON-YEAR1 (%)
-2.9%
GROSS
MARGIN (%)
-80bps
212.2
215.0
211.8
195.2
8.1
60.9
61.2
61.9
61.1
5.4
4.2
(2.9)
ADJUSTED PROFIT
BEFORE TAX2 (£m)
-15.5%
22.0
20.4
18.6
17.1
2014
2015
2016
2017
2014
2015
2016
2017
2014
2015
2016
2017
2014
2015
2016
2017
PROFIT
BEFORE TAX (£m)
-15.0%
20.0
ADJUSTED EARNINGS
PER SHARE3 (p)
-13.9%
BASIC EARNINGS
PER SHARE (p)
-13.3%
16.7
17.0
17.0
8.86
8.17
7.63
8.05
6.98
FINAL
DIVIDEND (p)
-8.0%
2.25
2.50
2.30
6.63
6.49
6.75
1.60
2014
2015
2016
2017
2014
2015
2016
2017
2014
2015
2016
2017
2014
2015
2016
2017
TOTAL
DIVIDEND (p)
-2.9%
3.00
2.25
CASH GENERATED
FROM OPERATIONS (£m)
-7.7m
29.9
3.50
3.40
24.9
24.2
22.2
NET
DEBT4 (£m)
+2.7m
30.5
28.4
27.5
24.8
2014
2015
2016
2017
2014
2015
2016
2017
2014
2015
2016
2017
2
25632.02 13 December 2017 11:33 AM Proof6
OVERVIEW
HIGHLIGHTS
FINANCIAL PERFORMANCE
• Sales of £211.8 million (2016: £215.0 million).
Like-for-like sales decline of 2.9% (2016: +4.2%)
• Gross margin decreased to 61.1% (2016: 61.9%) reflecting
pressure of weaker sterling which was partly offset by underlying
sourcing gains and our focus on a differentiated product offer
• Adjusted profit before tax2 of £18.6 million, a decrease
of 15.5%
• Final dividend of 2.30 pence per share (2016: 2.50 pence
per share), making a total for the year of 3.40 pence per share
(2016: 3.50 pence per share)
• Net debt4 at period end increased to £27.5 million
(2016: £24.8 million)
STRATEGY UPDATE
• Core business strategy of "Out-specialising the Specialists"
remains key focus in the domestic tile market, where Topps Tiles
is market leader
• Growth strategy expanded into the commercial segment of the
UK tile market (c. 45% of total UK tile market)
• Parkside Ceramics, a small business which specialises in the
supply of tiles into the commercial segment acquired during the
period for £1.1 million
• Parkside to form the basis of a new Commercial division – plans
in place to invest c.£1 million in the year ahead into capabilities
to drive longer term growth
OPERATIONAL PERFORMANCE
• Trade participation increased to 55% of total sales (2016: 52%)
driven by growth of the trade loyalty programme and trend for
"Do It For Me"
• Digitisation of "Rewards +" trade loyalty programme, enhancing
offer to trade customer base – 55,000 traders now registered
and spending, a 35% increase
• Sales continuing to benefit from new product development –
9.2% of tile revenues generated from ranges launched in the last
12 months (2016: 12.6%)
• Active management of store portfolio – 26 new openings
and five closures in the period, resulting in a net 21 new stores.
Between five and 10 net new openings expected in current
financial year.
READ MORE
Read the Financial Review on pages 27 to 32
CURRENT TRADING AND OUTLOOK
• The Group is now trading from 372 stores (2016: 352 stores)
• In the first eight weeks of the new financial period, Group
revenues, stated on a like-for-like basis, increased by 3.2%
(2016: decrease of 0.3%)
Commenting on the results, Matthew Williams, Chief Executive
said: "The business responded well to the more challenging trading
conditions we experienced in 2017, maintaining tight control of
costs to help offset the reduction in gross margin and continuing to
make good progress with its strategic initiatives.
“Trading in the first eight weeks of the new financial year has
improved, with like-for-like sales increasing by 3.2%. While we
are retaining our prudent view of market conditions for the year
ahead, we are encouraged by this return to like-for-like sales
growth. We are confident that the combination of the significant
further potential in our strategy of 'Out-specialising the Specialists'
with our accelerated plan to grow in the commercial tile market
will underpin our future success.”
NOTES
1.
Like-for-like revenues are defined as sales from online and stores that have been
trading for more than 52 weeks.
2. Adjusted profit before tax excludes several items that we have incurred during the
period in order to give users of the accounts improved information around
underlying performance trends. These are items which are either one-off in nature
or can fluctuate significantly from year to year (such as some property related
items). These are set out as follows:
Adjusted pre-tax profit
Vacant property costs
Costs related to acquisition during the period
Impairment of plant, property and equipment
Gains or losses on disposal of freehold of
long leasehold properties
Stock write-off relating to wood category exit
Restructuring costs including transitional
costs relating to prior year business
simplification initiatives
Statutory pre-tax profit
2017
£m
2016
£m
18.6 22.0
(0.4)
(0.2)
(1.2)
0.2
nil
(0.3)
nil
(0.8)
nil
(0.5)
nil
(0.4)
17.0 20.0
3. Adjusted for the post tax effect of the items highlighted above.
4. Net debt is defined as loan facilities drawn down less cash and cash
equivalents.
25632.02 13 December 2017 11:33 AM Proof6
3
Topps Tiles Plc Annual Report and Accounts for the 52 week period ended 30 September 2017 Topps Tiles Plc Annual Report and Accounts for the 52 week period ended 30 September 2017
Chairman’s Statement
DARREN SHAPLAND | CHAIRMAN
In this new financial year we
are accelerating our plans to
grow in the commercial tile
market and are excited about
the opportunity this presents.
The Board remains confident
that this focus on building on the
Group’s strong existing position
within the UK tile market will
be the foundation of our future
success."
INTRODUCTION
A warm welcome to the Topps Tiles
2017 Annual Report. This year has
delivered some challenging trading
conditions for the business but I
am pleased to report that we have
responded well and continued to
deliver good progress under our “Out-
specialising the Specialists” strategy.
We have delivered a number of
important new strategic initiatives which
are detailed throughout the pages of this
report and, having conducted our annual
refresh of strategy, we have confirmed
our ambition to grow in the commercial
side of the UK tile market.
PICTURED
KinectTM, Stonewash Blue, ceramic,
wall & floor tile
4
25632.02 13 December 2017 11:33 AM Proof6
Heading One OVERVIEW
CHAIRMAN’S STATEMENT
TRADING AND FINANCIAL
PERFORMANCE
The market has been more challenging
this year and, whilst I am satisfied with
how the business has responded, we have
ultimately seen some impact on our financial
performance. This has comprised two
main factors – weakened demand, which
is linked predominantly to lower levels of
consumer confidence, and lower gross
margins resulting from the depreciation of
sterling which has resulted in increased
product sourcing costs.
We have delivered sales for the year of
£211.8 million (2016: £215.0 million)
and an adjusted profit before tax of £18.6
million (2016: £22.0 million).
CAPITAL STRUCTURE
AND DIVIDEND
We have previously stated our ambition to
migrate to a dividend policy of two times
cover and we have continued to progress
towards that target this year with a further
increase in the ratio of profits we remit to
shareholders.
We anticipate achieving our goal by the
end of the next financial year and the
Board considers that, once achieved, a
dividend which is approximately two times
covered by earnings should be sustainable.
As a result, the Board is recommending a
final dividend for the year of 2.30 pence
per share (2016: 2.50 pence per share).
This will bring the total dividend for the year
to 3.40 pence per share (2016: 3.50
pence per share). As a consequence of
this recommendation dividend cover for the
year is 2.25x (2016: 2.50x).
GOAL AND STRATEGY
Our overarching business goal is to drive
profitable sales growth. Within our core
Topps Tiles business, we are focused on
the domestic tile market where we are the
clear market leader. Our strategy of “Out-
specialising the Specialists” continues to
serve us well in this market and remains key
for driving long-term profitable growth. This
year, we have been explicit about our plans
to expand into the commercial tile market.
We made a small acquisition during
the year and are planning for further
investments in the year ahead which will
allow us to grow a much stronger position
in this attractive market.
More detail on the Company’s strategy
and the effectiveness with which it is being
delivered can be found on the following
pages.
THE BOARD AND
CORPORATE GOVERNANCE
The Board of Topps Tiles is focused on
good governance and we have further
improved our disciplines on several fronts
over the year. We have seen some positive
improvements within the Audit Committee
agenda, where we have strengthened
our internal controls and have further
improved internal reporting to ensure good
transparency for Board members.
In line with last year I am pleased to
confirm that all Non-Executive Directors are
independent and the Board is compliant
with the Corporate Governance code from
this perspective. We have benefited from
very good stability on the Board with all
Directors having completed at least two
years of service and the combined Board
having 43 years of experience with the
Group in total.
We have continued to assess the
performance of the Board and the
committees, including my own performance
as Chairman. These reviews concluded
that, overall, the Board is operating
effectively and there are some further minor
improvements that we will implement in the
year ahead.
OUR PEOPLE
As a customer service-based business, our
people are at the heart of our organisation
and this is a key aspect of Topps Tiles
success. Our customer service metrics are
excellent and we benefit from extensive
training and development programmes and
clear and open communication across the
business. On behalf of the Board I would
like to extend my sincere thanks to all
colleagues for their hard work, commitment
and dedication.
THE FUTURE FOR TOPPS TILES
In our core domestic market, Topps Tiles’
strategy of “Out-specialising the Specialists”
remains very much at the heart of what we
do and the management team will continue
to evolve the key strands of this strategy
to maximise the opportunities to drive
performance. In this new financial year
we are accelerating our plans to grow in
the commercial tile market and are excited
about the opportunity this presents.
The Board remains confident that this focus
on building on the Group’s strong existing
position within the UK tile market will be the
foundation of our future success.
DARREN SHAPLAND | CHAIRMAN
READ MORE
Read Strategy in Action on pages 18 to 24
25632.02 13 December 2017 11:33 AM Proof6
5
STRATEGIC REPORTPAGE HEADING | PAGE HEADING Topps Tiles Plc Annual Report and Accounts for the 52 week period ended 30 September 2017 Topps Tiles Plc Annual Report and Accounts for the 52 week period ended 30 September 2017
Strategic Report
6
25632.02 13 December 2017 11:33 AM Proof6
Heading One STRATEGIC REPORT
The content of this Strategic Report
meets the content requirements of the
Strategic Report as set out in s414a of
the Companies Act 2006. This Strategic
Report 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.
CONTENTS
Marketplace
Business Model
Our Strategy
Leading Range
Inspirational Experience
Traders' Champion
Great People, Great Company
Strategy in Action
Key Performance Indicators
Financial Review
Risks and Uncertainties
Corporate Social Responsibility
PICTURED
Regional ReflectionsTM Dwyran and
Diamante Pastels Bone and Mist
25632.02 13 December 2017 11:33 AM Proof6
8
10
12
13
14
15
16
18
26
27
33
37
7
Topps Tiles Plc Annual Report and Accounts for the 52 week period ended 30 September 2017 Marketplace
THE UK TILE MARKET
AND PERFORMANCE
OF THE BUSINESS
Topps Tiles is the largest tile specialist in
the UK. Our primary focus is the domestic
market for the renovation, maintenance
and improvement of UK homes.
Due to the highly discretionary nature of
our market, consumer confidence remains
a key driver of our performance. During
2017 the average level of consumer
confidence was -7.3, which compares with
-1.3 in 2016. Whilst the index has been
negative across the whole year, the second
half saw a modest deterioration where the
average level of consumer confidence was
-8.8, compared with -5.8 over the first half
(source: GFK). The consumer confidence
index has remained negative since the EU
referendum result in June 2016 and we will
continue to monitor this measure closely.
A further key driver of the customer decision
to take on a home improvement project is
buying a new home. Housing transactions
are therefore a very useful indicator of
likely future demand. During this financial
year housing transactions declined by
around 5% to 1.2m. In part, this decline
is a reversal of the growth spike in March
2016 ahead of the changes in stamp duty
that occurred in April 2016. On a two-year
basis housing transactions are broadly flat
(source: HMRC).
We also consider UK house price data to
be a useful indicator of the relative health of
our market. House prices are both a good
reflection of the housing market itself and
also tend to reflect consumer confidence,
as homeowners tend to feel more affluent
in a rising market. During the year we
saw an increase in house prices, with the
average price of a house in the UK rising
to £210,116, an increase of 2.0% on the
previous year (source: Nationwide).
READ MORE
Read our KPIs on page 26
The annual Tile Industry Report published by MBD covers the whole of the UK tile market
(domestic and commercial) and is based on manufacturer and supplier data. Growth of
the entire market in 2016 was 7.8% on a value basis and 4.4% on a volume basis. MBD
have estimated that volume growth in 2017 will be 4% and our view is that this growth will
have been driven by the commercial side of the UK tile market (note – MBD do not provide
a value forecast growth estimate).
UK HOUSE PRICES AND CONSUMER CONFIDENCE
Consumer confidence (3-month average)
House price (nationwide)
)
e
g
a
r
e
v
a
h
t
n
o
m
-
3
(
e
c
n
e
d
i
f
n
o
c
r
e
m
u
s
n
o
C
20
10
0
-10
-20
-30
-40
2
1
0
2
t
c
O
3
1
0
2
n
a
J
.
3
1
0
2
r
p
A
3
1
0
2
l
u
J
3
1
0
2
t
c
O
4
1
0
2
n
a
J
4
1
0
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r
p
A
4
1
0
2
l
u
J
4
1
0
2
t
c
O
5
1
0
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n
a
J
5
1
0
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p
A
i
)
e
d
w
n
o
i
t
a
n
(
s
e
c
i
r
p
e
s
u
o
h
K
U
220,000
200,000
180,000
160,000
140,000
120,000
100,000
7
1
0
2
t
c
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6
1
0
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t
c
O
7
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n
a
J
7
1
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5
1
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t
c
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6
1
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6
1
0
2
r
p
A
6
1
0
2
l
u
J
5
1
0
2
l
u
J
Source: Consumer confidence = GFK, UK house price = Nationwide
8
25632.02 13 December 2017 11:33 AM Proof6
Topps Tiles Plc Annual Report and Accounts for the 52 week period ended 30 September 2017
Topps Tiles Plc Annual Report and Accounts for the 52 week period ended 30 September 2017
STRATEGIC REPORT
MARKETPLACE
UK 12-MONTH HOUSING TRANSACTIONS – HMRC
)
s
0
0
0
(
s
n
o
i
t
c
a
s
n
a
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g
n
i
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t
n
o
m
-
2
1
1600
1500
1400
1300
1200
1100
1000
900
800
700
600
2
1
0
2
t
c
O
3
1
0
2
n
a
J
.
3
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5
1
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5
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A
7
1
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u
J
7
1
0
2
t
c
O
PICTURED
Source: Housing transactions = HMRC
UK TILE MARKET – DOMESTIC VS COMMERCIAL
UK tile market estimated at c. £700m @ RSP*
Commercial c.45% (Principally catering for architects and designers)
Domestic c.55% (Refurbishment of residential properties)
45% Commercial
ial
c
r
e
m
m
o
C
*Source: MBD and Company estimates
18% Topps Tiles
17% DIY Sheds
16% Other specialists
D
o
m
e
s
t
ic
4% Other
Left page: Busca Bronze Flat, Spaces
Carnelle Walnut
Top left: GrosvenorTM ceramic wall
and floor tile
Top right: IndasTM Rust porcelain wall
and floor tile
Bottom left: BurbankTM Peppermint
Geometric ceramic wall tile
Bottom right: Minton Hollins
Honeysuckle ceramic wall tile
Bottom page left: Busca Silver Flat, Foundry
Tarnish Box
Bottom page right: Attingham Earth Lagoon
and Macrame Flint
25632.02 13 December 2017 11:33 AM Proof6
9
STRATEGIC REPORTPAGE HEADING | PAGE HEADING
Business Model
Topps Tiles is the leading specialist retailer
of tiles in the UK. We supply tiles and
associated products to both a trade and
retail customer base, primarily for the
refurbishment of UK domestic housing.
SOURCING
We source our products directly from
manufacturers all around the world and
focus on long-term strategic relationships with
our suppliers. Products are delivered to our
150,000 sq ft warehouse in Leicester and
from there all stores receive two deliveries
per week through our fleet of 28 commercial
vehicles. In addition, each store operates as
a mini warehouse, carrying sufficient stock
to ensure that our customers' immediate
demands can be fulfilled on a “cash and
carry” basis.
PRODUCT INNOVATION
We inspire our customers with a market
leading product range which is mostly
available on an exclusive basis.
We achieve both of these aspects by
working collaboratively with our key
suppliers to develop new ranges; with
Topps Tiles providing the customer insight
into emerging trends and the supplier
providing the technical knowledge and
capability. Technology is an important
aspect of modern tile production with
innovations such as digital printing and new
glaze technologies allowing a much greater
variety of patterns and finishes. Over recent
years Topps Tiles has led many innovations
in the market including the development
of natural stone and wood effect tile
ranges which continue to be a major trend
in the UK.
STORE FORMATS
CONSUMER WEBSITE
CHANNELS
We aim to provide maximum convenience
for our customers by offering a truly
seamless journey across all of our channels
to market.
Stores remain our primary channel to market
and driven by the almost unique nature of
the tile market we estimate that almost all
of our customers will utilise a store at some
point during their purchase. We operate
372 stores across the UK with an average
footprint of 5,000 sq ft. However, the
flexibility in our model enables us to trade
successfully from 1,000 sq ft up to 10,000
sq ft. This means we can be found in a
variety of locations including high streets,
retail parks, trade parks and on main
arterial roads en route to larger shopping
destinations.
Our store portfolio operates predominantly
on a leased basis with an average
unexpired lease term of six years.
CORE (3,500+ SQ FT)
SMALL (2,000-3,500+ SQ FT)
BOUTIQUE (< 2,000 SQ FT)
10
25632.02 13 December 2017 11:33 AM Proof6
Topps Tiles Plc Annual Report and Accounts for the 52 week period ended 30 September 2017 Topps Tiles Plc Annual Report and Accounts for the 52 week period ended 30 September 2017
STRATEGIC REPORT
BUSINESS MODEL
Customers are also increasingly choosing
to use our online presence to conduct initial
research into their projects or to maximise
convenience by using this as a payment
channel. We estimate that around 70% of
our customers will use our website at some
stage in their journey with us.
Additionally, 55% of our sales are to trade
customers but they are rarely the end
consumer – that is usually the homeowner.
In some cases we may not have a direct
relationship with the homeowner which
is why our relationship with our trade
customers is very important to us. These
relationships are built on a basis of our
specialist credentials; providing excellent
technical knowledge and a range of
specialist products which ensure we cater
for all of our traders’ needs.
PEOPLE
At our heart we are a service-based
business and as a result our people are one
of our most important assets. We aim to
provide our customers with inspiration and
advice on their home improvement projects
and to do this successfully we ensure that
we have teams of people in our stores that
can engage with our customers and truly
inspire them. Technical knowledge and a
strong service ethic are paramount and
we invest significant amounts of time and
money in our people every year.
BRAND
Topps Tiles is the UK’s leading tile specialist
retailer and now has 85% prompted
awareness with consumers who have
recently purchased or who are about to
purchase tiles. Topps Tiles’ focus is on
driving consideration with the tile decision
makers and building this results in increased
sales from both home-improvers and traders.
Our customers tell us they want inspirational
service at all points of contact and quality
“on-trend” products at a range of price
levels they can buy conveniently.
Topps Tiles has gained brand reappraisal
and greater consideration by a wider
customer base in recent years by being
seen as more modern and design-led whilst
retaining a strong perception of value for
money.
VALUE FOR CUSTOMERS
We offer our customers outstanding value
for money through exceptional customer
service, an up-to-date market leading
product range and unrivalled multi-channel
convenience. Topps Tiles successfully
combines the added value aspects of its
offer with competitive pricing led by an
“unbeatable tile value” range, market
leading promotions and competitive trade
pricing on items like adhesives and grouts.
The Topps Tiles model continues to evolve
and our strategy seeks to capitalise on
the aspects where we consider we can
maximise the potential to deliver our goal.
PICTURED
AntlerTM ceramic wall tile with DartreyTM
Black porcelain wall and floor tile
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Our Strategy
The business responded well to the more challenging trading
conditions we experienced in 2017, maintaining tight control
of costs to help offset the reduction in gross margin and
continuing to make good progress with its strategic initiatives.
We are confident that the combination of the significant
further potential in our strategy of "Out-specialising the
Specialists" with our accelerated plan to grow in the
commercial tile market will underpin our future success."
MATTHEW WILLIAMS |
CHIEF EXECUTIVE OFFICER
The business has an overarching goal to
achieve profitable sales growth. During the
period we conducted our annual refresh
of strategy and have now included a more
explicit focus on the commercial tile market
in our future growth plans.
COMMERCIAL
The commercial tile market represents
approximately 45% of the overall UK tile
market and we have a small representation
currently through our core business. We
have identified that there are areas of the
commercial market that are economically
attractive and where we consider that
some of our core strengths can be further
leveraged, providing a potential source of
profitable growth for the business.
PROGRESS AND OUTLOOK
We have identified several routes of entry
into the commercial market and during the
period we completed the acquisition of
Parkside Ceramics Ltd for £1.1 million
in cash. Parkside Ceramics is a small
business which specialises in the supply
of tiles into the commercial segment and
also distributes to independent kitchen and
bathroom retailers.
We believe that Parkside gives us a
solid platform from which to invest in and
develop our presence in the commercial
tile market.
2018 will be a year of learning and
building this business. Parkside shows
significant potential and we are keen to
expand with investment in people, physical
representation and capability, to establish
a new Commercial division. In the year
ahead we plan to invest in the region of
£1 million into costs which will drive longer
term growth. We will also focus further on
the opportunities that emerge through our
core brand and believe this offers further
significant potential as we learn more about
the commercial market. We remain open to
further growth through acquisition and will
continue to review such opportunities
as they arise.
PROFITABLE
SALES GROWTH
STRATEGIC PILLARS
Leading
Range
Inspirational
Experience
Traders'
Champion
Great People, Great Company
CORE BUSINESS
Within the core Topps Tiles business our
strategy of "Out-specialising the Specialists"
continues to be very effective. This strategy
is focused on the following four key areas:
1.
2.
3.
Leading Range
Inspirational Experience
Traders’ Champion
4. Great People, Great Company
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Topps Tiles Plc Annual Report and Accounts for the 52 week period ended 30 September 2017 STRATEGIC REPORT
OUR STRATEGY
Leading
Range
Offering the UK’s leading tile range is a
key aspect of our competitive advantage
as our customers value highly the breadth
of choice and unique product offering we
bring to the market. Our passion for product
and specialist knowledge means we are
able to work collaboratively with leading
manufacturers from all over the world to
design and create new tile ranges and
finishing solutions based on emerging trends
that our buyers are often the first to identify.
These ranges are sourced on an exclusive
basis wherever possible and we trademark
them to protect our competitive advantage
and intellectual property.
PROGRESS AND OUTLOOK
Our iterative cycle of new product
introductions saw us launch 45 new ranges
in the period, with 9.2% of our tiles sales
coming from products launched in the
last 12 months.87% of our tile range is
exclusive to Topps Tiles in the UK.
We will continue to invest in relationships
around the world with the key influencers of
tile design and manufacturing technology in
order to foster the development of exciting
new industry-leading exclusive ranges of
tiles and associated products.
Our increased focus on the commercial tile
market will also create new opportunities
– such as selling our existing ranges to
commercial customers and establishing new
manufacturer relationships.
PICTURED
AlbusTM porcelain wall and floor tile
WHAT OUR
CUSTOMERS
ARE SAYING
What a superbly refitted store this is now.
The CHOICE of tiles and ranges on offer
are amazing and covers literally every
conceivable option. The guys are as friendly,
knowledgeable and helpful as ever. We've
been buying tiles from here on and off over
about 20 years now but this is the best
the store and service has ever been. TOP
MARKS. It gets our highest recommend.
AND . . . you can confidently over order on
your tiles because you can return any surplus
(complete boxes) for a refund. Can't say
fairer than that. FIRST CLASS.”
PATTERJAX | READING
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13
Topps Tiles Plc Annual Report and Accounts for the 52 week period ended 30 September 2017 Inspirational
Experience
WHAT OUR
CUSTOMERS
ARE SAYING
From the moment we entered your showroom
we were warmly greeted by staff who displayed
a genuine concern for our requirements. After
choosing, we placed our order and were phoned
when they arrived. I over-ordered and it was no
problem taking the surplus back and crediting my
account. What an absolute pleasure to deal with
such courteous and professional staff.”
MIKE | CHEADLE
PICTURED
Customers in store using an iPad
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25632.02 13 December 2017 11:33 AM Proof6
Inspiring our customers has always been
key to our competitive advantage. This starts
when customers come into contact with
the Topps Tiles brand, often through our
website, and moves through to the in-store
experience and ultimately to our after sales
service. Our website is a vital aspect of the
customer journey, offering us the opportunity
to showcase our industry-leading range,
and helping customers to appreciate our
multi-channel convenience and the location
of their nearest store. Once in store we
are able to inspire customers further with
our world-class service. The majority of our
customers shop infrequently for tiles which
means that when they do they need lots
of advice and expertise, which our store
colleagues provide, often supported by our
digital tools.
PROGRESS AND OUTLOOK
We strive to ensure that the digital
experience is seamless when a customer
transitions from online to in-store. Our tile
visualiser is industry leading and a key
source of inspiration for our customers,
and is available in all stores via tablets
and “Design Advice Areas”. Our customer
service rating for the year was 80.2%
(2016: 79.7%). We have continued to
invest in our store estate and during the
year we opened 26 new stores and closed
five, resulting in a net increase of 21 and
bringing the year end total to 372 (2016:
351). In the year ahead we will continue
to grow our store estate in a highly targeted
manner and expect to open between five
and 10 net new stores. We also plan to
deliver an all-store improvement programme
over the next two years which will see us
implement some key aspects of the latest
store fit out into all existing stores.
Topps Tiles Plc Annual Report and Accounts for the 52 week period ended 30 September 2017 Traders'
Champion
Our trade customer base is an important
part of our business, providing a vital
link to those homeowners who prefer to
transact through their fitter rather than
with us direct. The trend in the UK away
from “Do It Yourself” towards “Do It For
Me” is making our trade customer base
increasingly important. Sales through our
trade channel account for 55% of total
sales (2016: 52%). By embracing our trade
customers and championing their needs we
believe we are building a further source of
competitive advantage.
PROGRESS AND OUTLOOK
We relaunched our trader loyalty
programme at the start of the year and this
has been very well received by scheme
members. We have improved the system
in several ways including digitisation, ease
of use, the range of rewards available and
interaction with store teams. We now have
55,000 traders registered, an increase of
35% year on year. We continue to focus
on the needs of our traders from a customer
offer perspective and have introduced
several new products and services this
year which have broadened our overall
appeal and made us more convenient for
our traders.
STRATEGIC REPORT
OUR STRATEGY
PICTURED
Shopping with store manager Roxanne
WHAT OUR
CUSTOMERS
ARE SAYING
From start to finish service was excellent, I took
a sample home and was sent pictures and my
own personal brochure which was a nice touch.
Because of work commitments I couldn’t get in
for a couple of weeks and I was phoned to make
sure I received my pictures and asked if I required
any further assistance. The level of service
persuaded me to purchase from Topps as I was
also looking elsewhere but felt more confidence
with Topps' process.”
GINA | WARRINGTON
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15
Topps Tiles Plc Annual Report and Accounts for the 52 week period ended 30 September 2017 Great People,
Great Company
Topps Tiles offers high levels of customer
service and this means we are very focused
on our colleagues who deliver this service,
with their capability and engagement
levels being absolutely key. We believe
our people represent a major source of
competitive advantage and through our
great people we strive to continue to build
a great company.
PROGRESS AND OUTLOOK
In January 2017 we launched a refreshed
employer brand which was based on
colleague interviews across the business
and which aimed to identify the reasons
why they loved working for Topps
Tiles. This has been very successful in
improving consideration amongst potential
employees and we have seen a significant
improvement in the quality of applications,
resulting in a substantial reduction in both
time to hire and the overall number of
vacancies year on year.
This year we also implemented a new
Learning Management System, “the
Hub”, which has resulted in a significant
improvement in the learning and
development opportunities that we offer
to all colleagues. This system allows a
modern approach to personal development,
allowing the individual to take control of
their own development in a way that is
convenient for them. We have continued
with our programmes of face-to-face
learning and development and delivered
around 1,500 days of training with a
specific focus on trade and customer
service.
This year, we have launched a programme
of simplification of business processes to
either improve the customer experience or
the colleague experience, but ideally both.
This has delivered some significant results
which we believe will improve colleague
engagement and customer satisfaction, with
the ultimate aims of reducing colleague
turnover and helping us to increase sales.
PICTURED
Top: Store team at Bolton
Top left: 2017 annual conference
Top right: In-store
Bottom: 2017 annual conference product area
WHAT OUR
CUSTOMERS
ARE SAYING
Both Ben and Carly have been exceptional in
their attitude and constant friendly approach
on our many visits to the Weymouth branch
looking at bathroom tiles. Always helpful,
patient and knowledgeable and despite
coming back on numerous occasions we were
always welcomed.“
JAN | WEYMOUTH
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Topps Tiles Plc Annual Report and Accounts for the 52 week period ended 30 September 2017 STRATEGIC REPORT
OUR STRATEGY
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17
Topps Tiles Plc Annual Report and Accounts for the 52 week period ended 30 September 2017 Strategy in Action
Leading Range
Inspired by a backdrop spotted at Maison
& Objet design show in Paris, the Topps
Tiles buying team saw the potential in
developing a crosshatch-design tile range,
featuring directional lines which would
create different patterns dependent on how
the tile was laid.
After close collaboration over a number
of months with a leading manufacturer,
Kinect™ was launched in an initial three
colourways.
The innovation of having directional lines
debossed into the tile enables customers to
create their own geometric statement wall
or floor, enhanced further by collaboration
with a leading essentials manufacturer to
develop the Colour Editions grout range.
Colour Editions offers the three identical
colours as Kinect™, enabling homeowners
to create a truly seamless look in their
homes where the grout is barely visible
against the tile.
One tile design, numerous laying patterns
and a brave new angle on tiling, Kinect™
is exclusive to Topps Tiles and showcases
the Company’s commitment to being market
leaders in innovation and product range.
WHAT OUR
CUSTOMERS
ARE SAYING
I have recently purchased bathroom tiles from
the York store after much deliberation over
what style I wanted. David has been brilliant
with advising what tiles would match the splash
panels we have put up and was able to show
me alternatives he thought would go well.
I have been back and forth several times buying
samples tiles and have always been greeted
warmly by David. His product knowledge is
fantastic and he was able to sort me out with
everything I needed for my husband to put the
tiles up. I didn't have a clue what I needed to
buy, so really valued his advice."
NICOLA | CLIFTON MOOR
PICTURED
Top right: ArtisauTM ceramic wall tile
Bottom right: ThornburyTM ceramic wall and
floor tile and AnyaTM Frost ceramic wall tile
Right: KinectTM Powdered Rose ceramic
wall and floor tile with Albus porcelain wall
and floor tile
18
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Topps Tiles Plc Annual Report and Accounts for the 52 week period ended 30 September 2017 STRATEGIC REPORT
STRATEGY IN ACTION
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19
Topps Tiles Plc Annual Report and Accounts for the 52 week period ended 30 September 2017 Strategy in Action
Inspirational Experience
We also seek to inspire customers in our
design advice areas in store. Almost 25%
of the estate now features this dedicated
consultation area, enabling homeowners
to consider the whole look and feel of
their project, from tiles to trims, underfloor
heating to colour of grout.
The estate has increased by a net 21
to 372 stores, and we continue to invest
in the estate as well as improving all
existing stores.
From our industry-leading online visualiser
to our in-store design advice areas,
inspiring customers is at the heart of what
we do.
Our digital offering starts with our website,
which has been made fully responsive
this year both to increase useability and
accessibility for customers using tablet or
mobile devices. This has seen the number of
orders placed online increase significantly.
Our visualiser is also a key part of the
customer journey, both as part of the in-store
experience and for homeowners browsing
online, enabling them to see their choice of
tiles in a selection of rooms, along with their
chosen colour schemes.
WHAT OUR
CUSTOMERS
ARE SAYING
I visited this store three times: there were
changes of plans, changes of mind and lots of
dithering on my part. On each occasion I was
treated with patience (lots!) and understanding
and received fantastic advice. I received
excellent customer service all round but Sam
deserves an extra special mention. I would
recommend Sam and her colleagues at Neath
to anyone who is thinking about buying tiles.
I will definitely be going back when it's time
to do the kitchen.”
EVIE | NEATH
PICTURED
Top: Using the in-store visualiser
Bottom right: Design consultation with a service specialist
Bottom left: Making a purchase
20
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Topps Tiles Plc Annual Report and Accounts for the 52 week period ended 30 September 2017 STRATEGIC REPORT
STRATEGY IN ACTION
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21
Topps Tiles Plc Annual Report and Accounts for the 52 week period ended 30 September 2017 Strategy in Action
Traders' Champion
With more than half of Topps Tiles’ total
sales coming through trade customers, each
trader has the potential to be an important
and influential brand advocate for our
products and service.
Our Rewards+ trade loyalty programme
was launched at the start of the year as
a fully-digital experience, enabling points
to be added automatically to accounts
and redeemed in exchange for additional
discounts on purchases, or carefully
selected products and gifts ranging from
barbecues to games consoles.
Loyal traders were given the option to allow
our customers to find them via their own
custom Trader Profile on the Topps Tiles
consumer-facing website, enabling them to
showcase images of their work and have
customer reviews on view to thousands of
potential clients.
We also provide have a range of extended
business services such as competitive
discounts on van leases and insurance
services for our traders, via partnerships
with companies including Vanarama and
Simply Business.
We also offer in-store trade initiatives
including launching the “free cuppa” and
click and collect ordering facility, alongside
evening trade roadshow events which
feature product demonstrations, discounted
products and competitions, and externally-
held training courses in conjunction with
major suppliers, to assist traders with their
product knowledge and fixing expertise.
Topps Tiles continues to work with and
for its loyal trader base on initiatives and
services which will fix its position as the
traders’ champion.
WHAT OUR
CUSTOMERS
ARE SAYING
In my search for tiles I visited a number
of different places and I honestly can’t
recommend Topps Tiles and this store in
particular enough. The staff went above and
beyond to help us, in particular Quang, who
had a genuine passion for helping us find
our perfect tile. The store is accessible and
easy to navigate unlike others I tried.“
CHAREH | BAYSWATER BOUTIQUE
PICTURED
One of Topps Tiles' regular trade roadshows,
held in stores to engage with local traders.
22
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Topps Tiles Plc Annual Report and Accounts for the 52 week period ended 30 September 2017 STRATEGIC REPORT
STRATEGY IN ACTION
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23
Topps Tiles Plc Annual Report and Accounts for the 52 week period ended 30 September 2017 Strategy in Action
Great People,
Great Company
From a family, feelgood atmosphere to
pride in working for the UK’s leading tile
specialist, there are many reasons why our
colleagues love working for Topps Tiles.
As a retailer we believe that our great
people create our great company, leading
to our excellent customer service from
colleagues who are engaged, involved and
care about their role within the business.
Our new Employer Brand with dedicated
jobs website showcases why colleagues
love working for Topps Tiles, and as a
business we also believe in their own
personal development.
Topps Tiles took the award for Most
Engaged Workforce from The Hub creators
Growth Engineering in 2017, as a result
of the high levels of engagement for the
learning management system.
Although originally launched as a
learning management system, The Hub
is also becoming increasingly used as a
social media-styled communication tool,
featuring messages and blogs from the
Chief Executive, praise from colleagues
for achievement and information on new
learning opportunities.
WHAT OUR
CUSTOMERS
ARE SAYING
Bought tiles from here a few times now.
Every time I have visited the store all the
staff have consistently been very friendly
and helpful. All the staff here are pleasant,
professional and a great asset to you!“
ANDY | LETCHWORTH
PICTURED
Main: Topps Tiles Distribution team in the Grove
Park warehouse, Leicester
Top right: In store
Bottom right: 2017 annual conference
24
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Topps Tiles Plc Annual Report and Accounts for the 52 week period ended 30 September 2017 STRATEGIC REPORT
STRATEGY IN ACTION
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25
Topps Tiles Plc Annual Report and Accounts for the 52 week period ended 30 September 2017 Key Performance Indicators
The Board monitors a number of financial and non-financial metrics and KPIs both for the Group and by individual store, including:
FINANCIAL KPIS
LIKE-FOR-LIKE SALES
GROWTH YEAR-ON-YEAR*
TOTAL SALES GROWTH
YEAR-ON-YEAR
GROSS
MARGIN
-2.9%
2016: +4.2%
-1.5%
2016: +1.3%
61.1%
2016: 61.9%
YoY: -80bps
ADJUSTED PROFIT
BEFORE TAX*
NET
DEBT
£18.6m
£27.5m
INVENTORY
DAYS
132
2016: £22.0m
YoY: -15.5%
2016: £24.8m
YoY: +£2.7m
2016: 115
YoY: +14.8%
NON-FINANCIAL KPIS
NET PROMOTER
SCORE
68.6%
CUSTOMER
SERVICE SCORE
80.2%
COLLEAGUE
TURNOVER
35.0%
2016: 69.4%
YoY: -80bps
2016: 79.7%
YoY: +50bps
2016: 29.5%
YoY: +550bps
CARBON EMISSIONS PER
STORE (TONNES PER ANNUM)
NUMBER OF STORES
AT YEAR END
34.3
2016: 38.3
YoY: -10.4%
372
2016: 351
YoY: +21
* As defined on page 3
NOTES
• 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.
• Customer service score is calculated based on the results of our mystery shopper programme. This programme sees a panel of independent shoppers visit each of our stores
every month and scores them across six service-led categories. Each category holds a varying weighting towards the overall score percentage.
• Energy carbon emissions have been compiled in conjunction with our electricity supplier (Opus) and our gas supplier (Gazprom). This is based on the actual energy consumed
multiplied by Environment Agency approved emissions factors. Vehicle emissions have been calculated by our in-house transport team based on mileage covered multiplied by
manufacturer quoted emission statistics.
The Board receives regular information on these and other metrics for the Group as a whole. This information is reviewed and updated as
the Directors feel appropriate.
26
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Topps Tiles Plc Annual Report and Accounts for the 52 week period ended 30 September 2017 STRATEGIC REPORT
KEY PERFORMANCE INDICATORS | FINANCIAL REVIEW
Financial Review
ROB PARKER | CHIEF FINANCIAL OFFICER
2017 was a more challenging
year for Topps Tiles with
economic headwinds resulting in
lower sales and gross margin."
FINANCIAL OBJECTIVES
In addition to the key strategic objectives
highlighted in the Strategy section the
business maintains a strict financial
discipline, including:
• Primary focus on increasing revenues
and cash generation, maintaining cost
disciplines and optimising gross margins;
• Capital structure and net debt – the
level of net debt has now been reduced
to a point that the Board feels is an
appropriate balance of an efficient
capital structure and financial flexibility;
and
• Maximising earnings per share and
shareholder returns, including bi-annual
review of our dividend policy. The Board
has previously communicated its intention
to target a dividend policy of two times
cover and we anticipate achieving this
by the end of the next financial year.
PICTURED
LuxdustTM Diamond engineered stone
wall and floor tile and SpeculoTM Mist
glass wall tile
27
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Topps Tiles Plc Annual Report and Accounts for the 52 week period ended 30 September 2017 Topps Tiles Plc Annual Report and Accounts for the 52 week period ended 30 September 2017
Financial Review
PROFIT AND LOSS ACCOUNT
REVENUE
Revenue for the period ended
30 September 2017 decreased by 1.5%
to £211.8 million (2016: £215.0 million).
Like-for-like store sales decreased by 2.9%
in the period, which consisted of a 1.9%
decrease in the first half of the financial
period and a 3.9% decrease in the second
half. The decrease in sales performance
correlates with the reduction in consumer
confidence highlighted above in the
Marketplace section of this report.
GROSS MARGIN
Overall gross margin decreased to 61.1%
compared with 61.9% in the previous
financial period. Over the first half of the
period the gross margin was 61.2%, and
we delivered a gross margin of 61.0%
in the second half of the period. Gross
margin has been adversely affected during
the year due to the continued weakness of
sterling post the EU referendum, which has
generated an impact of around 200bps.
In addition to this, we have seen further
pressure on margin of c.55bps from the
continued shift in customer mix towards
trade and the launch of our new Trade
Reward+ loyalty programme. We have
focused on negating these effects and were
successful in offsetting around two-thirds of
this pressure in the period.
This has been achieved through a
combination of improved product mix
(including the benefit from exiting low
margin real wood in the prior period),
sourcing gains and our continued focus on
a differentiated product offer. For the year
ahead we anticipate delivering a gross
margin gain of c.50bps, assuming stable
sterling exchange rates.
OPERATING EXPENSES
Total operating costs reduced from
£112.1 million to £111.5 million, a
decrease of 0.5%. Costs as a percentage
of sales were 52.6% compared to 52.1%
in the previous period. When adjusting
items (detailed below) are excluded,
operating costs were £109.9 million
(2016: £110.1 million), equivalent to
51.9% of sales (2016: 51.2% of sales).
The movement in adjusted operating costs is
explained by the following key items:
• The average number of UK stores
trading during the financial period was
361 (2016: 344), which generated an
increase in costs of approximately
£3.4 million
• Inflation at an average of approximately
1.5% increased our cost base by around
£1.6 million
• Regulatory costs impacts, including the
National Living Wage, accounted for
£0.5 million of additional costs
• Depreciation increased by £0.3 million
due to continued higher levels of
investment in the store estate
• Employee profit share costs decreased
by £5.1 million due to a lower level of
financial performance compared
to budget
• Other savings across the business
accounted for £0.9 million; these were
primarily generated across the store
estate from reduced hours
• The remaining elements of the cost
base were flat when compared to the
prior year
For the year ahead we expect the adjusted
operating costs for the business to be
between £116 million and £117 million.
During the period we incurred several
charges and gains which we have
excluded from our adjusted operating
costs as they are not representative of the
underlying cost base of the business.
These are:
• The impairment of plant, property and
equipment relating to closed or loss-
making stores of £1.2 million (2016:
£0.8 million)
• Vacant property costs of £0.4 million
(2016: £0.3 million)
• Costs relating to the acquisition of the
share capital of Parkside Ceramics of
£0.2 million
• A gain on the disposal of a long
leasehold property of £0.2 million
• In addition, in the prior year we also
excluded £0.5 million for a stock write-off
relating to the exit of the wood category,
and business restructuring costs of £0.4
million. There were no such costs in the
current year.
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REVENUE
195.2
177.8
212.2
215.0
£m
211.8
2013
2014
2015
2016
2017
GROSS MARGIN
%
60.2
60.9
61.2
61.9
61.1
2013
2014
2015
2016
2017
28
Topps Tiles Plc Annual Report and Accounts for the 52 week period ended 30 September 2017
STRATEGIC REPORT
FINANCIAL REVIEW
Net interest cover was 29.0 times
(2016: 27.4 times) based on earnings
before interest, tax, depreciation and
the impairment of plant, property and
equipment, excluding the impact of IAS 39
in finance charges.
PROFIT BEFORE TAX
Profit before tax was £17.0 million (2016:
£20.0 million). The Group profit before tax
margin was 8.0% (2016: 9.3%).
Excluding the adjusting items detailed
on page 3, profit before tax was £18.6
million (2016: £22.0 million). The Group
adjusted profit before tax margin was 8.8%
(2016: 10.2%).
OPERATING PROFIT
Operating profit for the period was £17.9
million (2016: £21.1 million), representing
8.4% of sales (2016: 9.8%).
Excluding the adjusting items detailed
above, operating profit was £19.5 million
(2016: £23.1 million), representing 9.2%
of sales (2016: 10.7%).
OTHER GAINS AND LOSSES
During the period we disposed of one long
leasehold property and recognised a gain
of £0.2 million. In the prior period we did
not dispose of any property.
FINANCING
The net underlying interest charge for
the year was £0.9 million (2016: £1.1
million). There has been a small reduction
in the interest charge due to a reduced
interest margin as a result of lower levels
of gearing.
ADJUSTED OPERATING EXPENDITURE BRIDGE
1.6
0.3
0.5
(5.1)
TAX
The effective rate of corporation tax for the
period was 21.0% (2016: 22.3%).
The Group tax rate is higher than the
prevailing UK corporation tax rate due
to non-deductible expenditure and
depreciation on assets not qualifying for
capital allowances.
EARNINGS PER SHARE
Basic earnings per share were 6.98 pence
(2016: 8.05 pence).
Diluted earnings per share were
6.86 pence (2016: 7.82 pence).
Excluding the adjusting items detailed on
page 3, adjusted earnings per share were
7.63 pence (2016: 8.86 pence).
DIVIDEND AND DIVIDEND POLICY
The Board has previously indicated that it
intends to pursue a dividend cover policy
and that it would target 2x as a sustainable
level, with a period of reducing cover until
that target is achieved. In line with this
policy, the total dividend for the period has
been based on cover of approximately
2.25x.
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Read our Financial Statements
on pages 80 to 83
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PICTURED
Left: BerkeleyTM Slate Blue with border and
corner pieces, ceramic wall and floor tiles
Right: BistroTM Black porcelain wall and
floor tile
29
25632.02 13 December 2017 11:33 AM Proof6
Financial Review
ADJUSTED PROFIT BEFORE TAX £m
ADJUSTED EPS
p
TOTAL DIVIDEND
22.0
20.4
18.6
8.86
8.17
7.63
17.1
13.0
6.63
5.44
3.00
2.25
1.50
3.50
p
3.40
2013
2014
2015
2016
2017
2013
2014
2015
2016
2017
2013
2014
2015
2016
2017
The Board is recommending to shareholders
a final dividend of 2.30 pence per share
(2016: 2.50 pence per share). This will
cost £4.4 million (2016: £4.8 million).
The shares will trade ex dividend on
21 December 2017 and, subject to
approval at the Annual General Meeting,
the dividend will be payable on
2 February 2018.
This brings the total dividend for the year to
3.40 pence per share (2016: 3.50 pence
per share), a decrease of 2.9%.
BALANCE SHEET
CAPITAL EXPENDITURE
Capital expenditure on tangible fixed assets
in the period amounted to £10.1 million
(2016: £10.5 million), a decrease of
3.8%.
Key investments are as follows:
• New stores £4.9 million – 26 new
openings (2016: £4.2 million)
• Store refits £2.5 million
(2016: £3.3 million)
• All stores related strategic initiatives
£0.3 million (2016: £1.7 million)
• Freehold and leasehold investments
£0.8 million (2016: £0.2 million)
• Other expenditure of £1.6 million
(2016: £1.1 million)
The Board expects capital expenditure in
the year ahead to reduce to approximately
£8.0 million.
The key driver of this will be a smaller
number of store openings and a reduced
number of store refits, which will in part be
offset by the commencement of a two-year
programme of all-store improvements (which
is referred to above in the Strategic Review
section of this report), and investments in our
Leicester warehouse and office facilities to
enable growth of the new commercial
tile business.
INTANGIBLE ASSETS
During the period we acquired 100% of
the equity of Parkside Ceramics Ltd for
a net cash consideration of £1.1 million
(including £0.2 million of cash retained in
the business). This resulted in the recognition
of goodwill of £0.9 million and separately
identifiable intangible assets of £0.4 million.
In addition to the cash consideration paid,
there is a further earn out opportunity for
management which has a maximum ceiling
of £0.3 million, to be paid in 2018 subject
to performance targets being met.
At the period end the Group held nine
freehold or long leasehold sites, including
two warehouse and distribution facilities,
with a total carrying value of £16.5 million
(2016: nine freehold or long leasehold
sites valued at £16.2 million). The carrying
value is based on the historic purchase cost
and capital expenditure less accumulated
depreciation.
INVENTORY
Inventory at the period end was £29.5
million (2016: £25.7 million) representing
132 days turnover (2016: 115 days
turnover). The increase in the absolute level
of inventory is driven by the increase in the
store base, increased cost of goods due to
sterling weakness and also by increased
stocks of key selling ranges.
ACQUISITIONS AND DISPOSALS
During the period we acquired one
freehold property for a consideration of
£0.8 million and disposed of one long
leasehold property for a consideration of
£0.3 million. In the prior year there were
no acquisitions or disposals of any
freehold property.
This balance also includes the inventory for
Parkside Ceramics of £0.5 million (2016:
nil) which was acquired on 1 September
2017. Days cover has increased as a result
of this and the lower level of absolute sales.
30
25632.02 13 December 2017 11:33 AM Proof6
Topps Tiles Plc Annual Report and Accounts for the 52 week period ended 30 September 2017 Topps Tiles Plc Annual Report and Accounts for the 52 week period ended 30 September 2017
STRATEGIC REPORT
FINANCIAL REVIEW
CAPITAL STRUCTURE AND TREASURY
Cash and cash equivalents at the period
end were £7.5 million (2016: £10.2
million) with borrowings of £35.0 million
(2016: £35.0 million).
CURRENT TRADING AND MARKET
CONDITIONS FOR THE YEAR AHEAD
2017 was a more challenging year for
Topps Tiles with economic headwinds
resulting in lower sales and gross margin.
CAPITAL EXPENDITURE
£m
12.0
11.2
10.5
10.1
The Group maintained good control of
costs which helped to offset the reduction
in gross margin, but ultimately we have
recorded a reduction in profits and earnings
per share.
5.5
Trading in the first eight weeks of the new
financial year has improved, with like-for-
like sales increasing by 3.2%. While we
are retaining our prudent view of market
conditions for the year ahead, we are
encouraged by this return to like-for-like
sales growth.
We are confident that the combination
of the significant further potential in our
strategy of "Out-specialising the Specialists"
with our accelerated plan to grow in the
commercial tile market will underpin our
future success.
2013
2014
2015
2016
2017
NET DEBT
36.6
£m
30.5
28.4
27.5
24.8
2013
2014
2015
2016
2017
This gives the Group a net debt position
of £27.5 million (2016: £24.8 million).
During the year the Group settled £2.9
million of tax and interest charges with
HMRC which related to legacy tax
enquiries, and purchased Parkside
Ceramics Ltd for a consideration of £1.1
million. Both of these should be considered
as one-off cash outflows.
CASH FLOW
Cash generated by operations was £22.2
million, compared to £29.9 million in the
prior year period, a decrease of £7.7
million.
This decrease was generated by a
£4.1 million reduction in EBITDA and a
£3.6 million reduction in working capital
cash flow. The reduction in working capital
cash flow was driven by a £2.5 million
working capital cash outflow in the period
compared to a £1.1 million working capital
cash inflow in the prior period. In the year
ahead we have plans in place to reduce
working capital by up to £4 million through
a combination of actions across inventory,
creditors and debtors.
PICTURED
Top right: Cotton MillTM porcelain wall
and floor tile
25632.02 13 December 2017 11:33 AM Proof6
31
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.
32
ANNUAL GENERAL MEETING
The Annual General Meeting for the period
to 30 September 2017 will be held on
31 January 2018 at 10am at the Leicester
Marriott Hotel.
The Strategic Report was approved by
the Board of Directors and signed on its
behalf by:
MATTHEW WILLIAMS |
CHIEF EXECUTIVE OFFICER
ROB PARKER |
CHIEF FINANCIAL OFFICER
28 November 2017
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 understandable view of
the business.
PICTURED
Top left: GlaciemTM Black glass wall
mosaic with HexmixTM Basalt wall and
floor mosaic
Top right: PenthouseTM Gris porcelain
wall and floor tile
25632.02 13 December 2017 11:33 AM Proof6
Topps Tiles Plc Annual Report and Accounts for the 52 week period ended 30 September 2017 STRATEGIC REPORT
FINANCIAL REVIEW | RISKS AND UNCERTAINTIES
Risks and Uncertainties
The Board has assessed its process for
reviewing strategic risk and uncertainties
during the year. As a result of this we have
developed a new framework, as follows:
• An annual strategic risk workshop which
is attended by the Audit Committee
Chairman, Head of Internal Audit and
key senior members of the management
team including the Executive Committee
• The production of a key risks register
which is prepared based on a
combination of likelihood and impact
• A monthly summary in the Board pack
which includes a summary of the key
risks identified, combined with mitigants
and agreed actions – with each risk
refreshed at least quarterly
GOING CONCERN
When considering the going concern
test the Board review several factors
including a detailed review of risks
and uncertainties, the Group’s forecast
covenant and cash headroom against
lending facilities and management’s
current expectations. As a result of this
review 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 considers
it appropriate to prepare the financial
statements on the going concern basis.
LONG-TERM VIABILITY
In addition to the Going Concern
statement the Directors have also
assessed the prospects of the Group
over a longer period. This assessment
has been done over a period of three
years for the following reasons:
• this is the basis on which current
strategic financial plans have been
prepared; and
• the business is largely dependent
on UK consumer confidence and
discretionary spending which is
difficult to project beyond this period.
The Directors’ assessment has been
made with reference to the Group’s
current position and prospects, the
Group’s strategy, and principal risks
facing the Company, as detailed in the
Strategic Report.
The Board considers the key risks to
delivery of these financial plans to be a
reduction in the level of sales growth and
possibly a resultant weakening in gross
margin. As a result a number of sales
and gross margin based sensitivities
have been prepared and reviewed by
the Board. It should also be noted that
the Group is operationally geared which
means that there is a relatively high
level of impact from any increases or
decreases in levels of turnover.
Topps Tiles' sustained decrease in levels
of turnover would be managed by a
reduction in operational expenditure,
reductions in capital expenditure, tighter
working capital controls and possible
restriction of Company dividends. The
conclusion of these sensitivities is that
the Group has a good level of financial
flexibility and is well positioned to
withstand a number of risks occurring
and/or a sustained reduction in levels of
consumer spending.
The Board has also considered the
Group’s current banking facilities which
include a non-amortising revolving credit
facility that expires in June 2019. The
Board considers that the facility will need
to be reviewed in the 12-month period
prior to expiry and that this is very likely
to be completed on similar commercial
terms to the current facility.
Based on this review the Directors
confirm that they have a reasonable
expectation that the Group will continue
to operate and meets its liabilities, as
they fall due, for the next three years.
25632.02 13 December 2017 11:33 AM Proof6
33
Topps Tiles Plc Annual Report and Accounts for the 52 week period ended 30 September 2017 Risks and Uncertainties
Risk
Impact
Mitigation
Status
Brexit – General Economic and Consumer Confidence
The general economic climate and
specifically consumer confidence are
important to Topps Tiles and events
that may affect these factors present
a financial risk to the business. In the
period post the UK voting to leave the
European Union consumer confidence
has been weaker and this has
impacted our market.
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.
During the year we have seen a softening of these
measures and, as expected, a subsequent softening
in business performance. The full impact of the
decision of the UK to leave the EU still remains
unclear and this is likely to continue to create some
uncertainty in the outlook over the short term.
We believe that through a combination of a robust
level of profitability and financial flexibility the
business is able to withstand short-term trading
pressures. This has been proven in recent years
over the period of the financial crisis. During the
year we have kept a tight control on costs and
have increased focus on taking market share from
competitors along with our proposed diversification
into the commercial tile market. Longer term we
consider that the UK housing market remains
attractive and we believe there remains significant
upside from a sustained economic recovery.
Brexit – Foreign Exchange Rate Fluctuation
A significant devaluation of sterling
will result in increased costs of
sourcing for the Group, and a
subsequent reduction in profits. In
the immediate period post the UK
voting to leave the European Union
there was a significant weakening in
the value of sterling. Since that initial
period of devaluation the value of
sterling has remained broadly stable.
Appropriate Business Strategy
Our business strategy will not be
successfully delivered.
We source around 50% of our cost of goods from
outside the UK which gives us an exposure to
movements in foreign currency exchange rates.
In the financial period the impact on profits of
foreign exchange rates is around £4 million
adverse when compared to the prior period.
We have mitigated around half of the impact in
the period through supplier negotiation or sourcing
management with a number of lines being re-
sourced resulting in increased gross margin for
these products. Gross margins overall in FY17 have
fallen as a result of the devaluation of sterling and
we will continue to work on growing underlying
gross margin in the year ahead by focusing on
innovation, exclusivity and product mix.
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.
Our refreshed strategy includes a specific intent
to diversify into the commercial tile market which
will include some risk around successful delivery
of acquisitions (where relevant) and management
distraction away from our core business.
The strategy is reviewed annually, updated as
required and approved by the Board. Bi-annual
communication events and regular updates are
provided to all colleagues on our progress towards
our goals.
We have clear plans for our recently acquired
business, Parkside Ceramics, and as a result some
structural changes have been made to ensure that
our diversification into the commercial tile market
does not detract from the core business strategy.
Regulatory Cost Pressures
The Government programme of
above inflation pay rises known as
the “National Living Wage” will
increase employment costs at a
faster rate than sales are rising. The
Government has also introduced a
new “Apprentice Levy” initiative which
will incur an additional annual cost on
the business.
The impact of additional costs to the Group could
take the form of reduced profits. The costs, based
on indications from the Government, over and
above underlying inflation are around £0.8 million
per annum through to 2020. The Apprentice Levy
annual cost will be around £0.2 million p.a.
NEW
The Group is focused on how to deliver the
Government’s plans through to 2020 whilst
maximising the benefit to colleagues and
minimising the impact to shareholders. Thus far,
we have preserved our high levels of performance
related variable pay and resisted any temptations
to reduce these payments in order to fund the
National Living Wage costs. We will continue to
review all options to offset increased regulatory
costs elsewhere in our cost base but we remain
committed to variable pay to drive performance.
Regular checks are carried out on payroll runs to
ensure compliance with the National Living Wage.
Risk has
increased
Risk has
decreased
No
change
NEW
New
risk
KEY:
34
25632.02 13 December 2017 11:33 AM Proof6
Topps Tiles Plc Annual Report and Accounts for the 52 week period ended 30 September 2017 Risk
Impact
Mitigation
Status
STRATEGIC REPORT
RISKS AND UNCERTAINTIES
Threat from Competitors
Competitors eroding our market
share. A greater competitive threat
could come from a new or existing
competitor introducing a new point of
differentiation to our market such as
operational standards, range, service,
use of technology, etc.
Loss of market share leading to reduced sales and
profitability.
Attracting and Retaining Talent
The failure to attract and/or retain
key individuals could impact on the
ability of the business to deliver its
objectives.
Reduced levels of customer service or lack of key
individuals to deliver the business objectives would
result in lower levels of sales and profits for the
Group.
The loss of technical knowledge in
stores through high levels of colleague
turnover could have a negative impact
on our customer service levels.
We constantly review our competitor set but at
the same time we are clear on what differentiates
Topps Tiles from its competitors. Our market
leading product offer, inspirational experience
and dedicated trade focus are the key elements
of our business which, whilst imitated, have never
effectively been replicated.
For the next two years we will focus on a
programme of all-store improvements which will
further differentiate us from our competitors. We
continue to invest in digital marketing and actively
monitor social media platforms.
We also work closely with tile manufacturers to
ensure we are driving innovation in our market.
NEW
We are very focused on colleague engagement
and colleague turnover is closely monitored. Pay
and benefits are benchmarked to ensure we are
rewarding our people in line with the market and
reflective of their contribution to the business.
During the year we have delivered two key
initiatives in this area. We have developed (in
conjunction with existing colleagues) a new
employer branding and we have also launched
a new learning and development platform,
“the Hub”, which offers all colleagues training
matched to their current roles and personal future
development plans.
In addition, we have a detailed succession plan for
each key executive and non-compete clauses for
senior colleagues.
Store Portfolio
Optimum property strategy for the UK
market along with the risk of losing
key performing stores which contribute
a material amount of Group earnings.
A larger store presence across the UK than is
required to maximise the profitability of the Group.
Loss of a multiple number of top performing stores
or stores in the wrong areas could cause a material
impact on the Company’s profitability.
We have previously worked with third parties to
assess the optimum footprint for the UK and will
complete a similar task again in the year ahead.
The outputs of this work will provide us with a
refreshed target number of total stores.
We also actively monitor the digital market to
assess any impact this may have on our store estate
going forwards.
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 pro-actively re-gear leases to
ensure we always have at least several years of
security.
We also recognise that freehold is the ultimate
mitigant and as part of our continuing review of key
stores we consider this where appropriate.
Our supply chain is diverse and due to our scale
we can source products directly from manufacturers
anywhere in the world. Re-sourcing ranges from
one manufacturer to another is something to which
we are accustomed.
Loss of a Key Supplier
The loss of a key supplier could
impact on our ability to trade in some
areas of our range.
The loss of a key supplier would potentially lead to
disruption in supply of key selling products leading
to loss of sales and profits.
We consider that the risk has
increased as a result of the UK’s
decision to leave the European Union.
Subject to trade deals agreed both
with existing EU nations and countries
outside of the EU this could result in
the business reviewing key supplier
relationships and ultimately having to
appoint some new suppliers.
25632.02 13 December 2017 11:33 AM Proof6
35
Topps Tiles Plc Annual Report and Accounts for the 52 week period ended 30 September 2017
Risks and Uncertainties
Risk
Financing
The Group has a £50 million
revolving credit facility in place
which was refinanced in June 2014
and expires in June 2019. 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.
Cyber Security
The business suffers a breach of its IT
systems security leading to either a
loss of capability or a loss of customer
and/or commercial data.
Major Reputational Damage
The Topps Tiles brand is a very
important part of our competitive
advantage. Possible areas of impact
could be due to a failure in our core
processes around our products, our
stores, our supply chain (including
ethical sourcing) or our people.
Impact
Mitigation
Status
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 an equity fundraising.
Loan renewal discussions are conducted well in
advance in order to allow sufficient time to cater for
different scenarios and would include both existing
and new banks to gauge interest.
Our expectation for the year ahead is to have
completed refinancing negotiations by year end, or
be well advanced in our discussions.
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 pro-active discussions
with lenders.
A temporary loss of systems would be likely to result
in an operational impact which would adversely
affect sales and ultimately profits.
The Company uses modern systems and the latest
network and security protocols to protect against
attack or breaches of security.
The loss of commercial or customer data would
potentially result in reputational damage to the
Company.
A disaster recovery server provision is in place
and the majority of our servers now operate on
virtualised technology. This significantly reduces
system recovery times from a possible 24 hours to
a target of two hours.
Whilst impacts from reputational damage could
be wide ranging the most likely impact would be
financial, resulting from damage to our brand and
consequent loss of sales.
Governance and internal controls are the key
mitigants against reputational damage. The
Company operates a wide range of processes and
procedures designed to ensure that we are fully
compliant with all legal requirements and operate
industry and governance best practice across the
entire business.
We have developed during the year a critical
incident response process which would be invoked
in the event of a business crisis.
Supply chain is of particular significance and we
believe in long-term strategic relationships with our
key suppliers. We have in place a sourcing policy
which includes the relevant provisions from the
Modern Slavery Act and are working with suppliers
to ensure agreement with our terms of trade and
compliance.
GDPR
General Data Protection Regulations
come into force in May 2018. This
requires extensive new requirements of
companies to ensure that all personal
data is protected.
The consequences of non-compliance with new
GDPR regulations are severe financial penalties.
Fines can be up to €20 million or 4% of annual
turnover for severe breaches.
The Company has a good appreciation of GDPR
and we already have a plan in place to ensure
full compliance.
NEW
Personal data processes have been catalogued for
the four key processing areas which are marketing/
CRM, online, HR and Stores.
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.
36
25632.02 13 December 2017 11:33 AM Proof6
Topps Tiles Plc Annual Report and Accounts for the 52 week period ended 30 September 2017 STRATEGIC REPORT
CORPORATE SOCIAL RESPONSIBILITY
Corporate Social Responsibility
As a large company with a nationwide
network of stores as the UK’s market leader,
and an international supply chain, we take
seriously the impact we have in the places
where we do business and seek to develop
excellent relationships with
local communities.
We continue to develop our Corporate
Social Responsibility (CSR) policies to
protect our environment, look after our
people and be good neighbours, over and
above our legal and social obligations to
do so.
The Company’s Board has been fully
engaged in this process from its outset and
in 2013 we appointed a Non-Executive
Director, Andy King, to have specific
responsibility for further developing policies
in this area.
We continue to seek new ways of
achieving in this area, from supporting
charities and taking part in community
work, to offering a scheme to assist local
community projects. We consistently aim
to reduce our environmental impact and
fully invest in our colleagues and their
development.
PICTURED
Top: Opening of Topps Tiles Stourbridge
Centre: Alan Titchmarsh and Marcellus Baz
for ITV's Love Your Garden
Bottom: Macmillan Coffee Morning
sale in-store
25632.02 13 December 2017 11:33 AM Proof6
37
Topps Tiles Plc Annual Report and Accounts for the 52 week period ended 30 September 2017 Corporate Social Responsibility
OUR COMMUNITY AND
CHARITY WORK
Our colleagues both at our main
support office in Leicester and our 372
stores nationwide play a proactive
and enthusiastic role in our charity and
community projects. We hold a Company-
wide ballot every five years to select a
national charity to support.
MACMILLAN CANCER SUPPORT
Topps Tiles has supported Macmillan
Cancer Support since 2015, a partnership
that will stay in place until at least the end
of 2019.
Fundraising events have included a summer
barbecue, bike rides, bake sales, coffee
mornings and dress-up events, raising more
than £58,000 in the past financial year
(up from just over £20,000 in the previous
year).
We have also had a record year of
fundraising for Macmillan via Pennies, the
digital charity box, which offers customers
in all our stores the opportunity to round up
their purchase to the nearest pound, with
the additional small change donated to
Macmillan.
In 2016-17, £123,604.39 was raised
through Pennies, more than double the
previous year’s donation of just under
£55,000.
LEICESTERSHIRE CARES
We continue to work alongside
Leicestershire Cares, a charity organisation
local to our Leicester head office, offering
staff time out to take part in a range of
initiatives to support local good causes.
Our association with Leicestershire
Cares continues to support our focus on
colleague engagement and provides
additional development opportunities for our
colleagues. The interest from our colleagues
has been extremely positive, leading us into
our third year of membership.
Last year we achieved many successes
including:
• Five “team challenges” which involved
a mix of teams across the business
completing challenges, such as protecting
the environment, by building tree frames
at a public park to redeveloping an
animal sanctuary
• Our head office took part in the “Collect
for Christmas” campaign, which involved
donating new household supplies and
toiletry packs to organisations that support
the homeless. The campaign collected
over £24,000 worth of donations in
total.
• Our property department won “Team of
the Year” award presented by the CEO
of Leicestershire Cares at their annual
celebration event, for the outstanding
work they completed for their team
challenge. This saw colleagues and
volunteers from its property team paint,
make, build and tile areas of Redgate
Animal Sanctuary in Markfield, leaving
the charity with a more practical animal
feeding area and kitchen
• Our commercial team decorated the
accommodation blocks at Topstones, a
local campsite used by the Girl Guides
These challenges give everyone at Topps
Tiles Head Office the opportunity to give
something back to the local community
as part of their working day and their
own personal development, and enables
the Company to showcase its brand
as a proactive part of the community in
Leicestershire and Rutland.
PICTURED
Left: In-store fundraising for Macmillan
Cancer Support
Right: Painting Topstones for
Leicestershire Cares
38
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Topps Tiles Plc Annual Report and Accounts for the 52 week period ended 30 September 2017 Topps Tiles Plc Annual Report and Accounts for the 52 week period ended 30 September 2017
STRATEGIC REPORT
CORPORATE SOCIAL RESPONSIBILITY
TRANSPORT
Last year our fleet covered more than 3.5m
kilometres delivering stock to our stores. This
was up by just under 260,000 kilometres
travelled on the previous year due to the
increased number of stores in the estate,
but due to a newer, more efficient fleet, we
used 74,000 fewer litres of fuel.
All of the Topps Tiles vehicles now run
with the latest, lowest emission engine
technology and meet the tough Euro 6
standard.
They are all equipped with forward-facing
dashboard mounted cameras, which
encourages safer driving and, in the event
of an incident, helps us to understand the
cause.
In addition, our newest vehicles are
equipped with built-in satellite navigation for
responding to changing traffic conditions en
route to stores, as well as a lane departure
warning system to guard against accidents
on multi-lane carriageways.
We also use on-board technology from
Microlise as standard, which allows remote
access to driver and vehicle performance
as well as satellite tracking. This system
is being used to support good driving
behaviour, which can lead to lower fuel use
and lower vehicle emissions.
In this past year, driver league tables
have been introduced using the data
from Microlise, which encourages and
incentivises colleagues to monitor and
maintain or improve their own standards of
driving.
We have also improved efficiency and
reduced noise pollution by increasing our
use of electric forklifts on our vehicles. These
have proved successful during a trial period
in making low-noise deliveries, where stores
are situated closer to residential areas.
This will be key to future plans to enable
deliveries outside traditional trading hours,
potentially enabling fleet reduction and
further reduced fuel consumption.
TILES4SMILES
The Tiles4Smiles scheme offers community
groups and charities the opportunity to
request donations of tiles – either for
premises renovations, improvements to
their kitchen or bathroom areas, or for art
projects.
This year has seen a boxing club in
Nottingham enjoy the creation of a garden
space, as featured on ITV’s Love Your
Garden with Alan Titchmarsh, a national
charity for facially-disfigured people create
a large butterfly showcasing positive
messages for Changing Faces Day, a
community centre in Tyneside enjoy a
renovation of its bathroom facilities and a
new kitchen facility for a Mencap café.
YOUTH SPORT
At Topps Tiles, we have always recognised
the benefits that participation in sport
can bring to the communities in which
we trade. We are proud to be involved
in helping children to get outdoors and
become active through our youth sport
sponsorship. Donating funds for football,
rugby and hockey kits, children in 127
teams throughout the UK benefited from the
scheme in 2017.
PICTURED
Top: Alan Sproston, one of Topps Tiles'
longest-serving colleagues, with "his"
named truck.
Right: Changing faces charity event,
Sheffield
25632.02 13 December 2017 11:33 AM Proof6
39
Corporate Social Responsibility
*Our Responsible Sourcing Code of
Conduct and Modern Day Slavery
Statement can be found on our website at
www.toppstiles.co.uk in the Investor
section under Corporate Responsibility.
ENVIRONMENT
At the very least we expect that suppliers
will comply with local environmental laws
and legislation. Our suppliers will take into
consideration the principles of sustainable
development, in particular the optimum use
of raw materials, water, the efficient use of
energy and also minimising the amount of
waste as a result of the supply chain and
manufacturing process.
PICTURED
Members of the HR team at the 2017
annual conference
SUPPLY CHAIN
We source product from around the world
to bring the latest trends, cutting edge
designs and advanced technologies to
ensure we remain the market leader in the
UK.
Our supply chain can be complex but
we are committed to ensuring all our
suppliers adhere to the highest standards
of ethics, able to demonstrate safe working
conditions, and are treating workers with
dignity and respect.
All our suppliers are required to comply with
the Topps Tiles Responsible Sourcing code.
This code has been designed to be ethical,
auditable, achievable and is in place to
both promote good working practices with
our suppliers and provide an opportunity to
share our values.
The code represents the Company’s
fundamental expectations of its supply
partners in relation to responsible sourcing.
Topps Tiles will not knowingly work with
any supplier who does not comply and
requires all suppliers to acknowledge this
code and confirm their acceptance of its
provisions. Compliance is underpinned by
way of contractual obligation and audit
process.
Suppliers applying this code are expected
to comply with national and other
applicable laws. Where the provisions of
such laws and the code of practice address
the same subject, suppliers are to apply
those provisions that afford the greater
protection.
As part of our auditing process, all of our
suppliers this year have had to complete a
Social and Ethical Self-assessment document
to identify if there are any product or
geographical risks. To address any possible
concerns our buyers, buying agents
and technical manager conduct regular
surveillance visits and factory tours to ensure
that our products are sourced ethically.
As part of our due diligence, third party
auditing will take place where any specific
risks are identified.
We encourage all our suppliers to be
transparent in all their activities and work
in collaboration with us in promoting best
practice.
In 2015, the Modern Day Slavery Act
came in to force and Topps Tiles is
committed to this act ensuring that no forms
of modern day slavery enter the business
and its supply chains. The Company will
ensure transparency within the organisation
and with its service providers and supplier
of goods.
40
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Topps Tiles Plc Annual Report and Accounts for the 52 week period ended 30 September 2017 STRATEGIC REPORT
CORPORATE SOCIAL RESPONSIBILITY
WASTE
Reducing the amount of waste sent to
landfill continues to be a focus across
the business.
In our Distribution Centre, we continue to
recover and in most cases, recycle, several
streams of waste from our operations.
These include cardboard, shrink-wrap,
polythene, polypropylene banding, wooden
packaging, scrap metal and repairable
wooden pallets.
In partnership with Green4Life and Lafarge
we are now recycling our tile waste at a
local quarry, where the tiles are crushed
and converted into a composite
of aggregate.
During the year we invested in a new
mill-sized cardboard baler to allow us to
increase the revenue earned from this waste
stream. We also invested in a new general
waste compactor to reduce the volume of
our non-recyclable waste and therefore the
number of collections.
Our Distribution Centre now also centrally
recovers cementitious waste product
(such as adhesive and grout) from all
stores where it is sent on for specialised
end-of-life processing.
The Company has now joined the On-pack
Recycling Label scheme which delivers a
simple, consistent and UK-wide recycling
message. As members of the scheme, all
our suppliers will place these specific clear
recycling symbols on all of our own brand
products. This enables our customers to
recycle more packaging correctly. It also
enables local authorities to recycle
more and in turn will minimise our
environmental footprint.
THE TILE ASSOCIATION
This year we have begun working
with The Tile Association (TTA), a
Trade Association whose mission it is
to promote professionalism and technical
standards in the tiling industry across tiling
contractors, fixers, distributors, retailers
and manufacturers. The TTA is the leading
body contributing to the formation of British
Standards in Tiles and a member of
Build UK.
The UK Waste Electrical and Electronic
Equipment (WEEE) Regulations were
introduced in 2007 with the aim of
reducing the amount of electrical and
electronic equipment ending up in landfill.
Our stores offer a like-for-like take back
service, whereby customers can return their
old product to any store, when purchasing
a new one. These electrical products are
then collated at our Distribution Centre and
sent for recycling.
We aim to work with the association on
improving industry standards, training
and offering support in encouraging best
practise throughout the industry.
In 2017 we were also honoured by TTA
with the Excellence in Multiple Retailing
award in recognition of excellent customer
service, outstanding product offering and
innovation within a store setting.
PICTURED
Members of the Topps Tiles Distribution
team with comedian John Bishop at the
2017 Motor Transport Awards after
winning Livery of the Year
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41
Topps Tiles Plc Annual Report and Accounts for the 52 week period ended 30 September 2017 Our Governance
42
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Topps Tiles Plc Annual Report and Accounts for the 52 week period ended 30 September 2017Heading One OUR GOVERNANCE
CONTENTS
Board of Directors
Corporate Governance Statement
Directors’ Report
Directors’ Remuneration Report
44
46
50
54
PICTURED
HenleyTM Fog with border and corner
pieces, ceramic wall and floor tiles
with LongmoreTM Grey porcelain wall
and floor tile
43
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Topps Tiles Plc Annual Report and Accounts for the 52 week period ended 30 September 2017 Board of Directors
DARREN SHAPLAND
NON-EXECUTIVE CHAIRMAN
MATTHEW WILLIAMS
CHIEF EXECUTIVE OFFICER
ROBERT PARKER
CHIEF FINANCIAL OFFICER
Darren has over 25 years of retail and public
experience, having held senior financial and operational
positions within the Burton Group, Arcadia and
Kingfisher. Darren was Chief Financial Officer at J
Sainsbury's plc between 2005 and 2010 before being
appointed Group Development Director, a position he
held between 2010 and 2011. He was also Non-
Executive Chairman of Sainsbury's Bank from 2006
to 2013 and Chief Executive of Carpetright plc from
2012-2013.
Matt joined the Company in 1998 as Property Director
soon after its IPO. He spent the next six years expanding
the Company’s store base, acquiring more than 200
new sites, which still make up a large part of the store
portfolio today. Promoted to the role of Chief Operating
Officer in 2004 and joining the PLC board in 2006, he
was a key member of the team that established Topps as
the leading specialist tile retailer in the UK. In 2007 he
was promoted to Chief Executive Officer. Matt is also a
non-executive director of The Original Factory Shop.
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 for all aspects of
finance, human resources, property, IT, and company
legal matters.
Darren is currently Non-Executive Director and Chairman
of the Audit Committee at Ferguson plc.
KEITH DOWN C D E
NON-EXECUTIVE DIRECTOR
CLAIRE TINEY B F D H
NON-EXECUTIVE DIRECTOR
ANDY KING G E H
NON-EXECUTIVE DIRECTOR
Keith is a chartered accountant and is currently the Chief
Financial Officer of Dunelm Group Plc, and has held
this post since December 2015. He was previously the
Group Financial Director of the Go-Ahead Group plc
and JD Wetherspoons plc. Keith joined the Board of
Topps Tiles in February 2015.
Andy has recently been appointed Chief Executive
Officer of Evans Cycles. Previously he was Managing
Director of Dobbies Garden Centres and prior to that
Chief Executive of Notcutts Garden Centres. He has
also held director roles at The Body Shop, Mothercare,
W H Smith and Boots The Chemists. Andy joined the
Board of Topps Tiles in January 2012.
Claire joined the Board of Topps Tiles in November
2011. She is also a Non-Executive Director of Volution
plc and Hollywood Bowl Group plc. Additionally she
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 W H Smith. Most recently,
she was HR Director at McArthurGlen.
STUART DAVEY A
COMPANY SECRETARY AND SECRETARY
OF BOARD SUBCOMMITTEES
Stuart qualified as a Solicitor in 1987. He joined Topps
Tiles in 2005 having previously worked in private
practice and in house with National Westminster Bank
Plc. Stuart became Group Lawyer in 2010 and was
appointed Company Secretary in September 2014.
44
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Topps Tiles Plc Annual Report and Accounts for the 52 week period ended 30 September 2017 OUR GOVERNANCE
BOARD OF DIRECTORS | EXECUTIVE TEAM
OUR
ADVISERS
SECRETARY
S. Davey
REGISTERED NUMBER
3213782
REGISTERED OFFICE
Thorpe Way, Grove Park
Enderby, Leicestershire,
LE19 1SU
AUDITOR
Deloitte LLP
2 Hardman Street,
Manchester, M3 3HT
BANKERS
Barclays Bank Plc
3 Hardman Street, Spinningfields,
Manchester, M3 3HF
REGISTRARS
Capita Asset Services
Bourne House, 34 Beckenham Road,
Beckenham, Kent, BR3 4TU
SOLICITORS
Osborne Clark LLP
One London Wall,
London, EC2Y 5EB
FINANCIAL PR ADVISERS
Citigate Dewe Rogerson
3 London Wall Buildings,
London, EC2M 5SY
BROKERS
Peel Hunt LLP
Moor House, 120 London Wall,
London, EC2Y 5ET
Liberum Capital Limited
Ropemaker Place, 25 Ropemaker Street,
London, EC2Y 9LY
Executive Team
MATTHEW WILLIAMS
CHIEF EXECUTIVE OFFICER
ROBERT PARKER
CHIEF FINANCIAL OFFICER
BRIAN LINNINGTON
COMMERCIAL DIRECTOR
RICHARD CARTER
OPERATIONS DIRECTOR
A chemistry graduate with an MBA, Brian Linnington
has many years retail business experience, starting
his career at Boots where his roles included Category
General Manager Toiletries, International Country
Manager for Holland and then Taiwan and finally
Multichannel Director for Boots UK. Prior to joining
Topps Tiles in December 2012 Brian was Product and
Marketing Director at Vision Express for four years. Brian
is responsible for all aspects of buying, marketing and
online in Topps.
Richard is an experienced retailer who has worked
for both blue chip retailers as well as smaller, more
entrepreneurial businesses. Richard has previously
held senior operations roles with the Spirit Group
(Punch Taverns), Virgin Retail, Dixons, Office World
(Staples) and started his career with Asda on their retail
operations graduate recruitment programme. Richard
joined Topps in 2010 and has accountability for
retail operations, supply chain and the trade customer
division.
A
B
C
Secretary of the Audit, Nomination and Remuneration Committees
Senior Independent Director
Chairman of Audit Committee
D Member of Nomination Committee
E
F
G
Member of Remuneration Committee
Chairman of Remuneration Committee
Chairman of Nomination and Governance Committee
H Member of the Audit Committee
25632.02 13 December 2017 11:33 AM Proof6
45
Topps Tiles Plc Annual Report and Accounts for the 52 week period ended 30 September 2017 Corporate Governance Statement
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
Throughout the period, the Company has
applied the principles set out in the Code,
including both the Main Principles and the
supporting principles, by complying with the
Code as reported above.
Further explanations of how the Main
Principles have been applied are set out
below and in the Strategic Report, Directors’
Remuneration Report and Audit Committee
Report.
The Board conducts an annual evaluation
of its own performance and that of the
Audit, Remuneration and Nomination and
Governance Committees and as a result
minor adjustments will be made to the
Board's timetable and tabling of business.
In addition, each Board member completed
a detailed evaluation of the Chairman’s
performance, the result of which was positive
in all respects.
Matthew Williams, as Chief Executive
Officer ("CEO"), does not sit on any of
the Audit, Remuneration or Nomination
and Governance Committees, although
he may attend by invitation of the relevant
Chairperson. There is a clear division of
responsibilities between his role as CEO and
that of Chairman.
The Board currently comprises six members,
of which four are considered independent.
The Senior Independent Non-Executive
Director is Claire Tiney, who also chairs the
Remuneration Committee. Brief biographical
details of all Directors are given on pages
44 and 45. The Board meets 12 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.
During the period the Board reviewed the
matters reserved for the Board and those
delegated to Committees and are satisfied
that such matters are appropriate.
Board members are responsible for their own
development but are provided access to the
Company’s advisers 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 various technical
seminars and professional updates on a
range of relevant topics useful to enhancing
the Board’s knowledge and understanding
of corporate governance. Provision has also
been made within the Board’s timetable for
regular updates in relation to areas including
the economy, the market and development in
remuneration practice.
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.
The Board also has regular contact with
individual Heads of Departments by way of
Board presentations in relation to specific
departmental initiatives and areas of
responsibility.
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.
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 that Darren Shapland,
Claire Tiney, Andy King and Keith Down 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 reviews the independence of Non-
Executive Directors on an ongoing basis.
The Board operates three committees.
These are the Nomination and Governance
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.
25632.02 13 December 2017 11:33 AM Proof6
DARREN SHAPLAND | CHAIRMAN
The Board has reviewed the
contents of the Annual Report
and consider the document
to be fair, balanced, and
understandable and an accurate
representation of the current
position and performance of the
Company, its business model
and strategy."
DEAR SHAREHOLDER
The Company is committed to the principles
of corporate governance contained in
the 2016 UK Corporate Governance
Code issued by the Financial Reporting
Council (the “Code”) for which the Board is
accountable.
The Board has reviewed the contents of the
Annual Report and consider the document
to be fair, balanced, and understandable
and an accurate representation of the current
position and performance of the Company,
its business model and strategy. The basis
for this view is that all of the Directors of the
Company 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 has received
a report from the Audit Committee in relation
to the financial results and as a result the
Board has approved the final accounts
for the period. Having gained a thorough
understanding of the business each member
46
Topps Tiles Plc Annual Report and Accounts for the 52 week period ended 30 September 2017 OUR GOVERNANCE
CORPORATE GOVERNANCE STATEMENT
ATTENDANCE AT BOARD AND COMMITTEE MEETINGS
The following table shows the number of Board and Committee meetings held during the 52 week period ended 30 September 2017
and the attendance record of the individual Directors. Directors who are not committee members are invited to attend meetings where the
respective Chair considers it appropriate given the nature of the business being considered by the Committee.
Board of Directors
Audit Committee
D. SHAPLAND M. WILLIAMS R. PARKER
C. TINEY
A. KING
K. DOWN
12
12
12
12
12
12
12
12
12
12
11
12
3*
3
2*
3
3*
3
3
2
2
3
2
2
3
2
2
3
2
2
3
2
2
3
2
2
Remuneration Committee
2*
2
2*
2
1*
2
Nomination and Governance Committee
2
2
2*
2
0
2
Meetings attended
Possible meetings
*Attended by invitation of the Chairperson of the related committee.
THE ROLE OF THE BOARD OF DIRECTORS
The Board of Directors has overall responsibility for approving our Company strategy and the governance of the business.
The primary goal of the Board is to ensure that the Company is being run in the best long-term interests of both the Company
itself and all of its stakeholders. Stakeholders include employees, shareholders, suppliers and any other creditors of the business.
SUB-COMMITTEE RESPONSIBILITIES
AUDIT
COMMITTEE
• Financial reporting
• External audit
• Risk management and internal
controls including internal audit
• Whistleblowing fraud and anti-
bribery
NOMINATION AND
GOVERNANCE COMMITTEE
• Board structure
• Board appointments
• Board succession plans
• Senior executive appointments
REMUNERATION
COMMITTEE
• Chairman and
Executive Director pay
• Senior executive pay
• Share incentive plans
Read more on page 48
Read more on page 49
Read more on page 54
BOARD COMPOSITION
BOARD TENURE
GENDER DIVERSITY
EXECUTIVE
33.3%
NON-EXECUTIVE
66.6%
0–3 YEARS
33.3%
3–6 YEARS
33.3%
ABOVE 6 YEARS
33.3%
MALE
83.3%
FEMALE
16.6%
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47
Topps Tiles Plc Annual Report and Accounts for the 52 week period ended 30 September 2017 Corporate Governance Statement
STATEMENT ABOUT APPLYING
THE PRINCIPLES OF THE CODE
The Company has applied the principles
of the 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
independent Non-Executive Directors. The
Chairman is Keith Down and the other
members are Claire Tiney and Andy King.
The qualifications of the Audit Committee
members are detailed on page 44 of our
Annual Report. Its Chairman has relevant
experience, being a qualified Chartered
Accountant who is currently serving as the
Chief Financial Officer of a listed company.
The Chief Executive, Chief Financial Officer
and the Chairman of the Board usually
attend meetings by invitation.
The Audit Committee considers the nature
and scope of the audit process (both
internal and external to ensure that the
programme is aligned to key risks and
where necessary any particular risk areas)
and its effectiveness. It also monitors,
reviews and approves the internal audit
programme and receives reports from
the internal audit team on a regular basis
to review the effectiveness of its work.
The Committee meets with the external
auditor and considers the Annual and
Interim Financial Statements before making
its recommendations to the Board. The
Committee reviews and monitors the
external auditor’s independence and
objectivity and the effectiveness of the audit
process.
In addition, the Committee is responsible for
ensuring that the arrangements are in place
to enable staff, in confidence, to raise
any concerns about possible improprieties
in matters of financial reporting or other
matters. No issues have been identified
during the period.
The Committee is responsible for the robust
assessment of the Company’s principal
strategic risks which include those to
its business model, future performance,
solvency and liquidity and this process is
performed by the Committee Chairman
in conjunction with a number of senior
operational managers. The Committee
Chairman reviews the strategic risk schedule
on a quarterly basis to ensure that any
actions that have been identified are being
progressed. It also reviews the Group’s
system of internal control by reference to
an Internal Controls Framework assessment
and reports its findings twice a year to the
Board.
During the period the Committee has
considered and recommended to the Board
the adoption of the Topps Tiles Group Tax
Strategy which has been published on the
Company’s website.
The Audit Committee Chairman in
conjunction with the Company Secretary
conducts an annual internal evaluation
of the Committee's processes during
the period. The conclusion was that the
Committee's is broadly functioning well, in
accordance with its Terms of Reference and
corporate governance practice providing
appropriate assurance to the Board.
The Audit Committee provides advice to the
Board on whether the Annual Report is fair,
balanced and understandable and provides
the necessary information shareholders
require to assess the Company’s
performance, business model and strategy.
In doing so, the following risks have been
addressed specifically:
• Review of principal strategic risks – the
Committee conducts an annual review
of principal 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 principal risks
based on a combination of likelihood
and impact and then also considers what
appropriate mitigating effects 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. Provisions are made to
the extent that the poor performing store
leases are considered to be onerous.
Dilapidations are provided for across
the entire store portfolio. The Audit
Committee also reviews progress towards
these plans at the following review.
The Audit Committee also reviews and
approves the discount rate calculations
used to discount these provisions.
• Review of inventory – ensuring that
inventory is correctly valued is a key
area of focus for the Audit Committee.
The finance function performs ongoing
detailed checks of supplier invoices
by comparing to system prices and
management conduct a regular review
of any products being sold, or likely to
be sold, below the original cost price.
Inventory provisions are prepared in
accordance with these reviews.
• Loyalty Accounting – the Group operates
a trade loyalty scheme which requires
the deferral of sales at the time loyalty
points are awarded and also tracking of
the level of expiry of points (loyalty points
expire after 6 months). As this is the first
year of this new scheme the Committee
has reviewed the level of points accrued
and expiry levels to satisfy itself that risks
around income recognition have been
appropriately managed.
• Going concern & long term viability
statement – the Chief Financial Officer
provides an assessment of the Company’s
ability to continue to trade on both a
12-month look-forward test basis and
also a longer term review – over three
years. The conclusion of those reviews is
included in the Strategic Report.
Part of the role of the Audit Committee is to
review the independence of the Company's
auditor.
Deloitte LLP has been the external auditor
for the Group since September 2003. The
current audit partner, Damian Sanders, first
period of signing was the financial period
ended 27 September 2014. In line with
independence requirements, his last period
as audit partner will be the financial period
ended 29 September 2018.
48
25632.02 13 December 2017 11:33 AM Proof6
Topps Tiles Plc Annual Report and Accounts for the 52 week period ended 30 September 2017 OUR GOVERNANCE
CORPORATE GOVERNANCE STATEMENT
As previously stated, the Company is
committed to complying with Corporate
Governance guidelines and currently
complies with the Code. The Audit
Committee assists the Board in discharging
its responsibilities in this regard. The
outcomes from the recent key risks and
uncertainties review are detailed in the
Strategic Report section of this report
and the Board has also considered all
significant aspects of internal control in
conjunction with the review of the work of
Internal Audit.
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.
DARREN SHAPLAND
CHAIRMAN OF THE BOARD
28 November 2017
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 reappointment. The
Committee has also considered the
requirements of the EU statutory audit
amending Directive (2014/56/EU) and
Audit Regulation (No 537/2014) and has
concluded that the Company is not required
to rotate and tender for audit services until
2023.
The Company has a policy for the provision
of non-audit services which is published
on the Company’s website. In accordance
with the policy the external auditor has
not provided non-audit services to the
Company during the period.
The audit fees for the statutory audit of
the Company’s consolidated financial
statements and audit related services for the
period are £142,500 (2016: £127,500).
NOMINATION AND
GOVERNANCE COMMITTEE
The Nomination and Governance
Committee is chaired by Andy King. The
other Committee members are Darren
Shapland, Keith Down 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 and Governance
Committee is also responsible for diversity
and our policy is included in the Strategic
Report.
The Nomination and Governance
Committee, in conjunction with the Chief
Executive, reviews succession planning
in relation to senior positions within the
business and development plans for senior
colleagues.
All Committee Terms of Reference can be
found within the Investors section of the
Company’s website www.toppstiles.co.uk.
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. In addition, I write to major
shareholders each year offering to meet
with them to discuss the Company and
specifically matters of governance.
The Company also publishes financial
information on its website
www.toppstiles.co.uk. Further, the chairs
of the Audit, Remuneration and Nomination
and Governance Committees make
themselves available at the AGM to answer
any questions shareholders may have.
MODERN DAY SLAVERY
The Board is committed to ensuring that
acts of modern day slavery and human
trafficking do not enter the business and
its supply chain and has complied with
the Modern Slavery Act 2015 by making
an appropriate statement which has been
published on the Company’s website. The
Board and senior management recognise
the importance of this policy statement
and its objectives. The Company has
successfully introduced The Topps Tiles
Code of Conduct for Suppliers, details of
which accompany the Company’s Modern
Slavery Statement on the Company’s
website.
MAINTENANCE OF A SOUND
SYSTEM OF INTERNAL CONTROL
The Board has established a continuous
process for identifying, evaluating and
managing the significant risks the Group
faces and regularly reviews this process.
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.
25632.02 13 December 2017 11:33 AM Proof6
49
Topps Tiles Plc Annual Report and Accounts for the 52 week period ended 30 September 2017 Directors’ Report
The Directors of the Company, being the
listed entity Topps Tiles Plc, (the "Directors"
or the "Board") present their Annual Report
on the affairs of the Group (meaning the
Company and its subsidiary companies)
together with the Financial Statements and
Auditor’s Report, for the 52 week period
ended 30 September 2017. The Corporate
Governance Statement set out on pages 46
to 49 forms part of this report.
PRINCIPAL ACTIVITY
The principal activity of the Group
comprises the retail distribution of ceramic
and porcelain tiles, natural stone, and
related products.
STRATEGIC REVIEW
The Company is required by the
Companies Act 2006 to set out in this
report a fair review of the business of the
Group during the financial period ended
30 September 2017 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 information that fulfils the requirements
of the Strategic Review can be found within
the Chairman’s Statement on page 4, the
Strategic Report on pages 6 to 41, and the
Corporate and Social Responsibility ("CSR")
statement on pages 37 to 41, which are
incorporated into this report by reference.
The future prospects of the Group are
highlighted in both the Chairman’s
Statement and the Strategic Report.
The Directors monitor a number of financial
and non-financial key performance
indicators (KPIs) for the Group and its stores.
The most significant of these are detailed on
page 26.
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 30 September
2017 are set out on pages 80 to 83.
The Group’s profit for the period from
continuing operations, after taxation, was
£13,431,000 (2016: £15,531,000).
During the interim period, a dividend of 1.1
pence per share was declared and paid
(2016: interim dividend of 1.00 pence 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 2.3
pence per share, totalling £4,425,000
(2016: 2.50 pence per share, totalling
£4,803,000).
DIRECTORS
The Directors, who served throughout the
year and thereafter, were as follows:
D. Shapland
Non-Executive Chairman
M. Williams
Chief Executive Officer
R. Parker
Chief Financial Officer
C. Tiney
Senior Independent Non-Executive Director
A. King
Non-Executive Director
K. Down
Non-Executive Director
In line with the 2016 UK Corporate
Governance Code issued by the Financial
Reporting Council all Directors are subject
to annual re-election at the next Annual
General Meeting.
The internal regulation of the Company
is set out in its Articles of Association
which cover such matters as the rights of
shareholders, the appointment or removal
of Directors and the conduct of the
Board and general meetings. Copies are
available upon request and are displayed
on the Group’s website. In accordance
with the Articles of Association, Directors
can be appointed or removed by the
Board or shareholders in general meeting.
Subject to company law and the Articles
of Association, the Directors may exercise
all the powers of the Company and may
delegate authorities to committees. Details
of the principal Board committees can be
found in the CSR statement on page 37 to
41. The Company’s Articles of Association
can be amended by a special resolution of
the Company’s shareholders.
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 £15,000,000.
The Directors’ interests in the shares of the
Company are set out on page 68.
Details of Directors’ share options are
provided in the Directors’ Remuneration
Report on pages 66 to 68.
SHARE CAPITAL
Details of the Company’s issued share
capital, together with details of the
movements in the Company’s issued share
capital during the period, are shown in note
21 to the Financial Statements.
The Company has one class of ordinary
shares in issue, which carries 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 counter parties 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
50
25632.02 13 December 2017 11:33 AM Proof6
Topps Tiles Plc Annual Report and Accounts for the 52 week period ended 30 September 2017 OUR GOVERNANCE
DIRECTORS’ REPORT
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 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.
CARBON REPORTING
As detailed in the CSR statement of this report on page 41 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 establish its suitability for our business. Emissions per store are calculated on
average stores across the year.
2017
CO2 (Tonnes) CO2 (Tonnes)/Store
2016
CO2 (Tonnes)
CO2 (Tonnes)/Store
6,424
2,554
3,074
340
12,392
17.8
7.1
8.5
0.9
34.3
7,095
2,455
3,269
379
13,198
20.6
7.1
9.5
1.1
38.3
SUBSTANTIAL SHAREHOLDINGS
In addition to the Directors’ shareholdings noted on page 68, as at 30 September
2017, the Company had been notified, in accordance with Chapter 5 of the Disclosure
Guidance and Transparency Rules, of the following disclosable interests in its issued share
capital.
The period for which the carbon reporting
information is set out above is the same as
the period for which the Directors' Report
has been prepared.
Aberforth Partners LLP
Clients of Woodford
FMR plc
Williams S K M Esq
AXA Investment Managers SA
BlackRock Investment Mgt (UK)
Invesco Asset Management
Schroder Investment Mgt
Miton Group
Standard Life
Number
20,593,950
19,213,670
11,256,019
10,053,920
9,810,000
9,702,900
9,619,695
9,300,541
8,920,893
7,783,246
% held
10.6%
9.9%
5.8%
5.2%
5.1%
5.0%
5.0%
4.8%
4.7%
4.0%
Electricity
Gas and oil
Commercial fleet
Company cars
Total
Energy carbon emissions have been
compiled in conjunction with our suppliers
Opus and Gazprom and is based on the
actual energy consumed multiplied by
Environment Agency approved emissions
factors.
Vehicle emissions have been calculated
by our in-house transport team based on
mileage covered multiplied by manufacturer
quoted emission statistics.
CHARITABLE AND
POLITICAL CONTRIBUTIONS
The Group has a designated charitable
partner, the Macmillan Trust. Across the
Group's business, colleagues engage
in numerous fundraising activities which
are documented in the CSR statement of
this report. During the period the Group
made no monetary charitable donations
(2016: £nil).The Group made no political
contributions (2016: £nil).
CORPORATE SOCIAL
RESPONSIBILITY
The Company has a long-standing
Corporate Social Responsibility (CSR)
agenda covering Community and Charity,
and Environment and Our People. The
full detail of our current CSR activities
is detailed in this report on page 37.
We take the impact of our business on
our environment extremely seriously and
have included a range of environmental
metrics above with local laws and we pay
particular attention to labour standards and
factory conditions.
In addition to the above shareholdings, between 30 September 2017 and
28 November 2017 we have not been notified of any changes in shareholdings.
HUMAN RIGHTS
All of our directly employed colleagues
are based in the UK and covered by UK
employment law, with which we are fully
compliant. The Modern Slavery Act 2015
came into effect in 2015 and the Company
has taken and continues to take steps to
promote and improve our commitment to
ensuring that slavery and human trafficking
is not within our business and supply chain.
The Company has in place The Topps Tiles
Suppliers' Code of Conduct.
Both are reinforced by commercial
agreements that require our suppliers to be
fully compliant with local laws and we pay
particular attention to labour standards and
factory conditions.
No issues were raised during the year.
Both the Suppliers' Code of Conduct and
our Modern Slavery Statement can be
found on the Company’s website www.
toppstiles.co.uk in the Investors centre under
Corporate Responsibility.
51
25632.02 13 December 2017 11:33 AM Proof6
Topps Tiles Plc Annual Report and Accounts for the 52 week period ended 30 September 2017 Directors’ Report
DIVERSITY
The Nominations and Governance Committee reviews the balance of skills, knowledge and experience on the Board regularly. Its policy
with regard to gender is that we recognise the need for a greater level of diversity across all levels in our organisation; however, we do
not endorse positive discrimination and encourage colleagues to appoint the very best possible candidate to the post. During the year we
have seen an improvement in overall diversity but also recognise that within our senior manager population we are lacking diversity.
Our workforce at the period end date comprises:
Directors
Senior managers
Other employees
Total employees
% of total
2017
Male
Female
5
11
1,506
1,522
76%
1
2
473
476
24%
Total
6
13
1,979
1,998
Male
5
15
1,487
1,507
77%
2016
Female
1
1
438
440
23%
Total
6
16
1,925
1,947
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.
COLLEAGUES WITH DISABILITIES
Applications for employment by disabled
persons are always given full and fair
consideration, bearing in mind the
abilities of the applicant concerned. In
the event of members of staff becoming
disabled every effort is made to ensure
that their employment with the Company
continues and that appropriate training is
arranged. It is the policy of the Company
that the training, career development and
promotion of disabled persons should, as
far as possible, be identical to that of other
employees.
COLLEAGUE 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 are
held at local and national levels to ensure
that employee representatives are consulted
quarterly on a wide range of matters
affecting their current and future interests.
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 15, 16,
17, 18 and 19 to the Financial Statements.
The Group’s risk management policies
and procedures are also discussed in the
Strategic Report on pages 33 to 36.
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
13,027,913 (2016: 10,748,450).
As described in note 29, 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 preceding the start
of the offer period, less 20%. The shares
can be purchased during a two-week offer
period, which during the period ended 30
September 2017 fell between 5 January
2017 and 20 January 2017; the offer
price to employees was 0.70 pence. The
shares that are the subject of the share
option schemes are ordinary shares which
carry the same rights as those set out under
the "Share capital" section above.
Details of Directors’ share options are
provided in the Directors’ Remuneration
Report on page 68.
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
he/she ought to have 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.
52
25632.02 13 December 2017 11:33 AM Proof6
Topps Tiles Plc Annual Report and Accounts for the 52 week period ended 30 September 2017 This confirmation is given and should
be interpreted in accordance with the
provisions of s418 of the Companies Act
2006.
AUDITOR
A resolution to reappoint 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, the 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)
including FRS 101 Reduced Disclosure
Framework. 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.
OUR GOVERNANCE
DIRECTORS’ REPORT
In preparing the Group financial statements,
International Accounting Standard 1
requires that Directors:
RESPONSIBILITY STATEMENT
We confirm that to the best of our
knowledge:
• properly select and apply accounting
• the Annual Report and financial
statements, taken as a whole, are fair,
balanced and understandable and
provide the information necessary for
shareholders to assess the Company’s
performance, business model and
strategy;
• 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 this 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
ROB PARKER | DIRECTOR
28 November 2017
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.
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53
Topps Tiles Plc Annual Report and Accounts for the 52 week period ended 30 September 2017 Directors’ Remuneration Report
CLAIRE TINEY | CHAIRMAN OF
THE REMUNERATION COMMITTEE
We continue to monitor
executive remuneration to take
account of evolving market
practice and remain committed
to taking a responsible
approach. Accordingly, the
fundamental structure of the
package remains largely
unchanged."
The long-term plan awards granted in
December 2014 were based upon
performance over the three financial years
to October 2017. The awards required
cumulative adjusted earnings per share
(EPS) over the period to be at least 23.02p
for 25% vesting, increasing to 24.83p for
full vesting of the awards. Actual cumulative
EPS was 24.51 reflecting sustained delivery
over the three year performance period and
which will result in 86.7% of the awards
vesting in November 2017.
REMUNERATION DECISIONS
FOR 2017/18
During the period, the Committee reviewed
the base salary levels for the Executive
Directors and it was deemed appropriate
to increase base pay in line with the 2%
budgeted salary increase across the Group.
We continue to monitor executive
remuneration to take account of evolving
market practice and remain committed
to taking a responsible approach.
Accordingly, the fundamental structure of the
package remains largely unchanged.
On behalf of the Board I would like to thank
shareholders for their continued support and
I look forward to meeting you at the Annual
General Meeting on 31 January 2018.
CLAIRE TINEY
CHAIRMAN OF THE
REMUNERATION COMMITTEE
28 November 2017
STATEMENT FROM THE
CHAIRMAN OF THE
REMUNERATION COMMITTEE
DEAR SHAREHOLDER
On behalf of the Remuneration Committee I
am pleased to present the Directors’ Report
on Remuneration.
This report is presented in two sections:
the Annual Report on Remuneration and
The Directors' Remuneration Policy. At the
Annual General Meeting in January 2017,
the Remuneration Policy was subject to a
binding vote, and received strong support
from shareholders with 94% of the votes
cast being in favour. This policy is now in
place for three years. A summary of the
policy can be found on pages 55 to 63.
The Annual Report on Remuneration
provides details of the amounts earned
in respect of the 52 week period ending
30 September 2017 and how the policy
will be operated for the 52 week period
commencing 1 October 2017. This is
subject to an advisory vote at the next
Annual General Meeting which takes place
in January 2018.
PERFORMANCE IN 2016/17
AND REMUNERATION OUTCOMES
The year under review presented some
challenging market conditions, which
resulted in a step back in both revenue and
profit numbers from the prior year. During
this year the business continued to make
strategic investments in line with the business
plan and retains its market leading position
in the domestic tile market.
Reflecting the financial performance of the
Group, the variable elements of pay of
executives has been lower than last year.
The annual bonus element was 9% of
the maximum. No payment was made in
respect of the financial targets which were
linked to delivery of Adjusted PBT which
was not achieved. The remainder of the
bonus was linked to delivery of the strategic
targets and performance against these was
partially met as outlined on page 65.
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25632.02 13 December 2017 11:33 AM Proof6
Topps Tiles Plc Annual Report and Accounts for the 52 week period ended 30 September 2017 OUR GOVERNANCE
DIRECTORS’ REMUNERATION REPORT
DIRECTORS’ REMUNERATION POLICY
This part of the report sets out the Company’s Directors’ Remuneration Policy which was subject to a binding shareholder vote at the
Annual General Meeting in January 2017 and remains in force for a 3 year period from that date.
EXECUTIVE DIRECTORS
Purpose and link
to strategy
Operation
Maximum opportunity
Performance measures
Component
BASE
SALARY
Core element of fixed
remuneration set at
a market competitive
level with the aim
to attract and retain
Executive Directors of
the calibre required.
Salaries are usually reviewed
annually taking into account:
• underlying Group performance;
• role, experience and individual
performance;
• competitive salary levels and
market forces; and
• pay and conditions elsewhere
in the Group.
Not applicable.
Not applicable.
While there is no maximum salary,
increases will normally be in line
with the typical level of salary
increase awarded (in percentage
of salary terms) to other employees
in the Group.
Salary increases above this level
may be awarded in certain
circumstances, such as, but not
limited to:
• where an Executive Director
has been promoted or has
had a change in scope or
responsibility;
• an individual’s development
or performance in role (e.g.
to align a newly appointed
Executive Director’s salary with
the market over time);
• where there has been a change
in market practice; or
• where there has been a change
in the size and/or complexity
of the business.
Such increases may be
implemented over such time
period as the Committee deems
appropriate.
Whilst the Committee has not set
an absolute maximum on the level
of benefits Executive Directors may
receive, the value of benefits is set
at a level which the Committee
considers to be appropriately
positioned taking into account
relevant market levels based on
the nature and location of the role
and individual circumstances.
BENEFITS
Fixed element of
remuneration set at
a market competitive
level with the aim
to attract and retain
Executive Directors of
the calibre required.
Executive Directors receive
benefits in line with market
practice, and these include
principally life insurance, income
protection, private medical
insurance, company car or car
allowance and fuel allowance
and, where relevant, relocation
expenses. Other benefits may
be provided based on individual
circumstances. These may
include other benefits which are
introduced for the wider workforce
on broadly similar terms.
Any reasonable business related
expenses (including the tax
thereon) can be reimbursed.
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55
Topps Tiles Plc Annual Report and Accounts for the 52 week period ended 30 September 2017 Directors’ Remuneration Report
Maximum opportunity
Performance measures
Not applicable.
Set at a level which the Committee
considers to be appropriately
positioned taking into account
relevant market levels based on
the nature and location of the role
and individual circumstances.
The contribution levels for the year
2015/16 were set at 12.5% of
salary.
Contributions of up to 20% of
salary may be made to take
account of a change in the
scope of the role, increase in
responsibility and/or a change in
the size and/or complexity of the
business.
Participation limits are those set
by the UK tax authorities from time
to time.
Not subject to performance
measures in line with HMRC
practice.
EXECUTIVE DIRECTORS
Component
PENSIONS
Purpose and link
to strategy
Operation
Provides market
competitive post-
employment benefits
(or cash equivalent)
with the aim to attract
and retain Executive
Directors of the
calibre required.
Executive Directors are eligible
to participate in the defined
contribution pension scheme.
In appropriate circumstances,
such as where contributions
exceed the annual or lifetime
allowance, Executive Directors
may be permitted to take a cash
supplement instead of contributions
to a pension plan.
ALL
EMPLOYEE
SHARE
SCHEMES
To create alignment
with the Group and
promote a sense of
ownership.
Executive Directors are entitled to
participate in a tax qualifying all
employee SAYE scheme under
which they may make monthly
savings contributions over a period
of three or five years linked to
the grant of an option over the
Company’s shares with an option
price which can be at a discount
of up to 20% to the market value
of shares at grant.
Executive Directors are also
entitled to participate in an HMRC
tax-qualifying Share Incentive Plan
(“SIP”).
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DIRECTORS’ REMUNERATION REPORT
EXECUTIVE DIRECTORS
Purpose and link
to strategy
Operation
Maximum opportunity
Performance measures
Component
ANNUAL
BONUS
Rewards performance
against annual
targets which support
the strategic direction
of the Group.
Awards are based on annual
performance against key financial
targets and/or the delivery of
personal/strategic objectives.
Pay-out levels are determined by
the Committee after the year end
based on performance against
those targets.
The Committee has discretion to
amend the pay-out should any
formulaic output not reflect the
Committee’s assessment of overall
business performance.
For up to two years following
the payment of an annual bonus
award, the Committee may require
the repayment of some or all of
the award if an act or omission or
a failure to apply reasonable skill
and judgement leads to a material
loss to the Group or serious
reputational damage to the Group
or a material misstatement of the
Group’s financial statements.
Long-term incentive awards are
granted under the LTIP, approved
by shareholders on 23 January
2013.
Under the LTIP, awards of nil cost
share options or conditional shares
may be made.
Awards may be settled in cash at
the election of the Committee.
The vesting of awards will be
subject to the achievement of
specified performance conditions,
over a period of at least three
years.
The maximum bonus opportunity
for an Executive Director will not
exceed 100% of salary.
The normal maximum award is
100% of salary in respect of a
financial year. Under the share
plan rules the overall maximum
opportunity that may be granted
in respect of a financial year
is 200% of salary. The normal
maximum award limit will only
be exceeded in exceptional
circumstances involving the
recruitment or retention of an
Executive Director.
The market value of the shares
subject to an award is based on
the three day average share price
immediately after the Company’s
Qtr 4 trading statement, unless the
Committee determines otherwise.
Targets are set annually reflecting
the Company’s strategy and are
aligned with key performance
indicators.
Up to 20% of the bonus
may be based on strategic
measures and/or individual
performance. The balance
will be assessed against key
financial performance metrics of
the business.
Financial metrics
There is no minimum payment
at threshold performance and
all of the maximum potential
will be paid out for maximum
performance, with scaled vesting
in between.
Non-financial or
individual metrics
Vesting of the strategic awards
will apply based on the
Committee’s assessment of the
extent to which a strategic metric
has been met.
Relevant performance measures
are set that reflect underlying
business performance.
Performance measures and
their weighting where there
is more than one measure
are reviewed annually to
maintain appropriateness and
relevance.
For achievement of threshold
performance 25% of the
maximum opportunity will vest.
There will usually be straight
line vesting between threshold
and maximum performance.
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57
LONG TERM
INCENTIVE
PLAN
(“LTIP”)
To incentivise
Executive Directors,
and to deliver
genuine performance-
related pay, with a
clear line of sight
for Executives and
direct alignment
with shareholders’
interests.
Topps Tiles Plc Annual Report and Accounts for the 52 week period ended 30 September 2017 Directors’ Remuneration Report
EXECUTIVE DIRECTORS
Component
2020
AWARDS
Purpose and link
to strategy
Operation
Maximum opportunity
Performance measures
The awards are subject to
achieving revenue of £300m
and adjusted profit before
tax under pin of £38m in the
financial period ending 3rd
October 2020.
A one-off share
award to incentivise
Executive Directors
to achieve our
ambitious 2020
growth strategy and
to align them with the
goals set for the rest
of the management
team.
Up to 100% of salary.
The number of shares will be
based on a share price of
147.75 pence, being the share
price when awards under the
2020 plan were granted to other
members of the management
team.
The combined value of LTIP and
2020 awards granted in the
same financial year will be subject
to an overall limit of 200% of
salary.
The 2020 awards will be
granted under the rules of the LTIP
approved by shareholders on 23
January 2013.
Awards of nil cost share options or
conditional shares may be made.
Awards may be settled in cash at
the election of the Committee.
The vesting of awards will be
subject to the achievement of
specified performance conditions
based on the financial reporting
period ending 3rd October
2020.
The Executive Directors will be
required to retain 50% of the
shares vesting (net of tax) until the
fifth anniversary of grant.
SHAREHOLDING GUIDELINE
The Executive Directors are subject to a shareholding requirement to build and maintain a shareholding in Topps Tiles equivalent to 200%
of salary for the Chief Executive and 150% of salary for the Chief Financial Officer.
LTIP AND 2020 AWARDS ADDITIONAL INFORMATION
The Committee has the right to reduce, cancel or impose further conditions on unvested or unexercised awards if there has been a material
misstatement of the Company’s financial results, a material failure of risk management by the Company or if there has been serious
reputational damage to the Company as a result of the participant’s misconduct or otherwise.
For up to two years following the payment of a long-term incentive award, the Committee may require the repayment of some or all of
the award if an act or omission or a failure to apply reasonable skill and judgement leads to a material loss to the Group or serious
reputational damage to the Group or a material misstatement of the Group’s financial statements.
EXPLANATION OF PERFORMANCE MEASURES CHOSEN FOR THE INCENTIVE SCHEMES
Performance measures are selected that are aligned with the performance of the Group and the interests of shareholders. Stretching
performance targets are set each year for the annual bonus and long-term incentive awards. When setting these performance targets, the
Committee will take into account a number of different reference points, which may include the Company’s business plans and strategy
and the economic environment. Full vesting will only occur for what the Committee considers to be a stretching performance.
The annual bonus can be assessed against financial and individual/strategic measures as determined by the Committee. The Committee
considers that profit before tax is a key performance metric for the annual bonus and specific strategic objectives for each Director, which
are aligned to delivering the overall business strategy, encourage behaviours which facilitate profitable growth and the future development
of the business.
Long-term performance measures are chosen by the Committee to provide a robust and transparent basis on which to measure the
Company’s performance over the longer term and to provide alignment with the business strategy. They are selected to be aligned with the
interests of shareholders and to drive business performance whilst not encouraging excessive risk-taking.
The Committee retains the ability to adjust or set different performance measures for the annual bonus and share awards if events
occur (such as a change in strategy, a material acquisition and/or a divestment of a Group business or a change in prevailing market
conditions) which cause the Committee to determine that the measures are no longer appropriate and that amendment is required so that
they achieve their original purpose.
Awards and options may be adjusted in the event of a variation of share capital in accordance with the rules of the LTIP.
58
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Topps Tiles Plc Annual Report and Accounts for the 52 week period ended 30 September 2017 OUR GOVERNANCE
DIRECTORS’ REMUNERATION REPORT
ILLUSTRATIONS OF APPLICATION OF REMUNERATION POLICY FOR 2017/18
M T M Williams
R Parker
)
0
0
0
£
’
(
n
o
i
t
a
r
e
n
u
m
e
r
£484k
£1,288k
31%
31%
£886k
23%
23%
l
t
a
o
T
100%
54%
38%
)
0
0
0
£
’
(
n
o
i
t
a
r
e
n
u
m
e
r
l
t
a
o
T
£570k
23%
23%
£314k
£826k
31%
31%
100%
54%
38%
Minimum
performance
Performance
in line with
expectations
Maximum
performance
Minimum
performance
Performance
in line with
expectations
Maximum
performance
■ Base salary, benefits, pensions
■ Annual bonus
■ LTIP
■ Base salary, benefits, pensions
■ Annual bonus
■ LTIP
In illustrating the potential reward, the following assumptions have been made:
Fixed pay
Annual bonus
LTIP*
MINIMUM PERFORMANCE
PERFORMANCE IN LINE
WITH EXPECTATIONS
MAXIMUM PERFORMANCE
Fixed elements of remuneration
only – base salary (being the
salary as at 1 October 2017),
benefits as disclosed in the single
figure table on page 63 for the
year 2016/17 and pension of
12.5% of salary.
No bonus.
No LTIP vesting.
50% of salary awarded for
achieving target performance.
100% of salary awarded for
achieving maximum performance.
50% of maximum award vesting
(equivalent to 50% of salary) for
achieving target performance.
100% of maximum award vesting
(equivalent to 100% of salary) for
achieving maximum performance.
*
LTIP awards are included in the scenarios above at face value with no share price movement included.
NON-EXECUTIVE DIRECTORS
Purpose and
link to strategy
Sole element of Non-Executive
Director remuneration, set at
a level that reflects market
conditions and is sufficient
to attract individuals with
appropriate knowledge and
experience.
Approach of the Company
Fees are normally reviewed annually.
Fees paid to Non-Executive Directors for their services are approved by the Board. Fees may include a basic fee
and additional fees for further responsibilities (for example, chairmanship of Board committees or holding the office
of senior independent director). Fees are based on the level of fees paid to Non-Executive Directors serving on the
boards of similar-sized UK listed companies and the time commitment and contribution expected for the role. Typically,
any fee increase will be in line with the wider workforce. Fee increases may be awarded above this level in certain
circumstances such as (but not limited to):
• where there has been a change in market practice;
• where there has been a change in the size and complexity of the Company; or
• where there has been an increase in the Non-Executive Director’s time commitment to the role.
Overall fees paid to Non-Executive Directors will remain within the limits set by the Company’s Articles of Association.
Non-Executive Directors cannot participate in any of the Company’s share options schemes and are not eligible to
join the Company’s pension scheme. Non-Executive Directors may be eligible to receive benefits such as the use of
secretarial support, travel costs (including any tax incurred thereon) or other benefits that may be appropriate.
59
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Topps Tiles Plc Annual Report and Accounts for the 52 week period ended 30 September 2017
Directors’ Remuneration Report
APPROACH TO RECRUITMENT REMUNERATION
The policy aims to facilitate the appointment of individuals of sufficient calibre to lead the business and execute the strategy effectively for
the benefit of shareholders. When appointing a new Executive Director, the Committee seeks to ensure that arrangements are in the best
interests of the Company and not to pay more than is appropriate.
The Committee will take into consideration a number of relevant factors, which may include the calibre of the individual, the candidate’s
existing remuneration package, and the specific circumstances of the individual including the jurisdiction from which the candidate was
recruited.
When hiring a new Executive Director, the Committee will typically align the remuneration package with the above Policy for existing
Directors. The Committee may include other elements of pay which it considers are appropriate, however, this discretion is capped and is
subject to the principles and the limits referred to below.
• Base salary will be set at a level appropriate to the role and the experience of the Executive Director being appointed. This may
include agreement on future increases up to a market rate, in line with increased experience and/or responsibilities, subject to good
performance, where it is considered appropriate.
• Pension and benefits will be provided in line with the above Policy.
• The Committee will not offer non-performance related incentive payments (for example a “guaranteed sign-on bonus”).
• Others elements may be included in the following circumstances:
— an interim appointment being made to fill an Executive Director role on a short-term basis;
— if exceptional circumstances require that the Chairman or a Non-Executive Director takes on an executive function on a short-term
basis;
— if an Executive Director is recruited at a time in the year when it would be inappropriate to provide a bonus or long-term incentive
award for that year as there would not be sufficient time to assess performance. Subject to the limit on variable remuneration set out
below, the quantum in respect of the months employed during the year may be transferred to the subsequent year so that reward is
provided on a fair and appropriate basis;
— if the Executive Director will be required to relocate in order to take up the position, it is the Company’s policy to allow reasonable
relocation, travel and subsistence payments. Any such payments will be at the discretion of the Committee.
• The Committee may also alter the performance measures, performance period and vesting period of the annual bonus or LTIP, subject
to the rules of the LTIP, if the Committee determines that the circumstances of the recruitment merit such alteration. The rationale will be
clearly explained in the following Directors’ Remuneration Report.
• The maximum level of variable remuneration which may be granted (excluding “buyout” awards as referred to below) is 300% of salary.
Any share awards referred to in this section will be granted as far as possible under the Company’s existing share plans. If necessary, and
subject to the limits referred to above, recruitment awards may be granted outside of these plans as permitted under section 9.4.2 (2) of
the Listing Rules which allows for the grant of awards to facilitate, in unusual circumstances, the recruitment of an Executive Director.
The Committee may make payments or awards in respect of hiring an employee to “buyout” remuneration arrangements forfeited on
leaving a previous employer. In doing so the Committee will take account of relevant factors including any performance conditions
attached to the forfeited arrangements and the time over which they would have vested. The Committee will generally seek to structure
buyout awards or payments on a like-for-like basis to the remuneration arrangements forfeited. Any such payments or awards are limited to
the expected value of the forfeited awards. Where considered appropriate, such special recruitment awards will be liable to forfeiture or
“malus” and/or “clawback” on early departure.
Where a position is filled internally, any ongoing remuneration obligations or outstanding variable pay elements shall be allowed to
continue according to the original terms.
Fees payable to a newly-appointed Chairman or Non-Executive Director will be in line with the fee policy in place at the time of
appointment.
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Topps Tiles Plc Annual Report and Accounts for the 52 week period ended 30 September 2017 OUR GOVERNANCE
DIRECTORS’ REMUNERATION REPORT
SERVICE CONTRACTS
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 prevailing notice period.
Company policy also states that Non-Executive Directors should have contracts of services with an indefinite term providing for a maximum
of six months’ notice. The role of Chairman is also Non-Executive, with an indefinite term contract and a maximum six months’ notice.
PAYMENTS FOR LOSS OF OFFICE
The principles on which the determination of payments for loss of office will be approached are set out below:
PAYMENT IN
LIEU OF NOTICE
ANNUAL BONUS
Policy
The Company has discretion to make a payment in lieu of notice. Such a payment would be calculated
by reference to basic salary and shall include compensation for any employer pension contributions for the
unexpired period of notice. The payment may also include compensation for benefits for the period.
This will be at the discretion of the Committee on an individual basis and the decision as to whether or not
to award a bonus in full or in part will be dependent on a number of factors, including the circumstances
of the individual’s departure and their contribution to the business during the bonus period in question. Any
bonus amounts paid will typically be pro-rated for time in service during the bonus period and will, subject to
performance, be paid at the usual time (although the Committee retains discretion to pay the bonus earlier in
appropriate circumstances).
LTIP
The extent to which any unvested award will vest will be determined in accordance with the rules of the LTIP.
Unvested awards will normally lapse on cessation of employment. However, if the participant leaves due to
death, illness, injury, disability, sale of his employer or any other reason at the discretion of the Committee,
the Committee shall determine whether the award will vest at cessation or at the normal vesting date. In either
case, the extent of vesting will be determined by the Committee taking into account the extent to which the
performance condition is satisfied and, unless the Committee determines otherwise, the period of time elapsed
from the date of grant to the date of cessation relative to the performance period. Awards may then be
exercised during such period as the Committee determines.
Awards which have already vested at the date of cessation may be exercised for such period as the Committee
determines.
CHANGE OF CONTROL
The extent to which unvested awards will vest will be determined in accordance with the rules of the LTIP.
Awards under the LTIP will vest early on a takeover, merger or other relevant corporate event. The Committee
will determine the level of vesting taking into account the extent to which the performance condition is satisfied
and, unless the Committee determines otherwise, the period of time elapsed from the date of grant to the date
of the relevant corporate event relative to the performance period. The Committee has discretion under the rules
of the LTIP to vest awards on a different basis.
MITIGATION
The Committee’s practice is that if an Executive Director’s employment is terminated any compensation payment
will be calculated in accordance with normal legal principles including the application of mitigation to the extent
appropriate to the circumstances of the termination.
ALL EMPLOYEE
SHARE PLANS
Payments may be made either in the event of a loss of office or a change of control under the all employee
share plans, which are governed by the rules and the legislation relating to such tax qualifying plans. There is
no discretionary treatment for leavers or on a change of control under these schemes.
In appropriate circumstances, payments may also be made in respect of accrued holiday, outplacement and
legal fees.
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61
Topps Tiles Plc Annual Report and Accounts for the 52 week period ended 30 September 2017 Directors’ Remuneration Report
Where a buyout award is made under section 9.4.2 (2) of the Listing Rules then the leaver provisions would be determined at the time of
the award.
The Committee reserves the right to make additional exit payments where such payments are made in good faith in discharge of an
existing legal obligation (or by way of damages for breach of such an obligation) or by way of settlement or compromise of any claim
arising in connection with the termination of a Director’s office or employment.
Where the Committee retains discretion it will be used to provide flexibility in certain situations, taking into account the particular
circumstances of the Director's departure and performance.
There is no entitlement to any compensation in the event of a Non-Executive Director's appointment being terminated.
EXISTING CONTRACTUAL ARRANGEMENTS
The Committee retains discretion to make any remuneration payment or payment for loss of office outside the policy in this report:
• where the terms of the payment were agreed before the policy came into effect;
• where the terms of the payment were agreed at a time when the relevant individual was not a Director of the Company and, in the
opinion of the Committee, the payment was not in consideration of the individual becoming a Director of the Company; and
• to satisfy contractual commitments under legacy remuneration arrangements.
For these purposes, “payments” includes the satisfaction of awards of variable remuneration and, in relation to an award over shares, the
terms of the payment are agreed at the time the award is granted.
POLICY FOR THE REMUNERATION OF EMPLOYEES MORE GENERALLY
Remuneration arrangements are determined throughout the Group based on the same principle that reward should be achieved for
delivery of the business strategy and should be sufficient to attract, retain and motivate high-calibre employees.
When determining the remuneration arrangements for Executive Directors, the Committee takes into consideration, as a matter of course,
the pay and conditions of employees throughout the Group. In particular, the Committee is kept informed on:
• salary increase for the general employee population;
• overall spend on annual bonus; and
• participation levels in the annual bonus and share plans.
Although no consultation with employees takes place in relation to determining the remuneration policy for Directors, the Group has
various ways of engaging employees collectively, as teams and one-to-one which provide a forum for employees to express their views
on the Company’s executive and wider employee reward policies. The Chair of the Remuneration Committee is available to meet with the
employee consultation group if requested.
STATEMENT OF CONSIDERATION OF SHAREHOLDER VIEWS
The Committee is committed to an ongoing dialogue with shareholders and welcomes feedback on Directors’ remuneration. Prior to this
Remuneration Policy being formally put to shareholders, the Committee engaged with major shareholders and institutional bodies setting
out the proposals and rationale for the changes on variable pay arrangements for Executive Directors.
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Topps Tiles Plc Annual Report and Accounts for the 52 week period ended 30 September 2017 OUR GOVERNANCE
DIRECTORS’ REMUNERATION REPORT
ANNUAL REPORT ON REMUNERATION
SINGLE FIGURE TABLE
(AUDITED INFORMATION)
The tables below detail the total remuneration receivable by each Director for the 52 week period ended 30 September 2017 and the
52 week period ended 1 October 2016.
2016/17
EXECUTIVE DIRECTORS
M T M Williams
R Parker
NON-EXECUTIVE DIRECTORS
D Shapland
A King
K Down
C Tiney
2015/16
EXECUTIVE DIRECTORS
M T M Williams
R Parker
NON-EXECUTIVE DIRECTORS
D Shapland
A King
K Down
C Tiney
Salary
and fees
£’000
Benefits
£’000
Annual
bonus
£’000
LTIP
£’000
Pension
£’000
Total
remuneration
£’000
394
250
124
43
43
44
31
26
2
–
–
–
Salary
and fees
£’000
Benefits
£’000
387
246
122
42
42
43
31
26
7
1
–
1
35
23
–
–
–
–
Annual
bonus
£’000
260
165
–
–
–
–
256
158
–
–
–
–
49
27
–
–
–
–
765
484
126
43
43
44
LTIP
£’000
Pension
£’000
Total
remuneration
£’000
339
203
–
–
–
–
49
29
–
–
–
–
1066
669
129
43
42
44
25632.02 13 December 2017 11:33 AM Proof6
63
Topps Tiles Plc Annual Report and Accounts for the 52 week period ended 30 September 2017 Directors’ Remuneration Report
The figures in the single figure tables above are derived from the following:
SALARY
AND FEES
BENEFITS
PENSION
ANNUAL
BONUS
LTIP
The amount of salary/fees received in the period.
The taxable value of benefits received in the period. These are principally life insurance, income protection,
private medical insurance, company car or car allowance, fuel allowance and the value of SAYE scheme
options granted during the period. The value attributable to Sharesave scheme options is calculated on the
following basis: Monthly contribution x 12 x 20% (being the discount applied to market value in determining the
exercise price). In the case of the Non-Executive Directors taxable expenses are shown as being paid by way of
benefits.
The pension figure represents the cash value of Company pension contributions paid to the Executive Directors
as part of the Company’s defined contribution scheme or as a cash supplement taken in lieu of contributions to
the pension plan. Rob Parker has chosen to take a cash supplement.
The annual bonus is the cash value of the bonus earned in respect of the period. A description of performance
against the objectives which applied for the period is provided on page 65.
The LTIP figure for the period 2016/17 represents the awards granted on12 December 2014. The awards
were based on cumulative EPS performance over three financial years to 30 September 2017 and will vest at
86.7% on 28 November 2017. The estimated value of the vested shares is based on a share price of 82.17
pence being the market value of the Company’s shares for the last quarter of the 52 week period ended
30 September 2017.
The LTIP figure stated for the period 2015/16 represents the value of awards granted under the Topps Tiles
Plc 2013 Long Term Incentive Plan on the 17 December 2013. The awards were based on cumulative EPS
performance over three financial years to 1 October 2016 and vested at 100% on 29 November 2016. The
estimated value of the vested shares is based on a share price of 113 pence being the market value of the
Company’s shares for the last quarter of the 52 week period ended 1 October 2016.
INDIVIDUAL ELEMENTS OF REMUNERATION
(AUDITED INFORMATION)
BASE SALARY AND FEES
Base salaries for individual Directors are reviewed annually by the Committee and are set with reference to the Remuneration Policy.
During the period the following changes to base salary were made with effect from 1 October 2017:
M T M Williams
R Parker
Base salary
1 October
2016
Base salary
1 October
2017
£394,147
£402,030
£250,604
£255,616
% increase
2%
2%
The base salary increases for Matthew Williams and Rob Parker awarded in 2017 are in line with the range of salary increases across
the Group.
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Topps Tiles Plc Annual Report and Accounts for the 52 week period ended 30 September 2017 OUR GOVERNANCE
DIRECTORS’ REMUNERATION REPORT
The Non-Executive Directors’ fees are reviewed annually with any changes effective from 1 October. Details of the current fee policy for
the Non-Executive Directors are set out in the table below. The fee increased in 2017 in line with the increase for the wider workforce.
Chairman’s fee
Non-Executive Directors’ Basic fee
Additional fees
Senior Independent Director/Chair of Remuneration Committee
Chair of the Nominations and Governance Committee
Chair of the Audit Committee
Fees
1 October
2016
Fees
1 October
2017
£124,236
£126,720
£37,805
£38,561
£6,336
£5,280
£5,280
£6,462
£5,385
£5,385
% increase
2%
2%
2%
2%
2%
TOTAL PENSION ENTITLEMENTS
During the year the Company pension benefit represented 12.5% of salary for the Executive Directors (paid as cash in lieu in respect of
Rob Parker) and is in line with the Remuneration Policy.
ANNUAL BONUS
For the 52 week period ended 30 September 2017, the maximum annual bonus opportunity was 100% of salary. To encourage
behaviours which facilitate profitable growth and future development of business, up to 80% of salary could be earned based on adjusted
PBT performance and up to 20% of salary could be earned for the achievement of individual objectives specifically delivering the strategic
plan.
The following table sets out the bonus pay-out to the Executive Directors for 2016/2017 and how this reflects performance for the period:
Adjusted PBT1
Strategic objectives:
Cost Control
Average Transaction Value (“ATV”)
Gross margin
Customer Service
Total bonus earned
Weighting
Threshold
Stretch
Executive
Director bonus
earned as a
percentage of
salary
Actual
performance
80%
£20.7 million
£25.3 million
£18.6 million
5%
5%
5%
5%
£113.5m
>£70.66
61.8%
79.5%
£112.5m
>£72.26
62.2%
80.5%
£110.0m
£70.79
61.1%
80.2%
0%
5%
1%
0%
3%
9%
1. Adjusted PBT as defined in the Financial Review section of this report.
ANNUAL BONUS FOR 2017/18
The maximum annual bonus opportunity for the 2017/18 financial year remains 100% of salary. Up to 20% of salary will continue to
be focused upon achievement of individual objectives specifically delivering the strategic plan and 80% will be based on challenging
adjusted PBT targets. The strategic objectives for 2017/18 are based on average transaction value, customer service, working capital
and colleague engagement and other strategic targets.
The Committee considers that the actual annual bonus targets are commercially sensitive and should therefore remain confidential to
the Company at this stage. However, the Remuneration Committee will continue to disclose how the bonus pay-out delivered relates to
performance against the targets on a retrospective basis.
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65
Topps Tiles Plc Annual Report and Accounts for the 52 week period ended 30 September 2017 Directors’ Remuneration Report
LONG-TERM INCENTIVES
(AUDITED INFORMATION)
AWARDS VESTING IN RESPECT OF THE FINANCIAL YEAR
The LTIP awards granted in December 2014 were based on cumulative adjusted EPS targets over the three financial years to 30
September 2017. The performance targets for the awards were as follows:
Cumulative Adjusted EPS for the period 2014/15 to 2016/17
Percentage of the award that will vest
23.02 pence
25%
Greater than 23.02 pence but less than 24.83 pence
Determined on a straight-line basis between 25% and 100%
24.83 pence
100%
Adjusted EPS is defined as stated in the Company’s accounts for the relevant financial period excluding exceptional items. Cumulative EPS
over the three year period was 24.51 pence. This resulted in 86.7% of the award vesting. Details of the awards vesting to the individual
Directors are set out in the table below:
M T M Williams
R Parker
Type of award
Nil-cost option
Nil-cost option
Number of
shares granted
359,159
221,833
% Vesting
86.7%
86.7%
Number of
shares vesting
Value of shares
on vesting*
Vesting Date†
311,391
£255,870
28 November 2017
192,333
£158,040
28 November 2017
* Based on the average share price over the last quarter of the 52 week period to 30 September 2017 of 82.17 pence.
† The awards can be exercised any time until 14 December 2024.
AWARDS GRANTED DURING THE FINANCIAL YEAR
(AUDITED INFORMATION)
For the 52 week period ended 30 September 2017 the following awards were granted to Executive Directors on 16 December 2016:
M T M Williams
R Parker
Type of award
Nil-cost option
Nil-cost option
Percentage
of salary
Number of
shares
Face value
at grant1
% of award
vesting at
threshold
Performance
period
100%
100%
389,589
394,147
247,706
250,604
25%
25%
3 years
3 years
1. Valued using a share price of 101.17 pence based on the average three-day share price ending on 7 October 2016.
The awards will vest based on the following Cumulative Adjusted EPS targets:
Cumulative Adjusted EPS for the period 2016/17 to 2018/19
Percentage of the award that will vest
29.84 pence
25%
Greater than 29.84 pence but less than 32.29 pence
Determined on a straight-line basis between 25% and 100%
32.29 pence
100%
Adjusted EPS is defined as stated in the Company’s accounts for the relevant financial period excluding exceptional items and subject to
such adjustments as the Board in its discretion determines are fair and reasonable.
These targets equate to adjusted EPS growth of c.7% growth from the 2015/16 outturn for 25% vesting and c.11% for 100% vesting.
Notwithstanding the Cumulative Adjusted EPS targets calculated above, the extent to which the awards will vest will be subject to the
Committee's assessment of the quality of earnings over the performance period. The Committee may reduce the extent to which the award
would otherwise vest if the Committee determines that the Cumulative Adjusted EPS achieved is not consistent with the achievement of
commensurate underlying financial performance taking into account such factors as the Committee considers appropriate, including market
share, margin performance, net debt, overall returns to shareholders and shareholder value creation.
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Topps Tiles Plc Annual Report and Accounts for the 52 week period ended 30 September 2017 OUR GOVERNANCE
DIRECTORS’ REMUNERATION REPORT
2020 AWARDS
In accordance with approved Remuneration Policy on 20 March 2017, the Executive Directors were granted awards to align them with
the 2020 Incentive Plan already rolled out to other members of the management team. The 2020 awards for the Executive Directors
comprise a one-off award of shares worth up to 100% of salary with the number of shares calculated using a share price of 147.75p
(being the share price used when the awards were granted to participants from Store Managers to the Leadership Team, below the
Executive Committee).
M T M Williams
R Parker
Percentage of
salary
Number of
shares1
Face value
at grant2
% of award
vesting at
threshold
Performance
period
100%
100%
262,824
254,282
167,107
161,676
100%
100%
3yrs
3yrs
Type of award
Nil-cost option
Nil-cost option
1. The number of shares was cumulated using a share price of 147.75p (being the share price used when the awards were granted to participants from Store Managers to the
Leadership Team, below Executive Committee).
2. The face value is shown using the actual share price at the date of grant of 96.8p.
The awards were subject to the following conditions based on performance in the financial year 2019/2020 of £300 million together
with an underpin of a minimum of £38m Adjusted PBT.
Sales
Adjusted profit before tax
2019/2020
£300m
£38m
Both the sales and PBT targets must be achieved for the awards to vest. If the targets are achieved the awards will vest at 100% but the
Executive Directors will be required to retain 50% of the net of tax shares vesting under the award until January 2022 (the fifth anniversary
of grant).
LONG-TERM INCENTIVES FOR 2017/18
LTIP AWARDS
No changes to the quantum or performance conditions are proposed. The maximum LTIP opportunity will remain at 100% of salary and
the proportion of the award vesting for threshold performance remains at 25% of salary.
The awards will vest based on the following Cumulative Adjusted EPS targets that equate to straight-line adjusted EPS growth of c.7%
growth from the 2017/18 outturn for 25% vesting and c.11% for 100% vesting. The Remuneration Committee considers that both the
threshold can stretch targets are challenging in the light of the growth environment and current business expectation.
Cumulative Adjusted EPS for the period 2017/18 to 2019/20
Percentage of the award that will vest
23.52 pence
25%
Greater than 23.52 pence but less than 25.37 pence
Determined on a straight-line basis between 25% and 100%
25.37 pence
100%
Adjusted EPS is defined as stated in the Company’s accounts for the relevant financial period excluding exceptional items and subject to
such adjustments as the Board, in its discretion, determines are fair and reasonable.
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67
Topps Tiles Plc Annual Report and Accounts for the 52 week period ended 30 September 2017 Directors’ Remuneration Report
ALL EMPLOYEE SHARE PLANS
The Executive Directors may participate in the Company’s all employee share plans, the Topps Tiles Plc SAYE Scheme (SAYE Scheme) and
the Topps Tiles Plc Share Incentive Plan (SIP), on the same basis as other employees.
The SAYE Scheme provides an opportunity to save a set monthly amount (currently up to £500) over three years towards the exercise of a
discounted share option, which is granted at the start of the three years.
The SIP provides an opportunity for employees to buy shares from their pre-tax remuneration up to the limit permitted by the relevant tax
legislation (currently £1,800 per year). No matching shares are awarded.
Options and awards under these plans are not subject to performance conditions.
The following SAYE options were granted to the Executive Directors during the financial year ended 30 September 2017:
M T M Williams
R Parker
Type of award1
Number of
shares
Face value
at grant2
3yr Discounted share option
3yr Discounted share option
5,142
5,142
£4,281
£4,281
3.
In accordance with the scheme rules, the options are granted with an exercise price set at a discount of up to 20% to the market value of a share when the invitations to
acquire the option are issued. For the awards granted in 2016/17 the share price at the date of invitation was 87.00 pence and the exercise price is 70.00 pence per
share. In accordance with the scheme rules, the exercise of the options is not subject to any performance condition.
4. The face value of the award is calculated by multiplying the number of shares under option by the market value of a share on the date of grant (being 83.25 pence for these
options granted on 26 January 2017).
STATEMENT OF DIRECTORS’ SHAREHOLDING AND SHARE INTERESTS
(AUDITED INFORMATION)
In order to further align the Executive Directors’ long-term interests with those of shareholders and in accordance with the Remuneration
Policy, the Committee introduced new shareholding guidelines, effective from the 2017 AGM, which required that Executive Directors
build up a shareholding or two times salary for the CEO and 1.5 times salary for the CFO. The table below sets out the number of shares
held or potentially held by Directors (including their connected persons where relevant) as at 30 September 2017:
M T M Williams
R Parker
The interests of each Executive Director of the Company as at 30 September 2017 were as follows:
Shareholding
guidelines
200%
150%
Current
shareholding
(as % of salary)
452%
182%
Type
Owned
Exercised
during
the year
Vested
Unvested
and
subject to
performance
conditions
Unvested
and not
subject to
performance
conditions
Total as at
30
September
2017
Shares
1,720,749
n/a
n/a
n/a
n/a
1,720,749
LTIP shares
SAYE options
n/a
n/a
Shares
377,893
LTIP shares
SAYE options
n/a
n/a
Shares
Shares
Shares
Shares
80,000
n/a
15,480
n/a
n/a 1,206,222 1,274,396
n/a 2,480,618
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
16,613
16,613
n/a
377,893
423,734
803,757
n/a 1,227,491
n/a
n/a
n/a
n/a
n/a
n/a
21,337
21,337
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
80,000
n/a
15,480
n/a
Director
Executive Directors
M T M Williams
R Parker
Non-Executive Directors
D Shapland
K Down
C Tiney
A King
Note. Directors' shareholdings include shares held by their closely associated persons where relevant.
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Topps Tiles Plc Annual Report and Accounts for the 52 week period ended 30 September 2017 GOVERNANCE
DIRECTORS’ REMUNERATION REPORT
There have been no changes in the Directors’ shareholdings between 30 September 2017 and the date of this report.
PAYMENTS MADE TO FORMER DIRECTORS DURING THE PERIOD
(AUDITED INFORMATION)
There have been no payments to former Directors during the period.
PAYMENTS FOR LOSS OF OFFICE MADE DURING THE PERIOD
(AUDITED INFORMATION)
No payments for loss of office were made in the period to any Director of the Company.
PERFORMANCE GRAPH
The graph below shows the TSR performance for the Company’s shares in comparison to the FTSE Small Cap Index for the eight years
to 30 September 2017. For the purposes of the graph, TSR has been calculated as the percentage change during the eight-year period
in the market price of the shares, assuming that dividends are reinvested. The graph shows the value, by the end of the 2016/2017
financial year, of £100 invested in the Group over the last eight financial years compared with £100 invested in the FTSE Small Cap
Index which the Directors believe is the most appropriate comparative index.
300
250
200
150
100
50
0
2009
2010
2011
2012
2013
2014
2015
2016
2017
Topps Tiles
FTSE Small Cap Index
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69
Topps Tiles Plc Annual Report and Accounts for the 52 week period ended 30 September 2017 Directors’ Remuneration Report
HISTORICAL CHIEF EXECUTIVE REMUNERATION OUTCOMES
The table below shows details of the total remuneration and annual bonus and LTIP vesting (as a percentage of the maximum opportunity)
for the Chief Executive over the last eight financial years.
52 week period ended 30 September 2017
52 week period ended 2 October 2016
53-week period ended 3 October 2015
52 week period ended 27 September 2014
52 week period ended 28 September 2013
52 week period ended 29 September 2012
52 week period ended 1 October 2011
Total
remuneration
£’000
Annual bonus as
a % of maximum
opportunity
LTIP as a %
of maximum
opportunity
765
1,180
2,0271
849
564
579
384
9%
67%
83%
99%
46.3%
35.2%
0%
86.7%
100%
100%
n/a
n/a
n/a
n/a
1. Restated to include the value of the January 2013 LTIP award which vested in January 2016 based on performance to 3 October 2015.
CEO PAY INCREASE IN RELATION TO ALL EMPLOYEES
The table below sets out in relation to salary, taxable benefits and annual bonus the percentage change in remuneration for Matthew
Williams compared to the wider workforce. For these purposes, the wider workforce includes all employees.
Percentage change
Salary
Taxable benefits
Annual bonus
CEO
1.8%
0%
Wider
workforce
2.4%
4.9%
-86.5%
-50.5%
SPEND ON PAY
The following table sets out the percentage change in dividends and the overall expenditure on pay (as a whole across the organisation):
Dividends and share buybacks
Overall expenditure on pay
52 week
period ended
1 October 2017
53-week
period ended
1 October 2016
3.4 pence per share
3.5 pence per share
£50,548,000
£53,816,000
Percentage
change
- 2.9%
- 6.1%
CONSIDERATION BY THE DIRECTORS OF MATTERS RELATING TO DIRECTORS’ REMUNERATION
The Committee is composed of the Company’s independent Non-Executive Directors, Claire Tiney (Chairman), Andy King and Keith
Down. The Company Secretary attends the meetings as secretary to the Committee.
The role of the Committee is to:
• Determine the pay and benefits of the Executive Directors in accordance with the Remuneration Policy.
• Determine the short and long-term incentives for Executive Directors in accordance with the Remuneration Policy.
• 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.
• To monitor the level and structure of remuneration for senior management.
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Topps Tiles Plc Annual Report and Accounts for the 52 week period ended 30 September 2017 GOVERNANCE
DIRECTORS’ REMUNERATION REPORT
ADVISERS
The Committee is assisted in its work by the Chief Executive Officer and Chief Financial Officer. The Chief Executive Officer is consulted
on the remuneration of those who report directly to him and also of other senior executives. No Executive Director or employee is present
or takes part in discussions in respect of matters relating directly to their own remuneration.
New Bridge Street has been appointed as its independent adviser. New Bridge Street is a trading name of Aon Hewitt Limited.
Adviser
Details of appointment
New Bridge Street
Appointed by the Committee
in March 2016
Fees paid by the Company for advice to the
Committee and basis of charge
Other services provided to the
Company in the 52 week period
ended 30 September 2017
£22,943.50 (excluding VAT)
None
Charged on a time/cost basis or fixed fee
dependent on the nature of the project.
New Bridge Street is a member of the Remuneration Consultants Group and adhere to its Code of Conduct. The Remuneration Committee
is satisfied that the advice received from New Bridge Street during the year has been objective and independent.
STATEMENT OF VOTING AT LAST AGM
The following table sets out actual voting in respect of the resolution to approve the Directors’ Remuneration Report at the Company’s
Annual General Meeting on 26 January 2017:
Resolution
Votes for
% of vote
Votes
against
% of vote
Discretion
% of vote
Votes
withheld
Approve Remuneration Report
115,007,901
89.18% 13,933,302
10.80%
22,389
0.02% 1,272,181
The following table sets out the actual voting in respect of the resolution to approve the Directors' Remuneration Policy at the Company’s
Annual General Meeting on 26 January 2017:
Resolution
Approve Directors'
Remuneration Policy
Votes for
% of vote
Votes
against
% of vote
Discretion
% of vote
Votes
withheld
117,880,410
94.81
6,434,637
5.18
6,889
0.01
5,913,837
APPROVAL
This report was approved by the Board on 28 November 2017 and signed on its behalf by:
CLAIRE TINEY | CHAIRMAN OF THE REMUNERATION COMMITTEE
28 November 2017
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71
Topps Tiles Plc Annual Report and Accounts for the 52 week period ended 30 September 2017 Our Financials
72
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Topps Tiles Plc Annual Report and Accounts for the 52 week period ended 30 September 2017 OUR FINANCIALS
CONTENTS
Independent Auditor's Report
Consolidated Statement of
Financial Performance
Consolidated Statement of
Comprehensive Income
Consolidated Statement of
Financial Position
Consolidated Statement of
Changes in Equity
Consolidated Cash Flow Statement
Notes to the Financial Statements
Company Balance Sheet
Notes to the Company Financial
Statements
74
80
80
81
82
83
84
112
113
PICTURED
RegalTM Wave Shadow porcelain
wall and floor tile
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Topps Tiles Plc Annual Report and Accounts for the 52 week period ended 30 September 2017 Independent Auditor’s Report to
the Members of Topps Tiles Plc
REPORT ON THE AUDIT OF THE FINANCIAL STATEMENTS
OPINION
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 30 September 2017 and of the Group’s profit 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 including Financial Reporting Standard 101 “Reduced Disclosure
Framework”; 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.
We have audited the financial statements of Topps Tiles Plc (the "parent Company") and its subsidiaries (the "Group") which comprise:
• the Consolidated Statement of Financial Performance;
• the Consolidated Statement of Comprehensive Income;
• the Consolidated Statement of Financial Position;
• the Consolidated Statement of Changes in Equity;
• the Consolidated Cash Flow Statement;
• the Parent Company Balance Sheet;
• the related notes 1 to 30 of the Consolidated Financial Statements; and
• the related notes 1 to 7 of the Parent Company Financial Statements.
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, including FRS 101 “Reduced Disclosure Framework”
(United Kingdom Generally Accepted Accounting Practice).
BASIS FOR OPINION
We conducted our audit in accordance with International Standards on Auditing (UK) (ISAs (UK)) and applicable law. Our responsibilities
under those standards are further described in the auditor’s responsibilities for the audit of the financial statements section of our report.
We are independent of the Group and the parent Company in accordance with the ethical requirements that are relevant to our audit of
the financial statements in the UK, including the FRC’s Ethical Standard as applied to listed public interest entities, and we have fulfilled our
other ethical responsibilities in accordance with these requirements. We confirm that the non-audit services prohibited by the FRC’s Ethical
Standard were not provided to the Group or the parent Company.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.
SUMMARY OF OUR AUDIT APPROACH
Key audit matters
The key audit matters that we identified in the current year were:
• Inventory valuation; and
• Property provisions.
Within this report, any new key audit matters are identified with
as the prior year are identified with
.
and any key audit matters which are the same
Materiality
The materiality that we used in the current year was £867,000 which is 5% of statutory pre-tax profit.
Scoping
Our full scope audit procedures covered 99.9% of revenue (2016: 100%), 100.2% of profit before tax, offset by
losses on consolidation elsewhere in the Group (2016: 100%) and 97.7% of net assets (2016: 100%).
During the 2016 financial year, the Group moved the majority of suppliers to net pricing agreements.
Consequently, we did not identify supplier rebates to be a key audit matter for the current year audit.
Significant
changes in our
approach
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Topps Tiles Plc Annual Report and Accounts for the 52 week period ended 30 September 2017 OUR FINANCIALS
INDEPENDENT AUDITORS’ REPORT
CONCLUSIONS RELATING TO PRINCIPAL RISKS, GOING CONCERN AND VIABILITY STATEMENT
We have reviewed the Directors’ statement regarding the appropriateness of the going concern
basis of accounting contained within note 2 to the financial statements and the Directors’ statement
on the longer term viability of the Group contained within the Strategic Report on page 33.
We are required to state whether we have anything material to add or draw attention to in
relation to:
• the disclosures on pages 33 to 36 that describe the principal risks and explain how they are
being managed or mitigated;
• the Directors’ confirmation on page 33 that they have carried out a robust assessment of the
principal risks facing the Group, including those that would threaten its business model, future
performance, solvency or liquidity;
• the Directors’ statement in note 2 to the financial statements about whether they considered
it appropriate to adopt the going concern basis of accounting in preparing them and their
identification of any material uncertainties to the Group and the parent Company’s ability to
continue to do so over a period of at least 12 months from the date of approval of the financial
statements;
• the Directors’ explanation on page 33 as to how they have assessed the prospects of
the Group, over what period they have done so and why they consider that period to be
appropriate, and their statement as to whether they have a reasonable expectation that the
Group will be able to continue in operation and meet its liabilities as they fall due over the
period of their assessment, including any related disclosures drawing attention to any necessary
qualifications or assumptions; or
• whether the Directors’ statements relating to going concern and the prospects of the Company
required in accordance with Listing Rule 9.8.6R(3) are materially inconsistent with our
knowledge obtained in the audit.
We confirm that we have
nothing material to add
or draw attention to in
respect of these matters.
We agreed with the
Directors’ adoption of the
going concern basis of
accounting and we did not
identify any such material
uncertainties. 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.
KEY AUDIT MATTERS
Key audit matters are those matters that, in our professional judgement, were of most significance in our audit of the financial statements of
the current period and include the most significant assessed risks of material misstatement (whether or not due to fraud) that we identified.
These matters included those which had the greatest effect on: the overall audit strategy; the allocation of resources in the audit; and
directing the efforts of the engagement team.
These matters were addressed in the context of our audit of the financial statements as a whole, and in forming our opinion thereon, and
we do not provide a separate opinion on these matters.
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75
Topps Tiles Plc Annual Report and Accounts for the 52 week period ended 30 September 2017
Independent Auditor’s Report to
the Members of Topps Tiles Plc
The significant changes in key audit matters identified are summarised on page 74
INVENTORY
Key audit matter
description
There is significant management judgement involved in assessing the inventory provisions relating to the decisions
of discontinued product lines and the requirement for provisions based on forecast consumer trends and sales.
There are also judgements involved in determining the provisions required for inventory loss from stores based on
the average value of inventory loss and time from most recent full inventory count. In addition judgement exists in
relation to the type and percentage of overhead costs to be capitalised into inventory.
Given the size of the inventory balance, with inventory of £29.5 million (2016: £25.7 million) and the judgements
noted above, we identified this as a key audit matter.
Inventory valuation policy is included with note 2 to the accounts and reviewed by the Audit Committee as
disclosed on page 48.
How the scope
of our audit
responded to the
key audit matter
We challenged management’s assumptions in relation to the future sales prices of discontinued lines, as well as the
calculation methodology, involved in calculating the inventory provisions for obsolete and aged stock.
We also performed analytical procedures over the overheads absorption method and tested a sample of
overheads absorbed to determine whether the types of costs and value of overheads capitalised in inventory is
appropriate. Substantive testing was performed on the accuracy and completeness of the information used in
calculating the provisions, as well as in assessing the accuracy and level of overheads absorbed into inventory.
Key observations
Based on the work performed we have concluded that the inventory provisions related to obsolete and aged stock
are appropriate and that the level of overheads absorbed in inventory is reasonable.
PROPERTY PROVISIONS
Key audit matter
description
The property provisions arise from the Group’s portfolio of 372 stores (2016: 351 stores). The appropriateness
and completeness of onerous lease provisions (£1.7 million) and dilapidation provisions (£2.2 million) in relation to
those stores is judgemental as they include an assessment of the likely future periods of which leasehold properties
may be vacant and estimates of future costs of making good dilapidations.
Due to the size of the Group’s property portfolio and the sensitivity of the assumptions, property provisions were
considered to be an area for potential fraud and one which had the most significant impact on the audit; we
therefore identified it as a key audit matter.
Property provisions are included within the key sources of estimation uncertainty within note 2, and the balance
sheet provisions are disclosed in note 20.
How the scope
of our audit
responded to the
key audit matter
We assessed the appropriateness and completeness of onerous lease and dilapidations provisions by challenging
management’s principal assumptions in identifying and providing for the Group’s at-risk properties, as well as the
overall policy applied to the provisions.
Our audit team included property specialists who assisted us in evaluating management’s estimates, for example,
those relating to the length of time anticipated to exit onerous lease arrangements on vacant or loss-making stores
as well as recalculating provisions required on a sample basis.
We also challenged management’s assumptions in relation to the calculation of onerous leases at loss-making
stores by reviewing management’s track record of returning such stores to profit and the period of time management
assume will take to exit the property where relevant.
Furthermore, we challenged management’s assumptions regarding the calculation of the dilapidations provision,
including validating property information back to the original lease documentation and agreeing dilapidation
charges historically incurred to third party sources. In performing this work, we utilised our specialists to assess
whether the provisions are appropriately discounted.
Key observations
Based on the work performed we have concluded that the provisions held at year end in relation to onerous leases
and dilapidations are reasonable.
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Topps Tiles Plc Annual Report and Accounts for the 52 week period ended 30 September 2017 OUR FINANCIALS
INDEPENDENT AUDITORS’ REPORT
OUR APPLICATION OF MATERIALITY
We define materiality as the magnitude of misstatement in the financial statements that makes it probable that the economic decisions of a
reasonably knowledgeable person would be changed or influenced. We use materiality both in planning the scope of our audit work and
in evaluating the results of our work.
Based on our professional judgement, we determined materiality for the financial statements as a whole as follows:
Group
materiality
Basis for
determining
materiality
Rationale for
the benchmark
applied
£867,000 (2016: £1,000,000)
5.1% of pre-tax profit (2016: 5.0%)
Pre-tax profit is a key performance measure of the business for users of the financial statements
PBT £16,999k
PBT
Group materiality
Group materiality
£867k
Audit Committee
reporting threshold
£43k
There are no account balances, classes of transactions or disclosures where a lower materiality threshold has been applied.
We agreed with the Audit Committee that we would report to the Committee all audit differences in excess of £43,000 (2016:
£20,000), as well as differences below that threshold that, in our view, warranted reporting on qualitative grounds. The increase in our
reporting threshold is to align with market practice and was agreed with the Audit Committee. We also reported to the Audit Committee
on disclosure matters that we identified when assessing the overall presentation of the financial statements.
AN OVERVIEW OF THE SCOPE OF OUR AUDIT
Our Group audit was scoped by obtaining an understanding of the Group and its environment, including Group-wide controls, and by
assessing the risks of material misstatement at the Group level.
Given the nature of the Group’s corporate structure, which contains one main external trading entity and all evidence relating to each
subsidiary being compiled at the Group’s head office, we performed an audit covering all of the Group’s trading components, with the
exception of Parkside Ceramics Limited, which was acquired on 31 August 2017, and the dormant components within the Group. At the
Group level, we performed an audit on the acquisition accounting for Parkside Ceramics Limited to Group materiality.
Our full scope audit procedures covered 99.9% of revenue (2016: 100%), 100.2% of pre-tax profit, offset by losses on consolidation
elsewhere in the Group (2016: 100%), and 97.7% of net assets (2016: 100%).
Our audit work was executed at levels of materiality applicable to each individual entity which were lower than Group materiality and
ranged from £5,000 to £858,000 (2016: £5,000 to £900,000).
At the parent entity level we also tested the consolidation process and carried out analytical procedures to confirm our conclusion that there
were no significant risks of material misstatement of the aggregated financial information of the remaining components not subject to audit
or audit of specified account balances.
As part of the inventory count programme, alongside attendance at the Group’s main warehouse, members of the audit team attended
16 (2016: 16) of the Group’s stores as part of their consideration of the controls around revenue, inventory, inventory count procedures
and physical asset verification. This programme of visits was designed so that the audit team visited different store locations compared to
previous years depending upon risks identified in conjunction with the work performed by Internal Audit.
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77
Topps Tiles Plc Annual Report and Accounts for the 52 week period ended 30 September 2017 Independent Auditor’s Report to
the Members of Topps Tiles Plc
OTHER INFORMATION
The Directors are responsible for the other information. The other information comprises the
information included in the Annual Report, other than the financial statements and our auditor’s
report thereon.
We have nothing to report
in respect of these matters.
Our opinion on the financial statements does not cover the other information and, except to the
extent otherwise explicitly stated in our report, we do not express any form of assurance conclusion
thereon.
In connection with our audit of the financial statements, our responsibility is to read the other
information and, in doing so, consider whether the other information is materially inconsistent
with the financial statements or our knowledge obtained in the audit or otherwise appears to be
materially misstated.
If we identify such material inconsistencies or apparent material misstatements, we are required
to determine whether there is a material misstatement in the financial statements or a material
misstatement of the other information. If, based on the work we have performed, we conclude that
there is a material misstatement of this other information, we are required to report that fact.
In this context, matters that we are specifically required to report to you as uncorrected material
misstatements of the other information include where we conclude that:
• Fair, balanced and understandable – the statement given by the Directors that they consider the
Annual Report and financial statements taken as a whole is fair, balanced and understandable
and provides the information necessary for shareholders to assess the Group’s performance,
business model and strategy, is materially inconsistent with our knowledge obtained in the audit;
or
• Audit Committee reporting – the section describing the work of the Audit Committee does not
appropriately address matters communicated by us to the Audit Committee; or
• Directors’ statement of compliance with the UK Corporate Governance Code – the parts of the
Directors’ statement required under the Listing Rules relating to the Company’s compliance with
the UK Corporate Governance Code containing provisions specified for review by the auditor
in accordance with Listing Rule 9.8.10R(2) do not properly disclose a departure from a relevant
provision of the UK Corporate Governance Code.
RESPONSIBILITIES OF DIRECTORS
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, and for such internal control as the Directors determine is necessary
to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error.
In preparing the financial statements, the Directors are responsible for assessing the Group’s and the parent Company’s ability to continue
as a going concern, disclosing as applicable, matters related to going concern and using the going concern basis of accounting unless
the Directors either intend to liquidate the Group or the parent Company or to cease operations, or have no realistic alternative but to do
so.
AUDITOR’S RESPONSIBILITIES FOR THE AUDIT OF THE FINANCIAL STATEMENTS
Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement,
whether due to fraud or error, and to issue an auditor’s report that includes our opinion. Reasonable assurance is a high level of assurance,
but is not a guarantee that an audit conducted in accordance with ISAs (UK) will always detect a material misstatement when it exists.
Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be
expected to influence the economic decisions of users taken on the basis of these financial statements.
A further description of our responsibilities for the audit of the financial statements is located on the Financial Reporting Council’s website
at: www.frc.org.uk/auditorsresponsibilities. This description forms part of our auditor’s report.
USE OF OUR REPORT
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.
78
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Topps Tiles Plc Annual Report and Accounts for the 52 week period ended 30 September 2017 OUR FINANCIALS
INDEPENDENT AUDITORS’ REPORT
REPORT ON OTHER LEGAL AND REGULATORY REQUIREMENTS
OPINIONS 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.
In our opinion, based on the work undertaken in the course of the audit:
• 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; and
• the Strategic Report and the Directors’ Report have been prepared in accordance with applicable legal requirements.
In the light of the knowledge and understanding of the Group and of the parent Company and their environment obtained in the course of
the audit, we have not identified any material misstatements in the Strategic Report or the Directors’ Report.
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 nothing to Report
in respect of these matters.
• 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.
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.
We have nothing to Report
in respect of these matters.
OTHER MATTERS
AUDITOR TENURE
Following the recommendation of the Audit Committee, we were appointed by the Board of Directors on 1 August 2003 to audit the
financial statements for the period ending 27 September 2003 and subsequent financial periods. The period of total uninterrupted
engagement including previous renewals and reappointments of the firm is 15 years, covering the periods ending 27 September 2003 to
30 September 2017.
CONSISTENCY OF THE AUDIT REPORT WITH THE ADDITIONAL REPORT TO THE AUDIT COMMITTEE
Our audit opinion is consistent with the additional Report to the Audit Committee we are required to provide in accordance with ISAs (UK).
DAMIAN SANDERS, FCA (Senior statutory auditor)
for and on behalf of Deloitte LLP
Statutory Auditor
Manchester, United Kingdom
28 November 2017
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79
Topps Tiles Plc Annual Report and Accounts for the 52 week period ended 30 September 2017 Consolidated Statement of Financial Performance
FOR THE 52 WEEKS ENDED 30 SEPTEMBER 2017
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
Investment revenue
Finance costs
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
30 September
2017
£’000
52 weeks
ended
1 October
2016
£’000
Notes
3
211,848
214,994
(82,473)
(81,825)
129,375
133,169
(4,972)
(80,006)
(7,724)
(10,046)
(77,113)
(6,489)
(14,254)
(13,887)
(4,530)
17,889
24
(914)
16,999
(3,568)
13,431
(4,561)
21,073
85
(1,176)
19,982
(4,451)
15,531
6.98p
6.86p
8.05p
7.82p
7
7
5
8
27
10
Consolidated Statement of Comprehensive Income
FOR THE 52 WEEKS ENDED 30 SEPTEMBER 2017
Profit for the period and total comprehensive income
Total comprehensive income for the period attributable to equity holders of the Parent Company
52 weeks
ended
30 September
2017
£’000
13,431
13,431
52 weeks
ended
1 October
2016
£’000
15,531
15,531
80
25632.02 13 December 2017 11:33 AM Proof6
Topps Tiles Plc Annual Report and Accounts for the 52 week period ended 30 September 2017 OUR FINANCIALS
CONSOLIDATED STATEMENT OF FINANCIAL PERFORMANCE
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
Consolidated Statement of Financial Position
AS AT 30 SEPTEMBER 2017
Non-current assets
Goodwill
Intangible assets
Property, plant and equipment
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
Deferred tax liabilities
Provisions
Total liabilities
Net assets
Equity
Share capital
Share premium
Own shares
Merger reserve
Share-based payment reserve
Capital redemption reserve
Retained losses
Total equity
Notes
2017
£’000
2016
£’000
11
12
13
15
16
17
20
18
20
20
21
22
23
24
25
26
27
1,096
429
54,342
55,867
29,502
6,502
7,501
43,505
99,372
245
–
51,619
51,864
25,667
6,708
10,228
42,603
94,467
(32,500)
(33,108)
(2,375)
(1,170)
(4,004)
(1,448)
(36,045)
(38,560)
7,460
4,043
(34,923)
(34,807)
(1,071)
(3,780)
(709)
(2,846)
(75,819)
(76,922)
23,553
17,545
6,548
2,487
(4,411)
(399)
3,921
20,359
(4,952)
23,553
6,539
2,473
(4,411)
(399)
4,280
20,359
(11,296)
17,545
The accompanying notes are an integral part of these financial statements.
The financial statements of Topps Tiles Plc, registered number 3213782, on pages 81 to 84 were approved by the Board of Directors
and authorised for issue on 28 November 2017. They were signed on its behalf by:
MATTHEW WILLIAMS
ROB PARKER
DIRECTORS
25632.02 13 December 2017 11:33 AM Proof6
81
Topps Tiles Plc Annual Report and Accounts for the 52 week period ended 30 September 2017 Consolidated Statement of Changes in Equity
FOR THE 52 WEEKS ENDED 30 SEPTEMBER 2017
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
Balance at 3 October 2015
6,457
1,906
(630)
(399)
2,820
20,359 (19,715)
10,798
Profit and total comprehensive income
for the period
Issue of share capital
Dividends
Own shares purchased in the period
Own shares issued in the period
Credit to equity for equity-settled share
based payments
Deferred tax on share-based payment
transactions
–
82
–
–
–
–
–
–
567
–
–
–
–
–
–
–
–
(4,415)
634
–
–
–
–
–
–
–
–
–
–
(7)
–
–
–
1,467
–
–
–
–
–
–
–
–
15,531
15,531
–
642
(6,296)
(6,296)
–
(4,415)
(634)
–
448
1,915
(630)
(630)
Balance at 1 October 2016
6,539
2,473
(4,411)
(399)
4,280
20,359
(11,296)
17,545
Profit and total comprehensive income
for the period
Issue of share capital
Dividends
Own shares purchased in the period
Own shares issued in the period
Debit to equity for equity-settled share-
based payments
Deferred tax on share-based payment
transactions
–
9
–
–
–
–
–
–
14
–
–
–
–
–
–
–
–
(8)
8
–
–
–
–
–
–
–
–
–
–
–
–
–
–
(359)
–
–
–
–
–
–
–
–
13,431
13,431
–
23
(6,924)
(6,924)
–
(8)
3
(8)
–
(356)
(158)
(158)
Balance at 30 September 2017
6,548
2,487
(4,411)
(399)
3,921
20,359
(4,952)
23,553
82
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Topps Tiles Plc Annual Report and Accounts for the 52 week period ended 30 September 2017 OUR FINANCIALS
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
CONSOLIDATED CASH FLOW STATEMENT
Consolidated Cash Flow Statement
FOR THE 52 WEEKS ENDED 30 SEPTEMBER 2017
Cash flow from operating activities
Profit for the period
Taxation
Finance costs
Investment revenue
Group operating profit
Adjustments for:
Depreciation of property, plant and equipment
Loss on disposal of property, plant and equipment
Share option (credit)/charge
Decrease in trade and other receivables
(Increase)/decrease in inventories
Increase/(decrease) 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
Acquisition of subsidiary, net of cash acquired
Purchase of own shares
Net cash used in investment activities
Financing activities
Dividends paid
Proceeds from issue of share capital
Drawdown of bank loans
Repayment of bank loans
Net cash used in financing activities
Net decrease in cash and cash equivalents
Cash and cash equivalents at beginning of period
Cash and cash equivalents at end of period
52 weeks
ended
30 September
2017
£’000
52 weeks
ended
1 October
2016
£’000
13,431
3,568
914
(24)
15,531
4,451
1,176
(85)
17,889
21,073
6,544
589
(359)
324
(3,587)
752
22,152
(1,985)
(5,015)
15,152
5,832
152
1,701
1,334
1,740
(1,916)
29,916
(1,045)
(4,648)
24,223
24
84
(10,160)
(10,577)
303
(1,137)
–
–
–
(4,383)
(10,970)
(14,876)
(6,924)
(6,296)
15
5,000
(5,000)
(6,909)
(2,727)
10,228
7,501
613
–
(10,000)
(15,683)
(6,336)
16,564
10,228
25632.02 13 December 2017 11:33 AM Proof6
83
Topps Tiles Plc Annual Report and Accounts for the 52 week period ended 30 September 2017 Notes to the Financial Statements
FOR THE 52 WEEKS ENDED 30 SEPTEMBER 2017
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 45. The nature of the Group’s operations and its principal activity are set out in the Directors’ Report on page 50.
These financial statements are presented in pounds sterling because that is the currency of the primary economic environment in which the
Group operates.
ADOPTION OF NEW AND REVISED STANDARDS
In the current period, there were no new or revised standards and interpretations adopted that have a material impact on the financial
statements.
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 IFRS 10, IFRS 12 and IAS 28 (Dec 2014) – Investment Entities: Applying the Consolidation Exception
Amendments to IFRS 11 (May 2014) – Accounting for Acquisitions of Interests in Joint Operations
Amendments to IAS 1 (Dec 2014) – Disclosure Initiative
Amendments to IAS 16 and IAS 38 (May 2014) – Clarification of Acceptable Methods of Depreciation and Amortisation
Amendments to IAS 16 and IAS 41 (Jun 2014) – Agriculture: Bearer Plants
Amendments to IAS 27 (Aug 2014) – Equity Method in Separate Financial Statements
Annual Improvements to IFRSs: 2012-2014 Cycle (Sept 2014) – Annual Improvements to IFRSs: 2012-2014 Cycle
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):
Amendments to IAS 7 (Jan 2016) – Disclosure Initiative
Amendments to IAS 12 (Jan 2016) – Recognition of Deferred Tax Assets for Unrealised Losses
Annual Improvements to IFRSs: 2014-16 Cycles (Dec 2016) – Annual Improvements to IFRSs: 2014-16 Cycle – IFRS 12 Amendments
IFRS 9 – Financial Instruments
IFRS 15 – Revenue from Contracts with Customers
Clarifications to IFRS 15 (Apr 2016) – Clarifications to IFRS 15 Revenue from Contracts with Customers
IFRIC 22 – Foreign Currency Transactions and Advance Consideration
Amendments to IFRS 2 (Jun 2016) – Classification and Measurement of Share-based Payment Transactions
Amendments to IFRS 4 (Sept 2016) – Applying IFRS 9 Financial Instruments with IFRS 4 Insurance Contracts
Amendments to IAS 40 (Dec 2016) – Transfers of Investment Property
Annual Improvements to IFRSs: 2014-16 Cycle (Dec 2016) – Annual Improvements to IFRSs: 2014-16 Cycle – IFRS 1 and IAS 28
Amendments
Amendments to IFRS 10 and IAS 28 (Sept 2014) – Sale or Contribution of Assets between an Investor and its Associate or Joint Venture
IFRIC 23 – Uncertainty over Income Tax Treatments
Amendments to IFRS 9 (Oct 2017) – Prepayment Features with Negative Compensation
Amendments to IAS 28 (Oct 2017) – Long-term Interests in Associates and Joint Ventures
IFRS 17 – Insurance Contracts
IFRS 9 – Management do not expect this to have a material impact but an exercise is ongoing to quantify the impact
84
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Topps Tiles Plc Annual Report and Accounts for the 52 week period ended 30 September 2017 OUR FINANCIALS
NOTES TO THE FINANCIAL STATEMENTS
1 GENERAL INFORMATION CONTINUED
IFRS 15 – The core principle of IFRS 15 is that an entity recognises revenue to depict the transfer of promised goods or services to
customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods and services.
The Group does not expect the introduction of IFRS 15 to significantly affect the Group’s approach to recognition of revenue. The Group’s
revenue streams are not considered particularly complex in nature and revenue will continue to be recognised once the risk and reward of
ownership of goods sold by the Group is transferred to the customer.
IFRS 16 – Operating Leases, will have a material impact on the Group, with all of its operating leases (note 28) being recognised on
the balance sheet with a corresponding right to use the asset being recognised. Rental costs in the income statement will be replaced by
interest and depreciation charges and will therefore impact the Group’s profit. It has been noted that the profile of the overall expense
in the income statement will change as the interest expense will be more front-loaded compared to a straight-line operating lease rental.
Following an initial impact assessment, management has concluded that the most significant items that are currently classified as operating
leases that will be recognised in the financial statements in accordance with the new standard are the Group’s property leases. It is not
currently practical to provide a reasonable financial estimate of the effect of the new standard until the full implementation of the project
has been concluded. The Group will continue to monitor the practical interpretation of the new leasing standard within the retail sector
prior to full implementation.
The Directors anticipate that the adoption of the remaining standards and interpretations in future periods will have no material impact on
the financial statements of the Group.
2 ACCOUNTING POLICIES
The principal accounting policies adopted are set out below.
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 goods and services.
B) GOING CONCERN
When considering the going concern test, the Board reviews several factors including a detailed review of the above risks and
uncertainties, the Group’s forecast covenant and cash headroom against lending facilities, and management’s current expectations (see
Strategic Report for further details). As a result of this review 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 considers it appropriate to prepare
the financial statements on the going concern basis.
C) BUSINESS COMBINATIONS
Acquisition of subsidiaries and businesses are accounted for using the acquisition method. The consideration transferred in a business
combination is measured at fair value, which is calculated as the sum of the acquisition-on date fair values of assets transferred by the
Group, liabilities incurred by the Group to the former owners of the acquisition and the equity interest issued by the Group in exchange for
control of the acquisition. Acquisition-related costs are recognised in the profit or loss as incurred.
At the acquisition date, the identifiable assets acquired and the liabilities assumed are recognised at their fair value, except that:
• deferred tax assets or liabilities and assets or liabilities related to employee benefit arrangements are recognised and measured in
accordance with IAS 12 Income Taxes and IAS 19 Employee Benefits respectively; and
• assets that are classified as held for sale in accordance with IFRS 5 Non-current Assets Held for Sale and Discontinued Operations are
measured in accordance with that Standard.
Contingent consideration is recognised at fair value at the date of acquisition. Subsequent changes in contingent consideration which has
been classified as an asset or liability which does not result from a measurement period adjustment is accounted for in accordance with
IAS 39 where the asset or liability is a financial instrument, and in accordance with IAS 37 in all other cases.
D) 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.
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Topps Tiles Plc Annual Report and Accounts for the 52 week period ended 30 September 2017 Notes to the Financial Statements
FOR THE 52 WEEKS ENDED 30 SEPTEMBER 2017
2 ACCOUNTING POLICIES CONTINUED
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.
E) 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 Business Review, references to 2017 mean "at 30 September 2017" or the 52
weeks then ended; references to 2016 mean "at 1 October 2016" or the 52 weeks then ended.
F) 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.
G) 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 on the collection or delivery of goods, when all the following conditions are satisfied:
• the Group has transferred to the buyer the significant risks and rewards of ownership of the goods, being the date goods are collected
from store or received by the customers;
• 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.
The level of sales returns is closely monitored by management and provided for when management considers them to be significant.
Sales of goods that result in award credits for customers, under the Company’s Trader Loyalty Scheme, are accounted for as multiple
element revenue transactions and the fair value of the consideration received or receivable is allocated between the goods supplied and
the award credits granted. The consideration allocated to the award credits is measured by reference to their fair value being the amount
for which the award credits should be sold separately. Such consideration is not recognised as revenue at the time of the initial sale
transaction, but is deferred and recognised as revenue when the award credits are redeemed and the Company’s obligations have been
fulfilled.
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.
86
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Topps Tiles Plc Annual Report and Accounts for the 52 week period ended 30 September 2017 OUR FINANCIALS
NOTES TO THE FINANCIAL STATEMENTS
2 ACCOUNTING POLICIES CONTINUED
H) INTANGIBLE ASSETS ACQUIRED IN A BUSINESS COMBINATION
Intangible assets acquired in a business combination and recognised separately from goodwill are initially recognised at the fair value at
the acquisition date (which is regarded as their cost).
Subsequent to initial recognition, intangible assets acquired in a business combination are reported at costs less accumulated
impairment losses.
Separately identifiable intangible assets are amortised over their useful economic lives.
I) PROPERTY, PLANT & 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 50 years on a straight-line basis
Fixtures and fittings
over 10 years, except for the following: four years for computer equipment or five years for
display stands, as appropriate
Motor vehicles
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.
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.
J) IMPAIRMENT OF TANGIBLE AND INTANGIBLE ASSETS
At each period end, the Group reviews the carrying amounts of its tangible and intangible 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.
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 revalued 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.
K) INVENTORIES
Inventories are stated at the lower of cost and net realisable value and relate solely to finished goods for resale, net of supplier rebates.
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.
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Topps Tiles Plc Annual Report and Accounts for the 52 week period ended 30 September 2017 Notes to the Financial Statements
FOR THE 52 WEEKS ENDED 30 SEPTEMBER 2017
2 ACCOUNTING POLICIES CONTINUED
L) 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.
M) FOREIGN CURRENCY
The individual financial statements of each Group company are presented in pounds sterling (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 the 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).
N) 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 or a provision has been made for an onerous lease. 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.
The Group provides for the unavoidable costs prior to lease termination or sub-lease relating to onerous leases. Dilapidation costs are
provided for against all leasehold properties across the entire estate.
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NOTES TO THE FINANCIAL STATEMENTS
2 ACCOUNTING POLICIES CONTINUED
O) INVESTMENTS
Fixed asset investments are shown at cost less provision for impairment.
P) 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 statement of financial position.
Q) FINANCE COSTS
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.
R) 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 is designated as at FVTPL. 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.
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Topps Tiles Plc Annual Report and Accounts for the 52 week period ended 30 September 2017 Notes to the Financial Statements
FOR THE 52 WEEKS ENDED 30 SEPTEMBER 2017
2 ACCOUNTING POLICIES CONTINUED
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 50 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.
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 INSTRUMENTS
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 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.
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NOTES TO THE FINANCIAL STATEMENTS
2 ACCOUNTING POLICIES CONTINUED
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 to manage its foreign currency risk. 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.
S) 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 Sharesave 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.
T) TRADE PAYABLES
Trade payables are initially measured at fair value and are subsequently measured at amortised cost, using the effective interest
rate method.
U) OPERATING PROFIT
Operating profit is stated after charging/(crediting) restructuring costs but before property disposals, investment income and finance costs.
V) 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.
W) SUPPLIER INCOME
Amounts receivable from suppliers are initially held on the balance sheet within the cost of inventory and recognised within the income
statement once the contractual terms of the supplier agreements are met and the corresponding inventory has been sold.
Volume rebates and price discounts are recognised in the income statement as a reduction in cost of sales, in line with the recognition of
the sale of a product.
X) 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 Directors have concluded that there are no critical areas of accounting judgement in the application of the Group’s accounting policies
in the current period.
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Topps Tiles Plc Annual Report and Accounts for the 52 week period ended 30 September 2017 Notes to the Financial Statements
FOR THE 52 WEEKS ENDED 30 SEPTEMBER 2017
2 ACCOUNTING POLICIES CONTINUED
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:
PROPERTY PROVISIONS
Onerous lease provision – During the period the Group has continued to review the performance of its store portfolio, which has resulted
in one further store being exited before its lease terms had expired (2016: seven 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 sub-lease. 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.
Property provisions are discounted to a present value by applying a discount rate consistent with market conditions at the reporting date.
Discount rates used and sensitivity of the discount rate is disclosed in note 20.
3 REVENUE
An analysis of Group revenue is as follows:
Revenue from the sale of goods
Total revenue
52 weeks
ended
30 September
2017
£’000
211,848
211,848
52 weeks
ended
1 October
2016
£’000
214,994
214,994
Investment revenue represents bank interest receivable. There are no other gains recognised in respect of loans and receivables.
The Group has one reportable segment in accordance with IFRS 8 – Operating Segments, which is the Topps Tiles stores and online
business segment. The Group’s Board is considered the chief operating decision maker. The Board receives monthly financial information
at this level and uses this information to monitor the performance of the Topps Tiles stores and online business segment, allocate resources
and make operational decisions. Internal reporting focuses on the Group as a whole and does not identify any further individual segments.
All revenue is derived from sales in the UK and is from one class of business.
4 ACQUISITION OF SUBSIDIARIES
The Group acquired 100% of the issued share capital of Parkside Ceramics Limited on 31 August 2017. The acquisition of Parkside
Ceramics Limited gives the Group greater coverage in the commercial tile market and allows the Group to utilise economies of scale to
create additional value and create further synergies.
The Group performed a purchase price allocation exercise on Parkside Ceramics Limited to restate assets and liabilities at their fair value.
Intangible assets were recognised in relation to the Parkside Ceramics brand and customer relationships.
The contingent consideration is estimated based on performance conditions in place for Parkside Ceramics Limited over the next
12 months.
The Group incurred £169,000 of cost in relation to acquisition activity during the year.
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Topps Tiles Plc Annual Report and Accounts for the 52 week period ended 30 September 2017 4 ACQUISITION OF SUBSIDIARIES CONTINUED
The fair value of the net assets acquired and liabilities assumed at the acquisition date were:
OUR FINANCIALS
NOTES TO THE FINANCIAL STATEMENTS
Fair value
of net assets
required
£’000
Property, plant and equipment
Inventories
Trade and other receivables
Trade and other payables
Other financial liabilities
Corporation tax
Deferred tax
Cash and cash equivalents
Brand valuation
Customer relationships valuation
Fair value of assets acquired
Cash consideration
Contingent consideration*
Total consideration
Goodwill
* Contingent consideration is valued at fair value based on forecast attainment of performance conditions associated with the payment of the contingent consideration.
The net cash outflow in the cash flow statement is as follows:
Cash consideration
Cash acquired
Net cash outflow in the cash flow statement
Since the date of control, the following amounts have been included within the Group’s financial statements for the period:
Revenue
Loss before tax
45
248
117
(347)
(12)
11
(35)
128
229
200
584
1,265
170
1,435
851
£’000
1,265
(128)
1,137
£’000
124
38
Had the acquisition been included from the start of the period, £2,238,000 of revenue and £172,000 of loss before tax would have
been included in the Group’s financial statements.
There were no contingent liabilities acquired as a result of the above transaction.
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Topps Tiles Plc Annual Report and Accounts for the 52 week period ended 30 September 2017 Notes to the Financial Statements
FOR THE 52 WEEKS ENDED 30 SEPTEMBER 2017
5 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 loss
Property related provisions charged
Staff costs (see note 6)
Operating lease rentals
Write-down of inventories recognised as an expense
Cost of inventories recognised as an expense
During the year the business disposed of one freehold property (2016: no freehold property disposal).
Analysis of the 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
Taxation compliance services
Total non-audit fees
Total fees payable to the Company’s auditor
52 weeks
ended
30 September
2017
£’000
6,544
438
151
349
50,548
24,762
3,177
79,296
52 weeks
ended
30 September
2017
£’000
46
97
143
–
–
143
52 weeks
ended
1 October
2016
£’000
5,832
152
–
719
53,816
23,830
3,971
78,612
52 weeks
ended
1 October
2016
£’000
41
87
128
70
70
198
A description of the work of the Audit Committee is set out on page 48 and includes an explanation of how auditor objectivity and
independence is safeguarded when non-audit services are provided by the auditor.
94
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NOTES TO THE FINANCIAL STATEMENTS
6 STAFF COSTS
The average monthly number of persons and their full-time equivalents employed by the Group in the UK during the accounting period
(including Executive Directors) was:
Selling
Administration
Their aggregate remuneration comprised:
Wages and salaries (including LTIP, see note 29)
Social security costs
Other pension costs (see note 28b)
52 weeks
ended
30 September
2017
Number
employed
1,837
193
2,030
2017
£’000
52 weeks
ended
1 October
2016
Number
employed
1,778
199
1,977
2016
£’000
45,967
48,667
3,719
862
4,286
863
50,548
53,816
Details of Directors’ emoluments are disclosed on pages 63 to 71. The Group considers key management to be the Directors only.
Employee profit sharing of £5.0 million (2016: £10.0 million) is included in the above and comprises sales commission and bonuses.
7 INVESTMENT REVENUE AND FINANCE COSTS
Investment revenue
Bank interest receivable and similar income
Finance costs
Interest on bank loans and overdrafts
Other interest
Interest on underpaid tax†
52 weeks
ended
30 September
2017
£’000
52 weeks
ended
1 October
2016
£’000
24
24
(868)
(46)
–
(914)
85
85
(1,092)
–
(84)
(1,176)
† The Group has historically provided for tax on open HMRC enquires and a final payment of £2.9 million was made in October 2016 against these enquires. In the prior year
a £84,000 interest payment against these open enquiries was included in finance costs.
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.
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Topps Tiles Plc Annual Report and Accounts for the 52 week period ended 30 September 2017 Notes to the Financial Statements
FOR THE 52 WEEKS ENDED 30 SEPTEMBER 2017
8 TAXATION
Current tax – charge for the period
Current tax – adjustment in respect of previous periods
Deferred tax – charge for the period (note 20)
Deferred tax – adjustment in respect of previous periods (note 20)
52 weeks
ended
30 September
2017
£’000
3,504
(104)
125
43
52 weeks
ended
1 October
2016
£’000
3,906
148
302
95
3,568
4,451
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 19.5% (2016: 20.0%)
Expenses that are not deductible in determining taxable profit
Difference between IFRS 2 and corporation tax relief
Reduction in UK corporation tax rate
Tangible fixed assets which do not qualify for capital allowances
Adjustment in respect of prior periods
Tax expense for the period
52 weeks
ended
30 September
2017
£’000
52 weeks
ended
1 October
2016
£’000
16,999
3,315
19,982
3,997
57
67
8
182
(61)
58
137
(246)
261
244
3,568
4,451
In the period, the Group has recognised a corporation tax credit directly to equity of £3,254 (2016: £448,000) and a deferred tax
debit to equity of £157,921 (2016: £630,000) in relation to the Group’s share option schemes.
9 DIVIDENDS
Interim dividend for the period ended 30 September 2017 of £0.011 (2016: £0.010) per share
Proposed final dividend for the period ended 30 September 2017 of £0.023 (2016: £0.025) per share
52 weeks
ended
30 September
2017
£’000
2,116
4,425
52 weeks
ended
1 October
2016
£’000
1,930
4,803
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.
96
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Topps Tiles Plc Annual Report and Accounts for the 52 week period ended 30 September 2017 OUR FINANCIALS
NOTES TO THE 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 issued shares for basic earnings per share
Weighted average impact of treasury shares for basic earnings per share
Total weighted average number of shares for basic earnings per share
Weighted average number of shares under option
For diluted earnings per share
52 weeks
ended
30 September
2017
52 weeks
ended
1 October
2016
196,367,310 195,063,550
(4,038,495)
(2,131,436)
192,328,815 192,932,114
3,487,211
5,769,647
195,816,026 198,701,761
The calculation of the basic and diluted earnings per share used the denominators as shown above for both basic and diluted earnings
per share.
11 GOODWILL
Cost and carrying amount at 3 October 2015 and 1 October 2016
Acquisition of Parkside Ceramics Limited (note 4)
Cost and carrying amount at 30 September 2017
£’000
245
851
1,096
The balance of goodwill remaining is the carrying value that arose on the acquisition of Surface Coatings Limited in 1998 and Parkside
Ceramics Limited in 2017.
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 pre-tax rate of 13.2% (2016: 14.2%).
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 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.
No impairment has been identified in the current period as a result of the annual test for impairment.
12 INTANGIBLE ASSETS
Cost and carrying amount at 1 October 2016
Additions
Cost and carrying amount at 30 September 2017
Brand
£’000
–
229
229
Customer
relationships
£’000
–
200
200
Total
£’000
–
429
429
The intangible assets additions occurred on the acquisition of Parkside Ceramics Limited on 31 August 2017.
The brand is amortised over its estimated useful life of 10 years. Customer relationships are amortised over their estimated useful lives of
three years.
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Topps Tiles Plc Annual Report and Accounts for the 52 week period ended 30 September 2017 Notes to the Financial Statements
FOR THE 52 WEEKS ENDED 30 SEPTEMBER 2017
13 PROPERTY, PLANT AND EQUIPMENT
Cost
At 3 October 2015
Additions
Disposals
At 1 October 2016
Additions
Disposals
Reclassification of assets*
Acquisition of subsidiary undertakings
At 30 September 2017
Accumulated depreciation
At 3 October 2015
Charge for the period
Provision for impairment
Eliminated on disposals
At 1 October 2016
Charge for the period
Provision for impairment
Eliminated on disposals
Reclassification of assets*
At 30 September 2017
Carrying amount
At 30 September 2017
At 1 October 2016
Land and buildings
Freehold
£’000
Short
leasehold
£’000
Fixtures and
fittings
£’000
Motor
vehicles
£’000
Total
£’000
18,560
1,954
72,309
58
92,881
–
–
93
–
18,560
2,047
801
(231)
(142)
–
88
–
(686)
–
10,411
(691)
82,029
9,225
(413)
779
31
18,988
1,449
91,651
2,046
289
–
–
2,335
293
–
(86)
(6)
2,536
1,648
42,046
49
–
–
1,697
53
–
–
(680)
1,070
5,482
152
(691)
46,989
6,188
438
(104)
671
54,182
5
–
10,509
(691)
63
102,699
–
–
49
14
126
47
12
–
–
59
10
–
–
15
84
10,114
(644)
–
45
112,214
45,787
5,832
152
(691)
51,080
6,544
438
(190)
–
57,872
16,452
16,225
379
350
37,469
35,040
42
4
54,342
51,619
* During the period the Group undertook an asset reclassification exercise to reclassify some assets between asset categories.
Freehold land and buildings includes £4,104,000 of freehold land (2016: £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 (2016: £nil). Contractual commitments for the
acquisition of property, plant and equipment are detailed in note 28.
During the period, the Group has closed five stores in the UK. As the fixtures and fittings within these stores cannot be reused 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 of £268,000 (2016: £152,000) included within other operating expenses.
14 SUBSIDIARIES
A list of all subsidiaries, including the name, country of incorporation and proportion of ownership interest is given in note 3 to the
Company only financial statements.
98
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Topps Tiles Plc Annual Report and Accounts for the 52 week period ended 30 September 2017 15 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
OUR FINANCIALS
NOTES TO THE FINANCIAL STATEMENTS
2017
£’000
493
(37)
4,192
1,854
6,502
2016
£’000
681
(33)
4,001
2,059
6,708
The Directors consider that the carrying amount of trade and other receivables at 30 September 2017 and 1 October 2016
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 30 September 2017 amounted to £0.5 million (2016: £0.6 million).
These amounts mainly relate to sundry trade account generated sales. In relation to these sales, the average credit period taken is 49 days
(2016: 54 days) and no interest is charged on the receivables.
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.
Included in the Group’s trade receivable balance are debtors with a carrying amount of £70,000 (2016: £94,000) 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.
Ageing of past due but not impaired receivables:
Greater than 60 days
2017
£’000
70
2016
£’000
94
The allowance for doubtful debts was £37,000 by the end of the period (2016: £33,000). 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 £24,000 relating to individually impaired trade receivables (2016: £20,000) 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.
16 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
2017
£’000
5,232
919
1,350
7,501
2016
£’000
8,738
715
775
10,228
99
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Topps Tiles Plc Annual Report and Accounts for the 52 week period ended 30 September 2017 Notes to the Financial Statements
FOR THE 52 WEEKS ENDED 30 SEPTEMBER 2017
17 OTHER FINANCIAL LIABILITIES
TRADE AND OTHER PAYABLES
Amounts falling due within one year
Trade payables
Other payables
Accruals and deferred income
2017
£’000
2016
£’000
18,330
3,641
10,529
32,500
16,598
3,740
12,770
33,108
Trade payables and accruals principally comprise amounts outstanding for trade purchases and ongoing costs. The average credit period
taken for trade purchases is 53 days (2016: 49 days). No interest is charged on these payables.
The Directors consider that the carrying amount of trade payables at 30 September 2017 and 1 October 2016 approximates to their fair
value on the basis of discounted cash flow analysis.
18 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
2017
£’000
2016
£’000
34,807
34,691
2017
£’000
2016
£’000
–
35,000
–
35,000
(193)
–
–
35,000
35,000
(309)
34,807
34,691
116
116
34,923
34,807
The Directors consider that the carrying amount of the bank loan at 30 September 2017 and 1 October 2016 approximates to its fair
value since the amounts relate to floating rate debt.
The average interest rates paid on the loan were as follows:
Loans
2017
%
1.78
2016
%
2.19
The Group borrowings are arranged at floating rates, thus exposing the Group to cash flow interest rate risk.
The Group is part way through a five-year revolving credit facility of £50.0 million, expiring 31 May 2019. As at the financial period
end, £35.0 million of this facility was drawn (2016: £35.0 million). The loan facility contains financial covenants which are tested on a
bi-annual basis. The Group did not breach any covenants in the period.
At 30 September 2017, the Group had available £15.0 million (2016: £15.0 million) of undrawn committed banking facilities.
100
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Topps Tiles Plc Annual Report and Accounts for the 52 week period ended 30 September 2017 OUR FINANCIALS
NOTES TO THE FINANCIAL STATEMENTS
19 FINANCIAL INSTRUMENTS
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 2016. The
capital structure of the Group consists of debt, which includes the borrowings disclosed in note 18, cash and cash equivalents disclosed
in note 16 and equity attributable to equity holders of the parent, comprising issued capital, reserves and retained losses as disclosed in
notes 21 to 27.
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 2R to the financial statements.
CATEGORIES OF FINANCIAL INSTRUMENTS
Financial assets
Loans and receivables (including cash and cash equivalents)
Fair value through profit and loss
Financial liabilities
Fair value through profit and loss
Amortised cost
Carrying value and fair value
2017
£’000
2016
£’000
7,957
10,876
–
342
124
–
53,377
51,404
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.
MARKET RISK
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 forward foreign exchange contracts to hedge the exchange rate risk arising on the import of goods.
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
Assets
Liabilities
2017
£’000
1,357
927
2016
£’000
781
725
2017
£’000
3,139
866
2016
£’000
3,032
1,215
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Topps Tiles Plc Annual Report and Accounts for the 52 week period ended 30 September 2017
Notes to the Financial Statements
FOR THE 52 WEEKS ENDED 30 SEPTEMBER 2017
19 FINANCIAL INSTRUMENTS CONTINUED
FOREIGN CURRENCY SENSITIVITY ANALYSIS
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. Ten per cent 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
2017
£’000
162
6
(198)
(7)
2016
£’000
205
45
(250)
(55)
2015
£’000
197
44
(241)
(54)
CURRENCY DERIVATIVES
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
2017
£’000
10,142
2016
£’000
6,125
These arrangements are designed to address significant exchange exposures for the first half of 2018 and are renewed on a revolving
basis as required.
At 30 September 2017 the fair value of the Group’s currency derivatives is a loss of £124,417 within accruals (note 17) (2016: gain of
£341,917 in prepayments (note 15)). These amounts are based on the market value of equivalent instruments at the balance sheet date.
Losses of £466,064 are included in cost of sales (2016: £225,260 gain).
INTEREST RATE RISK MANAGEMENT
The Group is exposed to interest rate risk as entities in the Group borrow funds at floating interest rates. Due to the reduced level of
floating rate borrowings and the current low level of interest rates, management have not deemed it necessary to implement measures that
would mitigate this risk. 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 analysis below has 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.
102
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Topps Tiles Plc Annual Report and Accounts for the 52 week period ended 30 September 2017 OUR FINANCIALS
NOTES TO THE FINANCIAL STATEMENTS
19 FINANCIAL INSTRUMENTS CONTINUED
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.
50 basis points increase
in interest rates
50 basis points decrease
in interest rates
2017
£’000
(181)
2016
£’000
(198)
2017
£’000
181
2016
£’000
198
CREDIT RISK MANAGEMENT
Credit risk refers to the risk that a counterparty will default on its contractual obligations, resulting in financial loss to the Group.
Management have 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 15.
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 borrowing facilities by continuously monitoring forecast and actual cash flows and matching the
maturity profiles of financial assets and liabilities.
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
1.73681% (2016: 1.77413%) 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.
2017
Non-interest bearing
Variable interest rate instruments
2016
Non-interest bearing
Variable interest rate instruments
Less than
1 month
£’000
21,971
58
Less than
1 month
£’000
20,337
59
1–3
months
£’000
–
114
1–3
months
£’000
–
117
3 months
to 1 year
£’000
–
512
3 months
to 1 year
£’000
–
521
1–5
years
£’000
–
35,454
1–5
years
£’000
–
36,157
Total
£’000
21,971
36,138
Total
£’000
20,337
36,854
The Group is financed through a £50 million (2016: £50 million) revolving credit facility, of which £35 million (2016: £35 million) was
utilised. At the balance sheet date the total unused amount of financing facilities was £15 million (2016: £15 million). The Group expects
to meet its other obligations from operating cash flows and proceeds of maturing financial assets.
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Topps Tiles Plc Annual Report and Accounts for the 52 week period ended 30 September 2017 Notes to the Financial Statements
FOR THE 52 WEEKS ENDED 30 SEPTEMBER 2017
19 FINANCIAL INSTRUMENTS CONTINUED
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.
2017
Foreign exchange forward contracts payments
Foreign exchange forward contracts receipts
2016
Foreign exchange forward contracts payments
Foreign exchange forward contracts receipts
Less than
1 month
£’000
(2,128)
2,141
Less than
1 month
£’000
(1,179)
1,305
1–3
months
£’000
(3,884)
3,837
1–3
months
£’000
(2,435)
2,611
3 months
to 1 year
£’000
(4,130)
4,040
3 months
to 1 year
£’000
(2,511)
2,567
1–5
years
£’000
–
–
1–5
years
£’000
–
–
5+
years
£’000
–
–
5+
years
£’000
–
–
Total
£’000
(10,142)
10,018
Total
£’000
(6,125)
6,483
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.
The fair values are therefore categorised as Level 2 (2016: 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).
20 PROVISIONS
Onerous lease provision
Business simplification provision
Dilapidations provision
Current
Non-current
At 1 October 2016
Created in the year
Utilisation of provision
Release of provision in the period
At 30 September 2017
104
2017
£’000
1,697
1,078
2,175
4,950
1,170
3,780
4,950
Business
simplification
provision
£’000
Onerous lease
provision
£’000
Dilapidations
provision
£’000
1,181
1,309
1,804
387
(490)
–
786
(398)
–
604
(192)
(41)
1,078
1,697
2,175
2016
£’000
1,309
1,181
1,804
4,294
1,448
2,846
4,294
Total
£’000
4,294
1,777
(1,080)
(41)
4,950
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Topps Tiles Plc Annual Report and Accounts for the 52 week period ended 30 September 2017 OUR FINANCIALS
NOTES TO THE FINANCIAL STATEMENTS
20 PROVISIONS CONTINUED
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 six financial periods. The business simplification provision relates to the decision to exit the Topps Clearance format and
relocation of the finance function to Leicester, resulting in redundancies and the subsequent closure of nine store locations and one support
office. The discount rate used to calculate the present value of property provisions is 7%. A 10% reduction in discount rate would lead to
an increase in property provisions of £75,000.
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
1,523
138
95
(263)
–
1,493
(55)
43
–
–
As at 3 October 2015
Charge to income
Charge in respect of previous
periods
Impact of rate change
Credit to equity
As at 1 October 2016
Charge/(credit) to income
Charge in respect of previous
periods
Charge to equity
Recognised on acquisition of
subsidiary
As at 30 September 2017
1,481
Share-based
payments
£’000
Exchange rate
differences
£’000
(1,353)
(166)
22
(22)
Rent free
£’000
(511)
511
–
105
630
(784)
181
–
158
–
(445)
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
Stock
provisions
£’000
Intangible
assets
£’000
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
Total
£’000
(319)
461
95
(158)
630
709
126
43
158
(38)
(38)
73
73
35
1,071
A reduction in the UK corporation tax rate from 21% to 20% (effective from 1 April 2015) was substantively enacted on 2 July 2013.
Further reductions to 19% (effective from 1 April 2017) and to 18% (effective 1 April 2020) were substantively enacted on 26 October
2015, and an additional reduction to 17% (effective 1 April 2020) was substantively enacted on 6 September 2016. This will reduce the
Company’s future current tax charge accordingly. The deferred tax liability at 1 October 2016 has been calculated based on these rates.
21 CALLED-UP SHARE CAPITAL
Issued and fully paid 196,437,298*(2016: 196,153,770*)
Ordinary shares of 3.33p each (2016: 3.33p)
Total
2017
£’000
6,548
6,548
2016
£’000
6,539
6,539
During the period the Group issued 254,998 (2016: 2,453,311) ordinary shares with a nominal value of £9,441 (2016: £81,712)
under share option schemes for an aggregate cash consideration of £15,631 (2016: £612,500).
* During the period £8,468 (2016: £4,415,000) of shares were purchased by Topps Tiles Employee Benefit Trust on behalf of the Group.
25632.02 13 December 2017 11:33 AM Proof6
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Topps Tiles Plc Annual Report and Accounts for the 52 week period ended 30 September 2017
Notes to the Financial Statements
FOR THE 52 WEEKS ENDED 30 SEPTEMBER 2017
22 SHARE PREMIUM
At start of the period
Premium on issue of new shares
At end of period
23 OWN SHARES
At start of the period
Acquired in the period
Disposed of on issue in the period
At end of the period
2017
£’000
2,473
14
2,487
2017
£’000
(4,411)
(8)
8
2016
£’000
1,906
567
2,473
2016
£’000
(630)
(4,415)
634
(4,411)
(4,411)
A subsidiary of the Group holds 4,038,495 (2016: 4,038,495) shares with a nominal value of £4,410,840 acquired for an average
price of £1.09 per share (2016: £4,410,863 acquired for an average price of £1.09 per share) and therefore these have been
classed as own shares.
24 MERGER RESERVE
At start and end of the period
2017
£’000
(399)
2016
£’000
(399)
The merger reserve arose on pre-2006 acquisitions. The Directors do not consider this to be distributable as at 30 September 2017
(2016: same).
25 SHARE-BASED PAYMENT RESERVE
At start of the period
(Debit)/credit to equity for equity-settled share-based payments
At end of the period
2017
£’000
4,280
(359)
3,921
2016
£’000
2,820
1,460
4,280
The share-based payment reserve has arisen on the fair valuation of save-as-you-earn schemes and long-term incentive plans. The Directors
consider this to be distributable as at 30 September 2017 (2016: same).
26 CAPITAL REDEMPTION RESERVE
At start and end of the period
2017
£’000
2016
£’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. The
Directors do not consider this to be distributable as at 30 September 2017 (2016: same).
106
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Topps Tiles Plc Annual Report and Accounts for the 52 week period ended 30 September 2017 OUR FINANCIALS
NOTES TO THE FINANCIAL STATEMENTS
27 RETAINED LOSSES
At 3 October 2015
Dividends (note 9)
Deferred and current tax on Sharesave scheme taken directly to equity
Own shares issued in the period
Net profit for the period
At 1 October 2016
Dividends (note 9)
Deferred and current tax on Sharesave scheme taken directly to equity
Own shares issued in the period
Net profit for the period
At 30 September 2017
28 FINANCIAL COMMITMENTS
A) CAPITAL COMMITMENTS
At the end of the period there were capital commitments contracted of £nil (2016: £45,000).
£’000
(19,715)
(6,296)
(182)
(634)
15,531
(11,296)
(6,924)
(155)
(8)
13,431
(4,952)
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 £862,000 (2016: £863,000). At the period end, the Group holds outstanding contributions of £142,669
(2016: £136,619).
C) LEASE COMMITMENTS
Minimum future sub-lease payments expected to be received under non-cancellable sub-leases amount to £2,509,000 (2016:
£3,715,000). 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 £24,762,316 (2016: £23,830,000)
which includes property service charges of £852,000 (2016: £732,000).
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
2017
2016
Land and
buildings
£’000
22,793
76,434
49,189
148,416
Other
£’000
1,319
2,093
194
3,606
Land and
buildings
£’000
22,601
71,957
51,083
145,641
Other
£’000
1,037
1,363
168
2,568
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 10 years and rentals are fixed for an average of five years (2016: five).
25632.02 13 December 2017 11:33 AM Proof6
107
Topps Tiles Plc Annual Report and Accounts for the 52 week period ended 30 September 2017 Notes to the Financial Statements
FOR THE 52 WEEKS ENDED 30 SEPTEMBER 2017
29 SHARE-BASED PAYMENTS
The Group operates seven share option schemes in relation to Group employees.
EMPLOYEE SHARE PURCHASE PLANS
Employee share purchase plans are open to almost all employees and provide for a purchase price equal to the average market price
over the three days prior to 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 thee or five year period.
Movements in share-based payment plan options are summarised as follows:
Outstanding at beginning of the period
Issued during the period
Expired during the period
Exercised during the period
Outstanding at end of the period
Exercisable at end of the period
2017
2016
Weighted
average
exercise price
£
1.14
0.70
1.07
Number of
share options
3,080,615
2,105,117
(1,623,808)
Number of
share options
2,969,105
2,098,318
(617,982)
(28,530)
0.54 (1,368,826)
3,533,394
378,847
0.91
0.98
3,080,615
8,372
Weighted
average
exercise price
£
0.63
1.27
1.05
0.45
1.14
0.43
The inputs to the Black-Scholes Model for the employee three-year Employee Share Purchase Plans issued in the year are as follows:
Three-year plan
Weighted average share price
Weighted average exercise price
Expected volatility
Expected life
Risk-free rate of interest
Dividend yield
— pence
— pence
— %
— years
— %
— %
83.25
70.00
29.22
3.00
0.41
4.20
Expected volatility was determined by calculating the historical volatility of the Group’s share price over the previous three years (2016:
three and 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.
108
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Topps Tiles Plc Annual Report and Accounts for the 52 week period ended 30 September 2017 OUR FINANCIALS
NOTES TO THE FINANCIAL STATEMENTS
29 SHARE-BASED PAYMENTS CONTINUED
LONG TERM INCENTIVE PLAN
Long Term Incentive Plans have been granted to senior management and have a vesting period of three years. Vesting is subject to
achievement of certain performance conditions.
Movements in Long Term Incentive Plan options are summarised as follows:
Outstanding at beginning of the period
Issued during the period
Expired during the period
Exercised during the period
Outstanding at end of the period
Exercisable at end of the period
2017
2016
Weighted
average
exercise price
£
–
–
–
–
–
–
Weighted
average
exercise price
£
–
–
–
–
–
–
Number of
share options
5,032,515
1,229,100
(113,041)
(1,084,485)
5,064,089
988,989
Number of
share options
5,064,089
1,752,568
(128,402)
(254,998)
6,433,257
988,989
Under the plan a number of share options were granted to senior management. These options will vest in December 2018 subject to the
achievement of certain performance criteria.
The total number of share options granted was 13,196 (2016: 1,138,647) and the fair value of these options was £10,786 (2016:
£1,674,835).
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
Dividend yield
— pence
— pence
— %
— years
— %
— %
88.00
nil
28.03
2.00
0.13
3.69
Expected volatility was determined by calculating the historical volatility of the Group’s share price over the previous three 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.
During the financial period, the Group granted 17,931 share options under the existing share option scheme due to vest in December
2017. The fair value of these options was £15,027.
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
Dividend yield
— pence
— pence
— %
— years
— %
— %
87.00
nil
30.54
1.00
0.00
3.74
During the financial period, the Group granted 1,721,441 share options under the existing share option scheme due to vest in December
2019. The fair value of these options was £1,355,996.
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109
Topps Tiles Plc Annual Report and Accounts for the 52 week period ended 30 September 2017 Notes to the Financial Statements
FOR THE 52 WEEKS ENDED 30 SEPTEMBER 2017
29 SHARE-BASED PAYMENTS CONTINUED
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
Dividend yield
— pence
— pence
— %
— years
— %
— %
88.00
nil
29.73
3.00
0.28
3.69
2020 LONG TERM INCENTIVE PLAN
Under the plan a number of share options were granted to management level employees across the Group. These options will vest in
December 2020 subject to the achievement of certain performance criteria.
Movements in 2020 Long Term Incentive Plan options are summarised as follows:
Outstanding at beginning of the period
Issued during the period
Expired during the period
Exercised during the period
Outstanding at end of the period
Exercisable at end of the period
2017
2016
Weighted
average
exercise price
£
–
–
–
–
–
–
Weighted
average
exercise price
£
–
–
–
–
–
–
Number of
share options
–
2,698,244
(94,497)
–
2,603,747
–
Number of
share options
2,603,747
955,217
(497,702)
–
3,061,262
–
During the financial period, the Group granted an additional 955,217 share options under the 2020 Long Term Incentive Plan share
option scheme due to vest in December 2020.
During the financial period, the Group granted an additional 134,000 share options under the 2020 Long Term Incentive Plan share
option scheme due to vest in December 2020. The fair value of these options was £101,726.
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
Dividend yield
— pence
— pence
— %
— years
— %
— %
88.00
nil
34.18
4.00
0.45
3.69
Expected volatility was determined by calculating the historical volatility of the Group’s share price over the previous three and five years
(2016: 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.
During the financial period, the Group granted an additional 120,500 share options under the 2020 Long Term Incentive Plan share
option scheme due to vest in December 2020. The fair value of these options was £85,715.
110
25632.02 13 December 2017 11:33 AM Proof6
Topps Tiles Plc Annual Report and Accounts for the 52 week period ended 30 September 2017 29 SHARE-BASED PAYMENTS CONTINUED
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
Dividend yield
— pence
— pence
— %
— years
— %
— %
OUR FINANCIALS
NOTES TO THE FINANCIAL STATEMENTS
82.50
nil
28.68
3.5
0.26
4.36
During the financial period, the Group granted an additional 695,717 share options under the 2020 Long Term Incentive Plan share
option scheme due to vest in December 2020. The fair value of these options was £588,695.
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
Dividend yield
— pence
— pence
— %
— years
— %
— %
96.75
nil
34.26
4.0
0.26
3.62
In total, the Group recognised a total revenue of £358,502 (2016: £1,827,021) relating to share-based payments.
30 RELATED PARTY TRANSACTIONS
S.K.M. Williams is a related party by virtue of his 10.6% shareholding (20,593,950 ordinary shares) in the Group’s issued share capital
(2016: 10.6% shareholding of 20,593,950 ordinary shares).
At 1 October 2017, S.K.M. Williams was the landlord of two properties leased to Multi Tile Limited, a trading subsidiary of Topps Tiles
Plc, for £114,000 (2016: three properties for £187,000) per annum.
No amounts were outstanding with S.K.M. Williams at 30 September 2017 (2016: £nil). The lease agreements on all properties are
operated on commercial arm’s length terms.
Transactions between the Company and its subsidiaries, which are related parties, have been eliminated on consolidation and are not
disclosed in this note, in accordance with the exemption available under IAS 24.
The remuneration of the Board of Directors, who are considered key management personnel of the Group, was £1.1 million (2016: £2.2
million) including share-based payments of £0.4 million (2016: £0.7 million). Further information about the remuneration of the individual
Directors is provided in the Remuneration Report on pages 54 to 71.
The Group’s defined contribution pension scheme is administered by Legal and General. During the year the Group made contributions of
£862,000 (2016: £863,000) and at year end the Group has outstanding contributions of £142,669 (2016: £136,619).
25632.02 13 December 2017 11:33 AM Proof6
111
Topps Tiles Plc Annual Report and Accounts for the 52 week period ended 30 September 2017 Company Balance Sheet
AS AT 30 SEPTEMBER 2017
Fixed assets
Investments
Current assets
Debtors due within 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
30 September
2017
£’000
52 weeks
ended
1 October
2016
£’000
Notes
3
4
5
6,7
7
7
7
7
7
3,396
2,320
51,106
1,083
47,615
–
(1,268)
50,921
54,317
6,548
2,487
4,455
20,359
6,200
14,268
54,317
(3,805)
43,810
46,130
6,539
2,473
4,814
20,359
6,200
5,745
46,130
The financial statements of Topps Tiles Plc, Companies House number 3213782, were approved by the Board of Directors on
28 November 2017 and signed on its behalf by:
MATTHEW WILLIAMS
ROB PARKER
DIRECTORS
112
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Topps Tiles Plc Annual Report and Accounts for the 52 week period ended 30 September 2017 OUR FINANCIALS
COMPANY BALANCE SHEET
NOTES TO THE COMPANY FINANCIAL STATEMENTS
Notes to the Company Financial Statements
FOR THE 52 WEEKS ENDED 30 SEPTEMBER 2017
1 BASIS OF ACCOUNTING
The Company meets the definition of a qualifying entity under FRS 100 Application of Financial Reporting Requirements issued by the FRC.
Accordingly, in the period ended 3 October 2015, the Company has changed its accounting framework from the previous UK GAAP to
Financial Reporting Standard 101 Reduced Disclosure Framework (FRS 101) issued by the Financial Reporting Council (FRC) and has, in
doing so, applied the requirements of IFRS 1.6-33 and related appendices. These financial statements have therefore been prepared in
accordance with FRS 101.
As permitted by FRS 101, the Company has taken advantage of the following disclosure exemptions available under that Standard:
i) The requirements of IFRS 7 Financial Instruments: Disclosures
ii) The requirement in paragraph 38 of IAS 1 Presentation of Financial Statements to present comparative information in respect of:
a) Paragraph 79(a)(iv) of IAS 1
b) Paragraph 73(e) of IAS 16 Property, Plant and Equipment
c) Paragraph 118(e) of IAS 38 Intangible Assets
iii) The requirements of IAS 7 Statement of Cash Flows
iv) The requirements of IAS 24 Related Party Disclosures to disclose related party transactions entered into between two or more members
of a group, provided that any subsidiary which is a party to the transaction is wholly owned by such a member
v) The requirements of paragraphs 10(d), 10(f), and 134 to 136 of IAS 1 Presentation of Financial Statements
vi) The requirements of paragraphs 30 and 31 of IAS 8 Accounting Policies, Changes in Accounting Estimates and Errors
Where relevant, equivalent disclosures have been given in the Group accounts of which the Company’s results are included.
The financial statements have been prepared under the historical cost convention. Comparative data is for the period ended 1 October
2016.
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 profit for the financial period ended 30 September 2017 of £15,447,000 (2016: £6,666,000).
The auditor’s remuneration for services to the Company was £46,000 for audit-related work (2016: £41,000 for audit-related work).
Fees relating to non-audit work totalled £nil (2016: £nil); see note 5 to the Group financial statements for further details.
The Company had no employees other than the Directors (2016: same), whose remuneration is detailed on page 63.
25632.02 13 December 2017 11:33 AM Proof6
113
Topps Tiles Plc Annual Report and Accounts for the 52 week period ended 30 September 2017 Notes to the Company Financial Statements
FOR THE 52 WEEKS ENDED 30 SEPTEMBER 2017
3 FIXED ASSET INVESTMENTS
At 1 October 2016
Movement in share options granted to employees
Acquisition of subsidiary
At 30 September 2017
£’000
2,320
(359)
1,435
3,396
The Company has investments in the following subsidiaries which affected the profits or net assets of the Group:
Subsidiary undertaking
Topalpha Limited*
Topalpha (Warehouse) Limited
Topalpha (Stoke) Limited
Tiles4less Limited*
Topps Tiles (UK) Limited
Topps Tiles Holdings Limited*
Topps Tile Kingdom Limited
Multi Tile Limited
Topps Tiles Distribution Ltd
Multi-Tile Distribution Limited
% of issued
shares held
Principal activity
100%
100%
100%
100%
100%
100%
100%
100%
Property management and investment
Property management and investment and provision of warehousing services
Property management and investment
Intermediate holding company
Retail and wholesale of ceramic tiles, wood flooring and related products
Intermediate holding company
Intermediate holding company
Retail and wholesale of ceramic tiles, wood flooring and related products
100% Wholesale and distribution of ceramic tiles, wood flooring and related products
100%
Intermediate holding company
Topps Tiles I.P Company Limited
100% Ownership and management of Group intellectual property
Topps Tiles Employee Benefit Trust*
Parkside Ceramics Limited*
* Held directly by Topps Tiles Plc
100%
100%
The investments are represented by ordinary shares.
Employee benefit trust
Retail and wholesale of ceramic tiles, wood flooring and related products
All undertakings are incorporated in Great Britain and are registered and operate in England and Wales.
The registered address of all of the above entities (excluding Parkside Ceramics Limited) is Thorpe Way, Grove Park, Enderby,
Leicestershire, LE19 1SU, United Kingdom.
The registered address of Parkside Ceramics Limited is 51 Highmeres Road, Thurmaston, Leicester, LE4 9LZ.
4 DEBTORS
Amounts falling due within one year:
Amounts owed by subsidiary undertakings
Other debtors
Prepayments and accrued income
2017
£’000
2016
£’000
51,080
47,598
–
26
3
14
51,106
47,615
114
25632.02 13 December 2017 11:33 AM Proof6
Topps Tiles Plc Annual Report and Accounts for the 52 week period ended 30 September 2017
OUR FINANCIALS
NOTES TO THE COMPANY FINANCIAL STATEMENTS
5 CREDITORS: AMOUNTS FALLING DUE WITHIN ONE YEAR
Bank loans and overdrafts
Trade and other creditors
Amounts owed to subsidiary undertakings
Accruals and deferred income
6 CALLED-UP SHARE CAPITAL
Issued and fully paid 196,437,298 (2016: 196,153,770) ordinary shares of 3.33p each (2016: 3.33p)
2017
£’000
–
106
65
1,097
1,268
2017
£’000
6,548
2016
£’000
857
12
72
2,864
3,805
2016
£’000
6,539
During the period 254,998 shares were purchased by Topps Tiles Employee Benefit Trust for £8,491 on behalf of the Group (2016:
4,139,000 shares – £4,415,000).
During the period the Group issued and allotted 283,528 (2016: 2,453,311) ordinary shares with a nominal value of £9,441 (2016:
£81,712) under share option schemes for an aggregate cash consideration of £15,631 (2016: £612,500).
7 CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
Company
Share
capital
£’000
Share
premium
£’000
Share-
based
payment
reserve
£’000
Capital
redemption
reserve
£’000
Other
reserves
£’000
Profit
and loss
account
£’000
Total
£’000
Balance at 3 October 2015
6,457
1,906
3,354
20,359
6,200
5,375
43,651
Profit for the period
Dividend paid to equity shareholders
Issue of new shares
Credit to equity for equity-settled share-based
payments
–
–
82
–
–
–
567
–
Balance at 1 October 2016
6,539
2,473
Profit for the period
Dividends
Issue of new shares
Debit to equity for equity-settled share-based
payments
–
–
9
–
–
–
14
–
–
–
(7)
1,467
4,814
–
–
–
(359)
–
–
–
–
–
–
–
–
6,666
6,666
(6,296)
(6,296)
–
–
642
1,467
20,359
6,200
5,745
46,130
–
–
–
–
–
–
–
–
15,447
15,447
(6,924)
(6,924)
–
–
23
(359)
Balance at 30 September 2017
6,548
2,487
4,455
20,359
6,200
14,268
54,317
At 30 September 2017, the Directors consider the other reserve of £6,200,000 to remain non-distributable.
The Directors consider £nil (2016: £nil) of profit and loss account reserves to be not distributable at 30 September 2017.
25632.02 13 December 2017 11:33 AM Proof6
115
Topps Tiles Plc Annual Report and Accounts for the 52 week period ended 30 September 2017 Additional Information
116
25632.02 13 December 2017 11:33 AM Proof6
Topps Tiles Plc Annual Report and Accounts for the 52 week period ended 30 September 2017 ADDITIONAL INFORMATION
CONTENTS
Five Year Record
Notice of Annual General Meeting
Explanatory Notes to the Notice of
Annual General Meeting
Summary of the principal features of the
Topps Tiles 2018 Sharesave Scheme
("Sharesave Scheme")
The Team
Store Locations
118
119
124
127
129
141
PICTURED
MonogeoTM Shard and Link porcelain
wall and floor tiles with HartleyTM White
porcelain wall and floor tile
117
25632.02 13 December 2017 11:33 AM Proof6
Topps Tiles Plc Annual Report and Accounts for the 52 week period ended 30 September 2017 Five Year Record
UNAUDITED
Company
Group revenue
Group operating profit
Profit before taxation
Shareholders’ funds (deficit)
Basic earnings per share
Dividend per share
Dividend cover
Average number of employees
Share price (period end)
52 weeks
ended
28 September
2013
£’000
52 weeks
ended
27 September
2014
£’000
52 weeks
ended
3 October
2015
£’000
52 weeks
ended
1 October
2016
£’000
52 weeks
ended
30 September
2017
£’000
177,849
195,237
212,221
214,994
211,848
13,845
10,601
(10,184)
4.76p
1.25p
3.81x
1,720
93.0p
18,186
16,691
843
6.49p
1.65p
3.93x
1,794
18,883
17,019
10,798
6.75p
2.34p
2.88x
1,915
21,073
19,982
17,545
8.05p
3.50p
2.30x
1,977
17,889
16,999
23,553
6.98p
3.40p
2.05x
2,030
105.0p
148.75p
112.25p
75.50p
All figures quoted are inclusive of continued and discontinued operations.
118
25632.02 13 December 2017 11:33 AM Proof6
Topps Tiles Plc Annual Report and Accounts for the 52 week period ended 30 September 2017 ADDITIONAL INFORMATION
FIVE YEAR RECORD
NOTICE OF ANNUAL GENERAL MEETING
Notice of Annual General Meeting
This notice of meeting is important and requires your immediate attention. If you are in any doubt as to
the contents of this document and/or the action you should take, you are recommended to seek personal
financial advice from your bank manager, stockbroker, solicitor, accountant or other independent financial
adviser authorised under the Financial Services and Markets Act 2000.
If you have sold or otherwise transferred all of your shares in the Company, please pass this document
and all accompanying documents to the purchaser or transferee, or to the stockbroker, bank or other agent
through whom the sale or transfer was effected so that they can pass these documents to the person who
now holds the shares.
NOTICE IS HEREBY GIVEN that the Annual General Meeting (the “Annual General Meeting”, the “AGM” or the “meeting”)
of Topps Tiles Plc (the “Company”) will be held at the Marriott Hotel, Smith Way, Grove Park, Enderby, Leicestershire LE19 1SW on
31 January 2018 at 10.00 a.m. for the following purposes:
ORDINARY BUSINESS
To consider and, if thought fit, pass the following resolutions 1 – 11 (inclusive) which will be proposed as Ordinary Resolutions:
1. To receive and adopt the Company’s Annual Report and Financial Statements for the financial period ended 30 September 2017
together with the last Directors’ Report, the last Directors’ Remuneration Report and the Auditors’ Report on those accounts and the
auditable part of the Directors’ Remuneration Report.
2. To declare a final dividend of 2.3 pence per ordinary share for the financial period ended 30 September 2017 payable on
2 February 2018 to shareholders who are on the register of members of the Company on 22 December 2017.
3. To approve the Directors’ Remuneration Report for the financial period ended 30 September 2017 as set out on pages 54 to 71
of the Company’s Annual Report and Financial Statements for that period (excluding the Directors’ Remuneration Policy set out on
pages 55 to 62).
4. To re-elect Matthew Williams as a Director of the Company.
5. To re-elect Robert Parker as a Director of the Company.
6. To re-elect Darren Shapland as a Director of the Company.
7. To re-elect Claire Tiney as a Director of the Company.
8. To re-elect Andrew King as a Director of the Company.
9. To re-elect Keith Down as a Director of the Company.
10. To reappoint Deloitte LLP as the auditor of the Company to hold office from the conclusion of this Annual General Meeting until the
conclusion of the next general meeting at which the Annual Report and Financial Statements are laid before the Company.
11. To authorise the Directors to determine the remuneration of the auditor.
SPECIAL BUSINESS
To consider and, if thought fit, to pass the resolutions set out below which, in the case of resolutions 12 and 16 will be proposed as
Ordinary Resolutions and, in the case of resolutions 13, 14, 15 and 17, will be proposed as Special Resolutions:
12. THAT, in substitution for any equivalent authorities and powers granted to the Directors prior to the passing of this resolution, the
Directors be and they are generally and unconditionally authorised pursuant to section 551 of the Companies Act 2006 (the “Act”):
(a) to exercise all powers of the Company to allot shares in the Company, and grant rights to subscribe for or to convert any security
into shares of the Company (such shares, and rights to subscribe for or to convert any security into shares of the Company being
“relevant securities”) up to an aggregate nominal amount of £2,180,454 (such amount to be reduced by the nominal amount of
any allotments or grants made under paragraph (b) below in excess of £2,180,454; and further:
(b) to allot equity securities (as defined in section 560 of the Act) up to an aggregate nominal amount of £4,360,908 (such amount
to be reduced by the nominal amount of any allotments or grants made under paragraph (a) above) in connection with an offer
by way of rights issue:
(i)
in favour of holders of ordinary shares in the capital of the Company, where the equity securities respectively attributable to
the interests of all such holders are proportionate (as nearly as practicable) to the respective number of ordinary shares in the
capital of the Company held by them; and
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Topps Tiles Plc Annual Report and Accounts for the 52 week period ended 30 September 2017 Notice of Annual General Meeting
(ii)
to holders of any 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 to deal with treasury
shares, fractional entitlements or legal, regulatory or practical problems arising under the laws or requirements of any overseas
territory or by virtue of shares being represented by depository receipts or the requirements of any regulatory body or stock
exchange or any other matter whatsoever,
provided that, unless previously revoked, varied or extended, this authority shall expire on the earlier of the date falling 15 months
after the date of the passing of this resolution and the conclusion of the next Annual General Meeting of the Company, except that
the Company may at any time before such expiry make an offer or agreement which would or might require relevant securities to be
allotted after such expiry and the Directors may allot relevant securities in pursuance of such an offer or agreement as if this authority
had not expired.
13. THAT, the Directors be and they are empowered to allot equity securities (as defined in section 560 of the Act) of the Company
wholly for cash pursuant to the authority of the Directors under section 551 of the Act conferred by resolution 12 above (in
accordance with section 570(1) of the Act) and/or by way of a sale of treasury shares (in accordance with section 573 of the Act),
in each case as if section 561(1) of the Act did not apply to such allotment provided that the power conferred by this resolution shall
be limited to:
(a) the allotment of equity securities in connection with an offer of, or invitation to apply for, equity securities (but in the case of the
authority granted under paragraph (b) of resolution 12, by way of a rights issue only):
(i)
in favour of holders of ordinary shares in the capital of the Company, where the equity securities respectively attributable to
the interests of all such holders are proportionate (as nearly as practicable) to the respective number of ordinary shares in the
capital of the Company held by them; and
(ii)
to holders of any 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 to deal with treasury
shares, fractional entitlements or legal, regulatory or practical problems arising under the laws or requirements of any overseas
territory or by virtue of shares being represented by depository receipts or the requirements of any regulatory body or stock
exchange or any other matter whatsoever; and
(b) the allotment, otherwise than pursuant to sub-paragraph (a) above, of equity securities up to an aggregate nominal value equal to
£327,068; and
unless previously revoked, varied or extended, this power shall expire on the earlier of the date falling 15 months after the date of
the passing of this resolution and the conclusion of the next Annual General Meeting of the Company except that the Company may
before the expiry of this power make an offer or agreement which would or might require equity securities to be allotted after such
expiry and the Directors may allot equity securities in pursuance of such an offer or agreement as if this power had not expired.
14. THAT, in addition to the authorities and powers granted to the Directors pursuant to resolution 13, the Directors be and they are
empowered to allot equity securities (as defined in section 560 of the Act) of the Company wholly for cash pursuant to the authority of
the Directors under section 551 of the Act conferred by resolution 12 above (in accordance with section 570(1) of the Act) and/or
by way of a sale of treasury shares (in accordance with section 573 of the Act), in each case as if section 561(1) of the Act did not
apply to such allotment provided that the power conferred by this resolution shall be:
(a) limited to the allotment of equity securities up to an aggregate nominal value equal to £327,068; and
(b) used only for the purposes of financing (or refinancing, if the authority is to be used within six months after the original transaction)
a transaction which the Board of the Company determines to be an acquisition or other capital investment of a kind contemplated
by the Statement of Principles on Disapplying Pre-Emption Rights most recently published by the Pre-Emption Group prior to the
date of this notice; and
unless previously revoked, varied or extended, this power shall expire on the earlier of the date falling 15 months after the date of
the passing of this resolution and the conclusion of the next Annual General Meeting of the Company except that the Company may
before the expiry of this power make an offer or agreement which would or might require equity securities to be allotted or sold after
such expiry and the Directors may allot equity securities in pursuance of such an offer or agreement as if this power had not expired.
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ADDITIONAL INFORMATION
NOTICE OF ANNUAL GENERAL MEETING
15. THAT, the Company be generally and unconditionally authorised for the purposes of section 701 of the Act to make market
purchases (within the meaning of section 693(4) of the Act) of ordinary shares of 3.33p each in the capital of the Company
(“Ordinary Shares”) provided that:
(a) the maximum number of Ordinary Shares hereby authorised to be purchased is 19,643,729 (representing 10% 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 3.33p;
(c)
the maximum price, exclusive of any expenses, which may be paid for an Ordinary Share shall be an amount equal to 105% of
the average of the middle market quotations for an Ordinary Share as 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; and
this authority shall, unless previously renewed, revoked or varied, expire on the earlier of the date falling 15 months after the
date of the passing of this resolution and the conclusion of the next Annual General Meeting, but the Company may enter
into a contract for the purchase of Ordinary Shares before the expiry of this authority which would or might be completed
(wholly or partly) after its expiry.
16. THAT:
(a) the Topps Tiles 2018 Sharesave Scheme (the “Sharesave Scheme”) described in the circular of which the notice containing
this resolution forms part and in the form produced at the meeting and initialled by the Chairman of the meeting for the purpose
of identification, be and are hereby approved and adopted; and
(b) the Directors of the Company be authorised to do all acts and things which they may consider appropriate to implement the
Sharesave Scheme, including making any changes to the rules of the Sharesave Scheme necessary or desirable in order to
ensure that the Directors can make a valid declaration to HM Revenue & Customs that the Sharesave Scheme satisfies the
requirements of Schedule 3 to the Income Tax (Earning and Pensions) Act 2003 necessary as expedient for the purposes of
implementing and giving effect to the same.
17. THAT, a general meeting other than an annual general meeting may be called on not less than 14 clear days’ notice.
Dated: 20 December 2017
Registered Office:
Thorpe Way
Grove Park
Enderby
Leicestershire
LE19 1SU
Registered Number: 3213782
By order of the Board
STUART DAVEY
COMPANY SECRETARY
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Topps Tiles Plc Annual Report and Accounts for the 52 week period ended 30 September 2017 Notice of Annual General Meeting
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 close of business on 29 January 2018 or, in the event that the meeting is adjourned, close of
business on such date being not more than two days prior to the date fixed for the adjourned meeting, shall be entitled to attend
and vote at the meeting in respect of the number of shares registered in their name at that time. Changes to entries in the register of
members after close of business on 29 January 2018 or, in the event that the meeting is adjourned, after two 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, Link 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 10.00 a.m. on 29 January 2018 (or, in the event that the meeting is adjourned, no later than two 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 (the “Act”) to appoint a proxy does not apply
to a person nominated to enjoy information rights under section 146 of the 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 6 December 2017, the Company’s issued share capital comprised 196,437,298 ordinary shares
of 3.33p each. Each ordinary share carries the right to one vote at a general meeting of the Company. No ordinary shares were
held in treasury but the Company’s employee benefit trust holds 3,468,517 ordinary shares to which it has waived its voting rights.
Accordingly, the total number of voting rights in the Company as at the close of business on 6 December 2017 is 192,968,781.
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.
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 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.
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Topps Tiles Plc Annual Report and Accounts for the 52 week period ended 30 September 2017
ADDITIONAL INFORMATION
NOTICE OF ANNUAL GENERAL MEETING
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.
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 (as amended).
9. 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 Act (“nominee”):
(a) 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
(b) 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.
10. Link Asset Services maintain the Company’s share register. They also provide a telephone helpline service on 0871 664 0300 (calls
cost 12p a minute plus network extras). Lines are open from 8.30 a.m. to 5.30 p.m., Monday to Friday. If you have any queries
about voting or about your shareholding, please contact Link Asset Services.
11. Members have the right to ask questions at the meeting in accordance with section 319A of the Act.
12. It is possible that, pursuant to requests made by members of the Company under section 527 of the Act, the Company may be
required to publish on a website a statement setting out any matter relating to: (a) the audit of the Company’s accounts (including
the Auditor's Report and the conduct of the audit) that are to be laid before the meeting; or (b) any circumstance connected with
an auditor of the Company ceasing to hold office since the previous meeting at which annual accounts and reports were laid in
accordance with section 437 of the Act. The Company may not require the members requesting any such website publication to pay
its expenses in complying with sections 527 or 528 of the Act. Where the Company is required to place a statement on a website
under section 527 of the Act, it must forward the statement to the Company’s auditor not later than the time when it makes the
statement available on the website. The business which may be dealt with at the meeting includes any statement that the Company
has been required under section 527 of the Act to publish on a website.
13. 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 Act;
(b) copies of the Directors’ service contracts and letters of appointment of the Non-Executive Directors; and
(c) a copy of the Company’s Articles of Association.
14. Information regarding the meeting, including the information required by section 311A of the Act, is available from the Company’s
website – www.toppstiles.co.uk.
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Topps Tiles Plc Annual Report and Accounts for the 52 week period ended 30 September 2017
Explanatory Notes to the Notice of
Annual General Meeting
THE ANNUAL GENERAL MEETING of the Company will be held at the Marriott Hotel, Smith Way, Grove Park, Enderby, Leicestershire,
LE19 1SW on 31 January 2018 at 10.00 a.m.
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 the
other resolutions:
ORDINARY BUSINESS
RESOLUTION 1
RECEIVING THE ACCOUNTS AND REPORTS
All quoted companies are required by law to lay their annual accounts before a general meeting of the Company, together with the
Directors’ reports and auditors’ report on the accounts. At the Annual General Meeting, the Directors will present these documents to the
shareholders for the financial period ended 30 September 2017 (the “Annual Report and Financial Statements”).
RESOLUTION 2
DECLARATION OF FINAL DIVIDEND
A final dividend of 2.3 pence per Ordinary Share is recommended by the Directors for payment to shareholders on the register of
members of the Company at 6.00 p.m. on 22 December 2017. Subject to approval by the Ordinary Shareholders at the Annual
General Meeting, the dividend will be paid on 2 February 2018. An interim dividend of 1.10 pence was declared which means the
total dividend level will 3.4 pence per Ordinary Share for the 52 weeks prior to 30 September 2017.
RESOLUTION 3
DIRECTORS’ REMUNERATION REPORT
All quoted companies are required by law to produce for each financial year a Directors’ remuneration report which sets out the
Remuneration Committee’s policy in relation to Directors’ remuneration, together with the remuneration and benefits paid to Directors during
the year. The Company is also required to put an ordinary resolution to shareholders approving the report at the meeting at which the
Company’s report and accounts for that year are laid. Accordingly, resolution 3 seeks the approval of the Directors’ Remuneration Report
which is set out on pages 54 to 71 of the Annual Report and Financial Statements (excluding the Directors’ Remuneration Policy).
RESOLUTIONS 4 TO 9
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. Although not required by the Company’s Articles, the Directors will, in the interests of good corporate governance under the
UK Corporate Governance Code, retire voluntarily and offer themselves for re-election. Brief biographical details about all the Directors
appear on pages 44 and 45 of the Annual Report and Financial Statements.
RESOLUTION 10
REAPPOINTMENT OF AUDITOR
This resolution concerns the reappointment of Deloitte LLP as auditor until the conclusion of the next general meeting at which accounts are
laid, that is, the next Annual General Meeting.
RESOLUTION 11
AUDITOR'S REMUNERATION
This resolution authorises the Directors to fix the auditor's remuneration.
SPECIAL BUSINESS
RESOLUTION 12
DIRECTORS’ POWER TO ALLOT SHARES
This resolution complies with guidance issued by the Investment Association and will, if passed, authorise the Directors to allot:
• relevant securities up to a maximum nominal amount of £2,180,454 which represents approximately one-third of the Company’s issued
ordinary shares (excluding treasury shares) as at the date of this notice. This maximum is reduced by the nominal amount of any equity
securities allotted under the authority set out in paragraph (b) of resolution 12 in excess of £2,180,454 ; and
• in relation to a pre-emptive rights issue only, equity securities (as defined by section 560 of the Act) up to a maximum nominal amount
of £4,360,908 which represents approximately two-thirds of the Company’s issued ordinary shares (excluding treasury shares) as at
the date of this notice. This maximum is reduced by the nominal amount of any relevant securities allotted under the authority set out in
paragraph (a) of resolution 12.
Therefore, the maximum nominal amount of relevant securities (including equity securities) which may be allotted under this resolution is
£4,360,908.
As at the date of this notice, the Company does not have any treasury shares.
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Topps Tiles Plc Annual Report and Accounts for the 52 week period ended 30 September 2017 ADDITIONAL INFORMATION
NOTICE OF ANNUAL GENERAL MEETING
The Directors do not have any present intention of exercising the authorities conferred by this resolution but they consider it desirable
that the specified amount of authorised but unissued share capital is available for issue so that they can more readily take advantage of
possible opportunities.
RESOLUTIONS 13 AND 14
DIRECTORS’ POWER TO ISSUE SHARES FOR CASH
Resolution 13 authorises the Directors in certain circumstances to allot equity securities for cash other than in accordance with the statutory
pre-emption rights (which require a company to offer all allotments for cash first to existing shareholders in proportion to their holdings). The
relevant circumstances are where the allotment:
• takes place in connection with a rights issue or other pre-emptive issue;
• is limited to a maximum nominal amount of £327,068 representing approximately 5% of the nominal value of the issued ordinary share
capital of the Company as at 6 December 2017 being the latest practicable date before publication of this notice.
Resolution 14 authorises the Directors to allot further equity securities for cash in connection with acquisitions or other specified capital
investments which are announced contemporaneously with the allotment, or which has taken place in the preceding six-month period and
is disclosed in the announcement of the allotment. This authority, which is in addition to the authority granted to the Directors pursuant to
resolution 13 and is being sought in accordance with the Pre-Emption Group’s Statement of Principles, is limited to a maximum nominal
amount of £327,068 which represents approximately 5% of the nominal value of the issued ordinary share capital of the Company as at
6 December 2017 being the latest practicable date before publication of this notice.
The Board confirms its intention to follow the provisions of the Pre-Emption Group’s Statement of Principles regarding cumulative usage of
authorities within a rolling three-year period where the Principles provide that usage in excess of 7.5% of issued ordinary share capital of
the Company (excluding treasury shares) should not take place without prior consultation with shareholders, except in connection with an
acquisition or specified capital investment as referred to above.
TREASURY SHARES
The Company may hold any shares it buys back “in treasury” and then sell them at a later date for cash rather than simply cancelling
them. Any such sales are required to be made on a pre-emptive, pro rata basis to existing shareholders unless shareholders agree by
special resolution to disapply such pre-emption rights. Accordingly, in addition to giving the Directors power to allot unissued ordinary
shares on a non pre-emptive basis, resolutions 13 and 14 will also give Directors power to sell ordinary shares held in treasury on a non-
pre-emptive basis, subject always to the limitations noted above. As at the date of this notice, the Company does not have any treasury
shares.
The Directors consider that the power proposed to be granted by resolutions 13 and 14 is necessary to retain flexibility, although they do
not have any intention at the present time of exercising such power.
Unless revoked, varied or extended, the authorities conferred by resolutions 13 and 14 will expire at the conclusion of the next annual
general meeting of the Company or 15 months after the passing of the resolution, whichever is the earlier.
RESOLUTION 15
AUTHORITY TO PURCHASE SHARES (MARKET PURCHASES)
This resolution authorises the Board to make market purchases of up to 19,643,729 ordinary shares (representing approximately 10% of
the Company’s issued ordinary shares as at 6 December 2017, being the latest practicable date before publication of this notice). Shares
so purchased may be cancelled or held as treasury shares. The authority will expire at the end of the next annual general meeting of the
Company or 15 months from the passing of the resolution, whichever is the earlier. The Directors intend to seek renewal of this authority at
subsequent annual general meetings.
The minimum price that can be paid for an ordinary share is 3.33p, being the nominal value of an ordinary share. The maximum price
that can be paid is 5% over the average of the middle market prices for an ordinary share, derived from the Daily Official List of the
London Stock Exchange, for the five business days immediately before the day on which the share is contracted to be purchased.
The Directors intend to exercise this right only when, in light of the market conditions prevailing at the time and taking into account all
relevant factors (for example, the effect on earnings per share), they believe that such purchases are in the best interests of the Company
and shareholders generally. The overall position of the Company will be taken into account before deciding upon this course of action.
The decision as to whether any such shares bought back will be cancelled or held in treasury will be made by the Directors on the same
basis at the time of the purchase.
As at 6 December 2017, being the latest practicable date before publication of this notice, there were outstanding awards under the
Company’s various share option schemes in respect of 12,081,196 ordinary shares in the capital of the Company, representing 6.2% of
the Company’s issued ordinary share capital. If the authority to purchase the Company’s ordinary shares were exercised in full, the number
of outstanding options would represent 6.8% of the Company’s issued ordinary share capital following the repurchase of shares.
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Annual General Meeting
RESOLUTION 16
APPROVAL AND ADOPTION OF THE TOPPS TILES 2018 SHARESAVE SCHEME
It is proposed that the Company adopt the Topps Tiles 2018 Sharesave Scheme (the “Sharesave Scheme”).
The Sharesave Scheme replaces the Company’s existing sharesave scheme that will expire in the next few years (“Old Scheme”). No
new options will be granted under the Old Scheme after the date of the Annual General Meeting, provided shareholder approval is
obtained for the Sharesave Scheme.
The principal terms of the Sharesave Scheme are set out in the Appendix to this document on pages 129 and 130.
The rules of the Sharesave Scheme will be available for inspection during normal business hours on Monday to Friday (excluding bank
holidays) at the Company’s registered office and at the offices of Osborne Clarke LLP at One London Wall, London, EC2Y 5EB from the
date of this document until the close of the AGM and at the place of the AGM for at least 15 minutes before the AGM and during the
AGM.
RESOLUTION 17
NOTICE PERIOD FOR GENERAL MEETINGS
The Companies (Shareholders’ Rights) Regulations 2009 require the Company to call general meetings (other than annual general
meetings) on at least 21 clear days’ notice unless shareholders approve a shorter notice period of not less than 14 clear days. Such
approval was granted at last year’s annual general meeting and this resolution therefore seeks to renew this approval. The approval will
be effective until the Company’s next annual general meeting, at which it is intended a similar resolution will be proposed. The Directors’
intention is to only call general meetings on less than 21 days’ notice where such shorter notice period would be in the interests of
shareholders as a whole.
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Topps Tiles Plc Annual Report and Accounts for the 52 week period ended 30 September 2017 ADDITIONAL INFORMATION
NOTICE OF ANNUAL GENERAL MEETING
Summary of the principal features of the Topps Tiles
2018 Sharesave Scheme (“Sharesave Scheme”)
GENERAL
The Sharesave Scheme is a savings related share option scheme designed to take advantage of the tax beneficial status of savings related
share option schemes which comply with Schedule 3 to the Income Tax (Earnings and Pensions) Act 2003 (“Schedule 3”).
The Sharesave Scheme will be administered by the Board of Directors of the Company (the “Board”) or a duly authorised committee of
the Board.
ELIGIBILITY
All UK employees and full-time Directors of the Company and participating companies within the Group are eligible to participate in the
Sharesave Scheme.
It is intended that invitations to apply for options over Shares in the Company (“Options”) under the Sharesave Scheme will be made to
all eligible employees and full-time Directors who are employed by the Company and participating companies within the Group on the
date invitations under the SAYE are issued. The Board will determine the basis upon which any invitations to apply for Options are made.
SAVINGS CONTRACT
To participate in the Sharesave Scheme, an eligible employee must enter in a save-as-you-earn contract (“Savings Contract”) with the
savings body designated by the Board, agreeing to make monthly contributions of between £5 and £500 of a specified savings period
of three or five years. The Board has discretion to determine which of the Savings Contracts will be available in respect of any invitation to
apply for Options. A bonus determined by HM Revenue & Customs (“HMRC”) is payable after the expiration of the savings period.
Applications to participate in the Sharesave Scheme may be scaled down by the Board if applications exceed the number of Shares
available for the grant of Options. Such scaling down may include:
• the exclusion of bonuses;
• reducing monthly contributions above a certain level pro rata:
• reducing monthly contributions for each eligible employee pro rata; or
• treating elections for five-year Savings Contracts as elections for three-year Savings Contracts.
OPTION PRICE
The Option price for each ordinary share in respect of which an Option is granted shall not be less than the greater of:
• 80% of the average middle-market quotation as derived from the London Stock Exchange Daily Official List for the dealing day prior to
the date of grant; and
• the nominal value of the Shares.
ISSUE OF INVITATIONS
Invitations to apply for Options may only be issued within the period of 42 days following the approval of the Sharesave Scheme by the
Company’s shareholders, the announcement of the Company’s results for any period, from any day on which changes to the legislation
or regulations affecting save-as-you-earn schemes under Schedule 3 are announced, effected or made or any day on which the Board
determines that exceptional circumstances exist. If, during such period, the Company is restricted from issuing invitations, invitations may
be made immediately following such restrictions ceasing to apply.
GRANT OF OPTIONS
The number of Shares over which Options may be granted must, as nearly as possible, be equal to, but not in excess of that number of
Shares which may be purchased out of the repayment proceeds (including any interest or bonus payable) of the relevant Savings Contract
at the Option price.
Options under the Sharesave Scheme may only be granted within the period of 30 days following the date on which the Option price is
determined.
TERMS OF OPTIONS
Options may be granted over newly issued Shares, treasury Shares or Shares purchased in the market. Options are not transferable (other
than on death). No payment will be required from participants for the grant of any Options.
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Topps Tiles Plc Annual Report and Accounts for the 52 week period ended 30 September 2017 Summary of the principal features of the Topps Tiles
2018 Sharesave Scheme (“Sharesave Scheme”)
LIMITS ON THE ISSUE OF SHARES
The number of Shares which may be issued or issuable pursuant to rights granted in any 10-year period under the Sharesave Scheme
and under any other employees’ share plan adopted by the Company may not exceed 10% of the issued ordinary share capital of the
Company from time to time.
Treasury Shares will be treated as newly issued for the purpose of these limits until such time as guidelines published by institutional investor
representative bodies determine otherwise.
The above limits may be varied by the Board to take into account any variation in the Company’s share capital from time to time.
EXERCISE OF OPTIONS
Options will only normally be exercisable for a period of six months commencing on the third or fifth anniversary (as the case may be) of
the starting date of the related Savings Contract and, if not exercised by the end of that period, the Option will lapse.
Earlier exercise may however be permitted in specified circumstances including:
• termination of employment as a result of death, injury, disability, redundancy, retirement or the sale of the subsidiary or business for
which the participant works; and
• in the event of a takeover or liquidation of the Company.
CORPORATE EVENTS
In the event of a takeover, reconstruction or winding up of the Company, Options may be exercised within six months of the change
of control.
Alternatively, Options may be exchanged for new equivalent Options over shares in the acquiring company where appropriate.
RIGHTS ATTACHING TO SHARES
All Shares issued or transferred under the Sharesave Scheme will rank pari passu with all other Shares of the Company for the time being
in issue (save as regards any rights attaching to such Shares by reference to a record date prior to the date of issue or transfer to the
participant).
ADJUSTMENTS
In the event of any rights of capitalisation issue, sub-division, consolidation, reduction or other variation of the ordinary share capital, the
Board may make such adjustments as it considers appropriate to the number of Shares subject to Options and/or the price payable on the
exercise of options.
AMENDMENTS AND TERMINATION
The Board may amend the Sharesave Scheme at any time, provided that prior approval of the Company’s shareholders in a general
meeting will be required for amendments to the advantage of employees relating to eligibility, limits, the basis for determining a
participant’s entitlement to, and the terms of, the Shares comprised in an award and the impact of any variation of capital.
However, any minor amendment to benefit administration, or any amendment to take account of legislative changes, or to obtain
or maintain favourable tax, exchange control or regulatory treatment in any jurisdiction, may be made by the Board without
shareholder approval.
No further awards may be made under the Sharesave Scheme on or after the tenth anniversary of the approval by shareholders of the
Sharesave Scheme but the rights of existing participants will not be affected by any termination.
PENSION BENEFITS
Benefits under the Sharesave Scheme are non-pensionable.
128
25632.02 13 December 2017 11:33 AM Proof6
Topps Tiles Plc Annual Report and Accounts for the 52 week period ended 30 September 2017 Summary of the principal features of the Topps Tiles
The Team
2018 Sharesave Scheme (“Sharesave Scheme”)
ADDITIONAL INFORMATION
NOTICE OF ANNUAL GENERAL MEETING
THE TEAM
A
Aaron Turner
Aaron Lonie
Aaron Barber
Abby Tween
Abdul Rouf
Abigail Cole
Adam Nuttall
Adam Ward
Adam Crowe
Adam Shearsmith
Adam Clarke
Adam Chapman
Adam Godfrey
Adam Cato
Adam Gilkes
Adam Groves
Adam Gaymer
Adam Thomson
Adam Hunt
Adam Devine
Adam Rodriguez
Adam Cox
Adam Cherryman
Adam Jolly
Adel Tazi
Adel Benyoucef
Adele McMahon
Adrian Kimber
Afrim Mensah
Akash Bisht
Akinyemi Orekoya
Akshey Vadgama
Alan Saunders
Alan Smalley
Alan Wrighting
Alan Sinclair
Alan Sproston
Alan Haji
Alan Clague
Aleksandar Tsvetanov
Aleksandrs Gulenkovs
Alessandro Margrove-Gomes
Alex Whitmore
Alex Abram
Alex Moore
Alex Bell
Alex Bennet
Alexander Onions
Alexander Armstrong
Alexander Findley
Alexander Torres
Alexander Williams
Alexander Bradley
Alexander Walton
Alexander Ford
Alexander Gaffney
Alexander Marks
Alexander Miles
Alexandra Tuckley
Alexandru Cimpanu
Alfie Lawes-Smith
Ali Rizvi
Alicija Romanovska
Alisha Millward
Alison Hunt
Allan Harper
Allan Busby
Allysha Byrne
Alnavaz Nuralah
Amanda Hullett
Amanda Green
Amanda Brogan
Amanda Plumb
Amanda Lyon
Amardeep Sanghera
Amarpreet Bhaker
Amy Smith
Amy Wirtz
Amy Biggs
Amy Buttle
Ananthan Sivanesan
Andre Osei
Andrea Moon
Andrei Radu
Andrew Clay
Andrew Collins
Andrew Warne
Andrew Davis
Andrew Young
Andrew Middleton
Andrew Cox
Andrew Waterfield
Andrew Hanson
Andrew Riley
Andrew Playfoot
Andrew Woods
Andrew Winterburn
Andrew Shaw
Andrew King
Andrew Sharkey
Andrew Scorgie
Andrew Wathan
Andrew Taylor
Andrew Baldock
Andrew Sansum
Andrew Wilkinson
Andrew Brand
Andrew Gilmour
Andrew Haynes
Andrew Woodier
Andrew Bond
Andrew Oliver
Aneil Easow
Aneta Kleczek
Angela Capp
Angela Toseland
Angela George
Angelika Zapert
Anna Moulding
Anna Holds
Annalise Jackson
Anna-Marie Tough
Annelise Sjursen
Annie Dickson
Annmarie Malone
Anthony Linsell
Anthony Molyneux
Anthony Christopher
Anthony Gibby
Anthony Davies
Anthony Gilbert
Anthony Dedman
Anthony Daly
Anthony Docherty
Anthony Havvas
Anthony Tarr
Anthony Dolan
Anthony Connor
Anthony Hollick
Anthony Lyth
Anthony Dunsmore
Antoni Maiello
Antonia Hughes
Antony Belham
Anub Varghese
Anwar Marshall
Aron Hoff
Arthur Van Aswegen
Aruna Mistry
Ashley Cutler
Ashley Martin
Ashley Hegarty
Ashley Mansfield
Ashley Murray
Ashley Kiffin
Ashley Somerville
Ashley Hookway
Asteraya Engdayehu
Astone Davids
Atul Patel
Audrius Kolojanskas
Augustine Chinenye
Augustus Hagan
Aurimas Lenkauskas
B
Barbara Connor
Barbara Smith
Barri Barnes
Barry Jones
Barry Theobald
25632.02 13 December 2017 11:33 AM Proof6
129
Topps Tiles Plc Annual Report and Accounts for the 52 week period ended 30 September 2017 The Team
Barry Beaver
Barry Hanlon
Barry Stratford
Bartosz Pawelczyk
Beatrice Welmer
Ben Holloway
Ben Bright
Ben Armitage
Ben Howard
Ben Richmond
Ben Barraclough
Ben Berrisford
Benjamin Rich
Benjamin Rowe
Benjamin Goodey
Benjamin Moughan
Benjamin Wood
Benjamin Slater
Benjamin Edwards
Benjamin Hale
Benjamin Hannon
Berek K-Caeser
Bethany Richardson
Bethany Green
Beverley Orton
Beverley Begley
Bianca Gradinaru
Bianca Cockburn
Billie Stringer
Billy Taylor
Billy Stout
Blair Ross
Bolaji Adeyanju
Bonita Flinthill
Bradley Favre
Bradley Ball
Brandon Abels
Brendan Flynn
Brendan McCallum
Brett Goulden
Brett O’Harrow
Brett Hookway
Brian Cariello
Brian Cox
Brian Cook
Brian Linnington
Brian Morris
Bruce Fielding
Bruce Garrod
Bruno Bernasconi
Bryan Taylor
Byron Tree
C
Cade Somerville
Caitlin Pipes
Calbert Hall
Callum Beedles
130
Callum Scott
Callum Phillips
Callum Evans
Callum Jones
Callum Ford
Calum Hamilton
Campbell Marr
Cara Harrison
Carl Whatley
Carl Cumberbatch
Carl Fraser
Carl Courtney
Carl Hermitt
Carl Willshee
Carl Sheldon
Carl Bird
Carla Creary
Carley Brown
Carlo Nastro
Carlos Chowdhury
Carlos Alford Maestre
Carlyn McKechnie
Carol Beattie
Caroline May
Caroline Bailey
Caroline Vernon-Sutton
Caroline Bray
Carolyn Paull
Carolynn Remington-Hobbs
Catherine Britton
Catherine Doulton
Catriona Green
Chamyse Morley
Chanel Sanganoo
Chantal Searle
Charjuan Knight
Charlene Walpole
Charlene Smith
Charles Taylor
Charles Robbins
Charles Roussard
Charles Snell
Charles Rollins
Charles Wafula
Charles Hallgalley
Charles Davis-Alexis
Charlie Green
Charlie Dee
Charlotte Lammin
Charlotte Fitzgerald
Charlotte Kenny
Chelsea Cragg
Chelsea Battle
Chelsey Blow
Cherie Ahmet
Cheryl Vearncombe
Chetna Shah
Chloe Singleton
Chloe Jackson
Chloe Boyce
Choudre Grobler
Chris Foster
Chris Darley
Chris Mcquade
Christain McCarthy
Christelle Armstrong
Christian Banham
Christian Olaru
Christine Hendry
Christine Thistlethwaite
Christine Taylor
Christine Berry
Christopher Cooper
Christopher Turley
Christopher Heyes
Christopher Collins
Christopher Harbutt
Christopher Howe
Christopher Curtis
Christopher Williamson
Christopher Bailey
Christopher Sansby
Christopher Nottle
Christopher Holland
Christopher Nicholls
Christopher Beeson
Christopher Cooper
Christopher Potter
Christopher Bowden
Christopher Leach
Christopher Butler
Christopher Wells
Christopher Simpson
Christopher Perry
Christopher D’Arts
Christopher Edwards
Christopher France
Christopher Moore
Christopher Maguire
Christopher Bodicoat
Christopher Miskelly
Christopher Bentley
Christopher Harrison
Christopher Samuel
Christopher Johnson
Christopher Birch
Christopher Senior
Cieran Armstrong
Clair Jeffries
Claire Chaffe
Claire Rayton
Claire Tiney
Claire Harris
Claire Lees
25632.02 13 December 2017 11:33 AM Proof6
Topps Tiles Plc Annual Report and Accounts for the 52 week period ended 30 September 2017 ADDITIONAL INFORMATION
THE TEAM
Clare Barden
Clare Shepherd
Clare Cohring
Clare Sharpe
Clare Kash
Cliff Mackay
Clifford Tomlinson
Clive Lehman
Clive Harlow
Colin Markham
Colin Hoban
Colin Rymer
Colin Taylor
Colin Skinner
Colin Harvey
Colin Griffiths
Colin Hayward
Colin Clarke
Connor Saunders
Connor Flynn
Conrad Harrup
Conrad Cassidy
Constantin Pavelescu
Cora Morrison
Cory Handford
Cosimo Lanzafame
Cosmin Zaharia
Craig Reed
Craig Dolling
Craig Murphy
Craig Connor
Craig Johnson
Craig Jones
Craig Matthews
Cristian Ionescu
Cristina Cole
Czeslaw Majorek
D
Daisy-May Utley
Damian Merritt
Damiano Seresini
Damiean Godfrey
Damien Mole
Dan Bevan
Dane Pearson-Mcgloin
Daniel Musguin
Daniel Fallows
Daniel Jones
Daniel Little
Daniel Wren
Daniel McLean
Daniel Cox
Daniel Thornley
Daniel Brain
Daniel Saltmarsh
Daniel Sheppard-Brown
Daniel Willows
Daniel Neary
Daniel Wright
Daniel Chambers
Daniel Milner
Daniel Poile
Daniel Jones
Daniel Caruana
Daniel Lawrie
Daniel Jenkins
Daniel Ashby
Daniel Grunwell
Daniel Colk
Daniel Priest
Daniel Edge
Daniel Hawkins
Daniel Gelly
Daniel Calderwood
Daniel Cheyne
Daniel Thompson
Daniel Pratt
Daniel Reynolds
Daniel Fairless
Daniel Cross
Danielle Noyes
Danielle Omara
Danielle Kirby
Dannielle Carlton
Danny Burgess
Danny Ostler
Danny McInnes
Danny Wilson
Darius Bright
Darius Moses
Darran Wood
Darren Square
Darren Harper
Darren Morgan
Darren Doughty
Darren Mitchell
Darren Wagg
Darren Chester
Darren Mencarini
Darren Sherwood
Darren Shapland
Darren Jones
Darren Horne
Darren Smith
Darren Dance
Darren Young
Darren Phillips
Darron Kerr
Darron Soos
Darryl Ferry
Dave Elliott
Dave Plant
David Thomasson
David Carpenter
David Hirst
David Henderson
David Oliver
David Macartney
David Stott
David Harper
David Steel
David Kettlewell
David Wilson
David Murray
David Smith
David Matthews
David Hatton
David Hill
David Jobling
David Townsley
David Augustus
David Meers
David Prime
David Yallop
David Webb
David Lane
David Whitelaw
David Sheehy
David Kershaw
David Hope
David Shewan
David Miller
David Knight
David Coupland
David Thompson
David Palmer
David Clare
David Hussey
David Webb
David Rendall
David Beasley
David Simms
David Fletcher
David Longman
David Sinclair
David Medlam
David Hamer
David Blackhurst
David Clark
David Callaghan
David Needham
David Green
David Cressey
David Fisher
David Furness
David Hillier-Reynolds
David Diaper
David Houston
David Jackson
David Tulett
Dawn Gale Curtis
25632.02 13 December 2017 11:33 AM Proof6
131
Topps Tiles Plc Annual Report and Accounts for the 52 week period ended 30 September 2017 The Team
Dayne Ashard
Dean Marshall
Dean Woolley
Dean Titchen
Dean Newell
Dean Partridge
Dean Kay
Dean Walker
Deane Rhone
Deanna Mcmahon
Deborah Fitzpatrick
Debra Bandghiree
Declan Baker
Decland Speede
Deena Mistry
Deesha Bhatt
Denis O’Brien
Denise Chalmers
Dennis Jovellanos
Dennis Rawding
Denzil Johns
Derek Sim
Derek Amoo
Dermott Reilly
Devias Gudka
Devindren Govender
Dewi Evans
Dilawar Ali
Dilip Parmar
Dipal Parikh
Dominic Reilly
Dominic Hall
Dominic D’Souza
Dominic Gray
Dominic Godwin
Donald Magullian
Donald Benson
Donald Morrissey
Donna Douglas
Donna Murphy
Donna Mumford
Donovan Robinson
Dorothy Stewart
Douglas Nicol
Douglas Bingham
Douglas Gracia
Duncan Mayman
Dwain Mensah
Dylan Roberts
Dylan Bradley
E
Eamonn Clancy
Edgar Calderon Ramirez
Edwin James
Eirini Messaritaki
Elionardo Silva
Eliza Sobocinska
132
Elizabeth Lee
Elizabeth Sutton
Ellen Hilton
Ellie Howcroft
Elliot Gibbons
Elliott Brown
Elliott Davis
Elliott Sully
Elsie Bird
Emile Puica
Emily Lenton
Emily Mansell
Emily Madge
Emily Tuttlebury
Emily Sneller
Emma Childs
Emma Dudley
Emma Spellacey-Perry
Emma Hilton
Emma Jordan
Emma Stearman
Emma Gotch
Emma Anderson
Emmanuel Melford-Rowe
Emmanuel Adeniyi
Emran Mannan
Eric Asuming
Ermiyas Girma
Erwan Vauconsant
Esme Sparrow
Ezra Deans
F
Fadel Wane
Faisle Sharif
Faizar Ali
Fayzur Rahman
Felicity Fletcher
Felipe West
Fiona Oakes
Fitz Martin
Fouche Lubbe
Frances Aylward
Francesca Wright
Frank Hibbert
Frank Smith
Fred Therme
G
Gabriel Iacob
Gabriela Olszowska
Gabriella Carvalho
Gail Knight
Gareth Davies
Gareth Fogden
Garry Hardy
Garry Crichton
Gary Ashdown
Gary Marshall
Gary Bloomfield
Gary Gear
Gary Curtis
Gary Woolmore
Gary Gledhill
Gary Roberts
Gary Nash
Gary Gledhill
Gary Davies
Gary Gee
Gary Purves
Gary Heath
Gary Mayo
Gavin Bennett
Gavin Collins
Gavin Magwood
Gavin Winter
Gavin Coulthread
Geeta Makwana
Gemma Stephens
Gemma Farnan
Gemma Wademan
Gemma McKinley
Genya Hutchins
Geoffrey Greenwood
Geoffrey Thomas
Geordie Stock
George Birkley
George Astill
George Allen
George Hopper
George Buckley
George Wetherden
George Henri Diakileke
Georgia Clayton
Georgia Miles
Georgina McFarlane
Geraint Thorne
Gillian Grace
Glendale Canoville
Glenn Elgy
Glenn Smith
Gloria Kusi
Gokhan Karadogan
Gordon Shennan
Graeme Morris
Graham Jones
Graham Vance
Graham Cooper
Graham Livingstone
Graham Foster
Graham Hitchin
Graham Hancock
Graham Gasson
Graham Mansfield
Grant Harris
Graziana Motta
25632.02 13 December 2017 11:33 AM Proof6
Topps Tiles Plc Annual Report and Accounts for the 52 week period ended 30 September 2017 Greg Johnstone
Gregory McHugh
Gregory Smith
Gregory Jeffs
Grenville Davies
Gurinder Chana
H
Hannah Pritchard
Hanz Nelson
Haroon Cockar
Haroon Younus
Harriet Goodacre
Harry Biggs
Harry Kay
Harry Foster
Hasmita Parmar
Hayden Mason
Hayley Lomas
Hazel Millington
Heather Findler
Helen Hughes
Helen Gosling
Helen Walker
Helen Washington
Henry Povey
Himesh Hirani
Hitashji Odedra
Holly Baxter
Holly Dawson
Holly Vincent
Hossen Naudeer
I
Iain Arnott
Ian Marshall
Ian Bloomfield
Ian Sykes
Ian Noon
Ian Paterson
Ian Marshall
Ian Aikman
Ian McNeish
Ian Tivendale
Ian Hughes
Ian Snook
Ian Croton
Ian Gilliver
Ibrahim Ali
Ilars Skabeikis
Inzamam Akram
Iqra Iqbal
Ivan Paitoo
J
Jaasir Wazir
Jacek Zebrowski
Jacek Skubisz
Jack O’Neill
Jack Maddison
ADDITIONAL INFORMATION
THE TEAM
Jack Whitehead
Jack Coker
Jack Walker
Jack Finlay
Jack Relfe
Jack Haynes
Jack Millman
Jack Allardyce
Jack Flannigan
Jack Thompson
Jack Ellis
Jack Sell
Jack Malcolm
Jack Cashin
Jack Bennett
Jacob Allan
Jacob Benneyworth
Jacqueline Desborough-Morehead
Jacqueline Farnan
Jacqueline Goss
Jacqueline Bolger
Jacqueline Dadge
Jade Girgensons
Jade Berry
Jahtal Nisa Roberts-Joseph
Jailuene Witterick Peake
Jake Woods
Jake Shopland
Jake Boult
James Patston
James Robertson
James Cameron
James Tuvey
James Morgan
James Pilfold
James Biesty
James Heard
James Rolfe
James Fox
James Taylor
James Clifford
James Saunders
James Worden
James Walker
James Hollis
James Snuggs
James Carpenter
James Pannett
James Brophy
James Beaumont
James MacCallum
James Hawker
James Howard
James Beasley
James Cheung
James Fox
James White
James Smith
Jamie Wenborn
Jamie Sia
Jamie Evans
Jamie Rose
Jamie Mears
Jamie Ormrod
Jamie Kelly
Jamie Broadhurst
Jamie Kane
Jamie Wilson
Jamie Kirk
Jamie Lee McCann
Jamye Walker
Jan Reddi
Janaka Alahapperuma
Jane Sinclair
Janet Riley
Janet Lee
Janine James
Jarreth Hawkins
Jasbir Singh
Jason Pratt
Jason Knox
Jason Rose
Jason Darcy
Jason Ealden
Jason Coupland
Jason Gallagher
Jason Barker
Jason Wilcox
Jason Durham
Jason Thompson
Jason Akiens
Jaspreet Sandhu
Javeed Parkar
Jay Strawford
Jay Billings
Jayaprakash Paragjee
Jayne Warlow
Jayne Young
Jazmine Barwe
Jeannette Hastie
Jed O’Neill
Jedrzej Politowski
Jeff Arscott
Jeffrey Armstrong
Jelena Koseleva
Jemma Copp
Jennie Kane
Jennifer Seabrook
Jennifer Wall
Jennifer Thompson
Jennifer Gregory
Jenny Inkson
Jeremy Napthine
Jerry Opata
25632.02 13 December 2017 11:33 AM Proof6
133
Topps Tiles Plc Annual Report and Accounts for the 52 week period ended 30 September 2017 The Team
Jessica McCarthy
Jessica Rowlands
Jessica Thiari
Jessica Gurski
Joanna Kowalska
Joanne Elton
Joanne Cox
Joanne Harris
Jodie Jones
Joe Smith
Joe Mathews
Joe Rudd
Joe Raynsford
Joel Barker
Joel Fothergill
Jogendra Kalicharan
John Smith
John Thompson
John Moat
John Harris
John Page
John Cook
John Fawkes
John Shaw
John Hughes
John McLaren
John Gardner
John Bourke
John Hickey
John Taylor
John Ellis
John Hesp
John Harrison
John Murphy
John Field
John Conley
John Scerri
John Hennessy
John Monks
John McDermott
John Coogan
Johnathan McCallum
Jon Thatcher
Jon Reynolds
Jon Davis
Jon Cottrell
Jonathan Hargreaves
Jonathan Hall
Jonathan Williams
Jonathan Woodroff
Jonathan Morgan
Jonathan Wallace
Jonathan Coombs
Jonathan Boxall
Jonathan Stone
Jonathan Stearman
Jonathan Roberts
134
Jonathan East
Jonathan Impey
Jonathan Kirk
Jonathon Turner
Jon-Paul Hughes
Jordan Macdonald
Jordan Lindsay
Jordan Stephens
Jordan Vinluan
Jordan Bannister
Jordan Huston
Jordan Wheatley
Josef Kinski
Joseph Cox
Joseph Gregorace
Joseph Sweeney
Joseph Daly
Joseph Whittaker
Joseph Lewis
Joseph Heath
Joseph Haynes
Joseph Morton
Joseph Reed
Josephina Lane
Joshua Rapley
Joshua Batterham
Joshua Wright
Joshua Lambert
Joshua Elliott
Joshua Paton-Rolls
Joshua Jackson
Joshua Stenhouse
Joshua Brown
Joshua Higgs
Joshua Darby
Joshua Hubbard
Joshua Hughes
Joshua Dunford
Joshua Hastings
Joshua Mangos
Joshua McCarthy
Joshua Sanders
Josie Colehan
Judith Duncan
Juginder Gill
Julia Kerr
Julian Myles
Julie Cox
Julie Fewings
Julie Brachtvogel
Julie Mitchell
Julie Bird
Jullah Jabbi
Juris Kalnins
Justin Evans
Justin Korankye-Addai
Justin Marlow
Justin Coyle
Justine Bowman
Juttinder Digpal
Jyoti Kaur
K
Kaitlin Varnam
Kajetan Marcinek
Kamaljit Atkar
Kamaljit Thandi
Kamil Janas
Kamil Green
Kamlesh Shah
Kamran Sarfraz
Karen Dodds
Karen Leimetter
Karis Hall
Karl Stephens
Karl Verry
Karl Turner-Talmage
Karl Aran
Karl Lippiatt
Karl White
Karl English
Karl Mullaney
Karleigh Stokes
Kashan Riley
Kastriot Kelani
Katarzyna Roberts
Kate O’Connor
Kate Flitton
Katherine Jackson
Katherine Blitz
Kathryn Baird
Kathryn Pell
Kathryn Finch
Kathryn Van-Kleef
Katie Brindley-Hughes
Katie Lunn
Katy Todd
Kaylah Sutherland
Kayleigh Clemson
Kayleigh Barnes
Kayley Coldham
Kazi Miah
Keiron Ball
Keith Rudkin
Keith Ambrose
Keith Fitzpatrick
Keith Down
Keith Alexander
Kelly Savile
Kelly Weyman
Kelly Dalby
Kelly-Anne O’Connor
Kenneth Owen
Kenneth Westley
Kenneth Ostler
25632.02 13 December 2017 11:33 AM Proof6
Topps Tiles Plc Annual Report and Accounts for the 52 week period ended 30 September 2017 ADDITIONAL INFORMATION
THE TEAM
Kerri Atkinson
Kerry Hurst
Kerry Ann Crofts
Kerry-Ann Smith
Kevan Richardson
Kevin Baker
Kevin Thorne
Kevin Bowtle
Kevin Fox
Kevin Hailes
Kevin Nicol
Kevin Rowe
Kevin Hodson
Kevin Hartley
Kevin Hardy
Kevin Atherton
Kevin Smith
Kevin Redmond
Kevin Bingham
Kevin Hastings
Khai Shaw
Khan Khan
Kiaran Wingham
Kie Mitchell
Kiera Jago
Kieran Barnes-Warden
Kieran Gardiner
Kieran Corben
Kieran Hudson
Kieran Thomas
Kieran Hansard
Kieran Fleet
Kieron Clarke
Kim Liddle
Kim Moriarty
Kim Mendonca
Kirandeep Kaur
Kirk Irvine
Kirsten Cummings
Kirsten Wilby
Kirstie Leonard
Kirstie Mcdowell
Kirsty Davies
Kirsty Rice
Kirsty Graham
Kirti Patel
Kranthi Billakanti
Kristian Catterall
Kristian Prosser
Kristopher Brough-Rutland
Krystle Milan
Krzysztof Burdajewicz
Kuldeep Singh
Kuljit Aujla
Kunal Pandya
Kye Harman
Kyle Hardie
Kyle Welford
Kyle Batley
Kyle Manns-Kennedy
Kyle Crichton
Kyle Markland
Kyle Crubaugh
L
Lance Cale
Laura James
Laura Racey
Laura Henry
Laura Horton
Laura Sansom
Laura Webb
Laura Madigan
Laura Cox
Laura Lloyd
Laura Wilson
Lauren Holmes
Lauren Bartram
Lauren Duddridge
Lauren Richmond
Laurence Jones
Laurence Pendrill
Layla Pring
Leah Humphries
Leanne Palmer
Leanne Curry
Leanne Clarke
Lee Dover
Lee Jacovou
Lee Galloway
Lee Baxter
Lee James
Lee Hutchinson
Lee Read
Lee Clarke
Lee McConnell
Lee Dering
Lee West
Lee Gibson
Lee Carlos
Lee Cash
Lee Kent
Lee Cornford
Lee Wilkinson
Lee Eagling
Lee Gleeson
Lee Armstrong
Lee Harris
Lee Trim
Lee Gladman
Lee Emery
Lee Worrad
Leendert Van Den Berg-Slowey
Leighton Davies
Leon Pryce
Leon Das
Leona Parker
Leonora Moses
Lesley Watson
Lesley Willcox
Lewis Walter
Lewis Adkins
Lewis Collins
Lewis Williams
Lewis Crossley
Lewis Allan
Lewis Elkin
Lewis Buckley
Lewis Hill
Lewis Gale
Leyton Bellamy
Leza McDonald
Liam Hunt
Liam Piper
Liam Bantin
Liam Hogan
Liam Ball
Liam Ellis
Liam Jiggins
Liam Childs
Lianne Harrison
Libby Field
Lili Harris
Linda Shaw
Linda Herbert
Lindsay Bond
Lindsey Flint
Lisa Holmes
Lisa Algar
Lisa Cullen
Lisa Noel
Lisa Callan
Lisa Johnson
Lloyd Jackson
Lois Short
Lola Halligan
Lorraine Burton
Lorraine Martin
Louarna Bullock
Loucas Louca
Louise Jeffery
Louise Roots
Louise Grainger
Lucy Mcgennity-Bane
Lukaszl Pirga
Luke McNally
Luke Kerr
Luke Potiphar-Trigwell
Luke Livermore
Luke Day
Luke Saunders
Luke Woodward
25632.02 13 December 2017 11:33 AM Proof6
135
Topps Tiles Plc Annual Report and Accounts for the 52 week period ended 30 September 2017 The Team
Luke Barefield
Luke Carson
Luke Statters
Luke Watson
Lyndsey Kell
Lynn Dignan
Lynne Meldrum
Lynne Reynolds
Lynsey Smart
M
Maciej Rabczewski
Maciej Krzyzaniak
Mahbub Kabir
Mahesh Wara
Mahomad Zubair Saiyed
Malcolm Ferguson-Thomas
Mandy Aidney
Mansoor Ali
Marc Law
Marcin Kupczyk
Marcos Loureda
Marcus Wolthers
Marek Kloda
Margaret Lawrie
Maria Thompson
Maria Drozdova
Mark Lever
Mark Gasson
Mark Hunter
Mark Wright
Mark Waldock
Mark Maciver
Mark Frisby
Mark Palmer
Mark Vaughan
Mark Brown
Mark Johnston
Mark Bianchi
Mark Tennant
Mark Coe
Mark Stephens
Mark Fuller
Mark Winder
Mark Burgess
Mark Pancott
Mark Allman
Mark Keymer
Mark Braithwaite
Mark Winger
Mark Tilley
Mark Holland
Mark Whitaker
Mark Ridley
Mark Davies
Mark Wordley
Mark Woodyatt
Mark Penfold
136
Mark Brown
Mark Percival
Mark Owen
Mark Rogers
Mark Sloan
Mark Elliott
Mark West
Mark Williams
Marta Seabra
Martha Karczewska
Martin Smyth
Martin Winterburn
Martin Derricott
Martin Wys
Martin Osborne
Martin Williams
Martin Williams
Martin Pickard
Martin Turner
Martina Way
Martyn Spring
Martyn Somerville
Martyn Costen
Martyn Lovell
Mary Syme
Mathanaan Yogananthan
Mathew Tapp
Mathew Lampard
Mathew Clifton
Mathew Buckett
Matt Attwood
Matthew Williams
Matthew Foster
Matthew Wright
Matthew Foulger
Matthew Robinson
Matthew Moore
Matthew Fisher
Matthew Hawley
Matthew Wesson
Matthew Woodhouse
Matthew Dunne
Matthew Whitlock
Matthew Stevenson
Matthew Nash
Matthew Martin
Matthew Jones
Matthew Ingram
Matthew Williams
Matthew Lindsay
Matthew Stewart
Matthew Cooper
Matthew Johnson
Matthew Ellis
Matthew Clarke
Matthew Haynes
Matthew Penn
Matthew Illing
Matthew Martindale
Matthew Miller
Matthew Mc Manus
Matthew Swain
Matthew Rowson
Matthew Barcas
Matthew Holland
Matthew Holland
Mattia Tosi
Maureen Mcgrattan
Max Evans
Megan Broadway
Megan Lyons
Mehmet Asdoyuran
Melanie Gray
Melanie Toole
Melanie Abbott
Melanie Hart
Melissa Wadman
Melton Thompson
Melvyn Chamberlain
Mervyn Thorne
Mhairi Wade
Mica Gray
Michael Boughton
Michael Finn
Michael Earls
Michael Hall
Michael Foley
Michael Fannon
Michael Haggett
Michael Lovelock
Michael Hopper
Michael Darroch
Michael Lay
Michael Weeks
Michael Buckley
Michael Huskisson
Michael Litster
Michael Van Sittert
Michael Dinter
Michael Upton
Michael Moss
Michael Quinn
Michael Edwards
Michael McGarry
Michael Congdon
Michael McNally
Michael Goodfield
Michael Dinnage
Michael Chapman
Michael Sear
Michael Raeburn
Michael Smillie
Michael Gee
Michael Angelides
25632.02 13 December 2017 11:33 AM Proof6
Topps Tiles Plc Annual Report and Accounts for the 52 week period ended 30 September 2017 ADDITIONAL INFORMATION
THE TEAM
Michael Evans
Michael Bramble
Michael Ohare
Michael Pearson
Michael Swanston
Michael Howes
Michael Rosewall
Michael Wright
Michael Way
Michaela Thomas
Michele Trickett
Michelle Hill Risley
Michelle Le Monnier
Michelle Moore
Michelle Coote
Mick Wells
Mihaela Duta
Mike Booth
Miles Burden
Millie Gregory
Millie Jones
Mkhonto Gumede
Mohamed Patel
Mohamed Mufallal
Mohamed Weheliye
Mohammad Mukhtar
Mohammed Amin
Mohammed Jamil
Mohammed Jimale
Mohammed Khalid
Mohammed Hoque
Mohammed Ali
Mohammed Ibad Khan
Mohummed Numaan Zaffer
Molly Throup
Morva Leslie
Mr Topps (Retired)
Mubashir Uddin
Murdo Martin
Musaver Hussain
Myles Byfield
N
Naomi McKenzie
Narinder Chatha
Nasir Hussain
Natalie McCuaig-Finlay
Natalie Paine
Natalie Ratsavong
Natasha McLeod
Nathan Coulthard
Nathan Austin
Nathan Winterton
Nathan Wilson
Nathan Cavanagh
Nathan Petts
Nathan George
Nathan Watson
Nauris Vinkelis
Nayim Ahmed
Neely Stuart
Neha Shah
Neil Homan
Neil Williams
Neil Southgate
Neil Topping
Neil Wardlaw
Neil Jones
Neil Brownley
Neil Ammon
Neil Roessner
Neil Muckle
Neil Jeremy
Neil Forbes
Nicholas Withers
Nicholas Lodge
Nicholas Gadd
Nicholas Houghton
Nicholas Stone
Nicholas Lawrence
Nicholas Kent
Nicholas Culley
Nicholas Taylor
Nicholas King
Nicholas Hargreaves
Nicholaus Buchanan
Nick Wardman
Nick Meese
Nick Walch
Nicky Glenister
Nicol Rennick
Nicola McWatt
Nicola Howlett
Nicola Eden
Nicole Andrews
Nigel Fleming
Nigel Slaughter
Nikolay Georgiev
Nile Anning
Nina Bolam
Nishit Shah
Noor Abed
Norman Schwab
Numan Usman
Nuno Pinto Da Costa
O
Oliver Farebrother
Olyvia Offley
Omid Ibrahimi
Onder Madencioglu
Oscar Cork
Oskar Wedlake Hatton
Osman Sendur
Owen Tudor
Owen Hitch
Oz Masaya
P
Paige Makepeace
Paige Morgan
Pankaj Bhardwaj
Paolo Segagni
Paresh Nagar
Patrick Howlett
Paul Irving
Paul Burkett
Paul Kelly
Paul Miller
Paul Mills
Paul Clark
Paul Galvin
Paul Noyes
Paul Starkey
Paul Chapman
Paul Davey
Paul Cartledge
Paul Dalby
Paul Whittington
Paul Burrow
Paul Baxter
Paul Nicholls
Paul Cowen
Paul Tregaskis
Paul West
Paul Elliott
Paul Whitworth
Paul Lester
Paul Logue
Paul Semple
Paul Third
Paul Lee
Paul Wilson
Paul Haythorne
Paul Wixen
Paul Cox
Paul Cheetham
Paul Jenkinson-Finn
Paul Gee
Paul Miller
Paul Thomas
Paul Morgan
Paul Ace
Paul Tovey
Paul Hubbard
Pauline Harrison
Pauline Garrow
Pawel Warych
Pawel Pudelko
Penny Davis
Perran Kelly
Perry Taylor
Peter Simmonds
Peter Hogg
Peter Anderson
Peter Charters
25632.02 13 December 2017 11:33 AM Proof6
137
Topps Tiles Plc Annual Report and Accounts for the 52 week period ended 30 September 2017 The Team
Peter Young
Peter Turtle
Peter Callan
Peter Hanley
Peter Wiles
Peter Goulding
Peter Sincock
Peter Crimp
Peter Vallely
Peter Knights
Peter Lees
Peter West
Peter Cash
Peter Clements
Petronela Enasoaie
Phil Weaver
Philip McCarney
Philip Cranston
Philip Gallop
Philip Kelly
Philip Dunn
Philip Okai
Philip Underhill
Philip Speed
Philip Stocks
Philippa Smith
Philippa Warner-Haskell
Philippa Hill
Phillip Walters
Phillip Turner
Phillipa Hewitt
Phillips Adam
Phoebe Webb
Poonam Patel
Portia Boehmer
Preline Martha
Przemyslaw Drabinski
Q
Quang Pham
R
Rabinder Gill
Rachel Fellows
Rachel Johnson
Radoslaw Doktorski
Rae Williams
Rain Richmond
Raj Surani
Rajan Toora
Rajesh Thanki
Rajiv Vadgama
Rajneet Sahota
Ramune Mikenaite
Ratip Hassan
Ravendra Bishun
Rebeca Wallis
Rebecca Oblein
Rebecca Mills
138
Rebecca Butler
Rebecca Moore
Rebecca Kelly
Rebecca Robson
Rebecca Love
Rebecca Carne
Reece Morgan
Reece Brown
Reece Watson
Reece Datson
Reece Brewin
Reece Townsend
Regan Alexander
Rhiannon Holland
Rhys Hedges
Rhys Grant
Richard Clark
Richard Bickers
Richard Davies
Richard Carter
Richard Oldale
Richard Small
Richard Geare
Richard Bourne
Richard Palfrey
Richard Bleach
Richard Mann
Richard Diamond
Richard Oates
Richard Senior
Richard Keane
Richard Prescott
Richard Greenwood
Richie Stephen
Rickie Byrne
Ricky Freeman-Roach
Riley Hayward
Rob Grassham
Robbie Perry
Robel Ghebrewold
Robert Adams
Robert Howker
Robert Chawner
Robert Parker
Robert Myers
Robert Moss
Robert Keohone
Robert Collins
Robert George
Robert Clarke
Robert Kweli
Robert Beard
Robert Knight
Robert Clark
Robert Allman
Robert Ballantyne
Robert Jones
Robert Black
Robert Pomfret
Robert Wyatt
Robert Mitchell
Robert Buckley
Robert Mould
Robert Hardie
Robert Prince
Robert Spencer
Robert Hill
Roberta De Benedictis
Robin Perrin
Robin Stagg
Robin Williams
Robin Tull
Rocky Bryan
Rodrigo Bermeo-Rojas
Rodyvik Chineah
Roger Gridley
Roger Lazenby
Rohit Modashia
Roisin Smith
Romal Williams
Romans Petuhovs
Ron Woolgar
Ronnie-Leigh Pews
Rory Reeves
Rory Warwick
Ross Ashbrook
Ross Langford
Ross Kerr
Ross Dyson
Ross Matthews
Roxanne Evans
Rozeena Baseth
Russell Cox
Russell Sell
Ryah Webster
Ryan Randall
Ryan Apark
Ryan Coleman
Ryan Ruffle
Ryan French
Ryan Izard
Ryan Dunn
Ryan Buston
Ryan Farquhar
Ryan Howard
Ryan White
Ryan Gallagher
S
Sabina Redlin
Sadie Gage
Sahibjit Samra
Salek Ahmed
Sally Finn
Sam Davis
25632.02 13 December 2017 11:33 AM Proof6
Topps Tiles Plc Annual Report and Accounts for the 52 week period ended 30 September 2017 ADDITIONAL INFORMATION
THE TEAM
Sam Attfield
Sam Thomas
Sam Heard
Sam Cummings-Turner
Samantha Leavis
Samantha Makrygiannis
Samantha Simons
Samantha Gray
Samantha Evans
Samantha Peters
Samantha Royle
Samantha Davies
Samantha Stewart
Samantha Turnbull
Sameer Jamdar
Samuel Heath
Samuel Kirk
Samuel Robinson
Samuel White
Samuel Yoganathan
Samuel Wordsworth
Samuel Egerton
Samuel Knowles
Sandie Ferguson
Sandra Ramsay
Sanjeev Pal
Sara Lloyd
Sarah Kite
Sarah Mclure
Sarah Dobson Da Silva
Sarah Darby
Sarah Bacon
Sarah Cassam
Sarah Jordan
Sarah Burnard
Sarah Buchan
Sarah Rose
Sarah Cunningham
Satvinder Sandhu
Savio Coutinho
Scott Ahmad
Scott Bond
Scott Birdseye
Scott Summers
Scott Thirlaway
Scott Johnston
Scott Vickers
Scott Ottaway
Scott Cameron
Scott McCartney
Sean Cahill
Sean Dare
Sean Gee
Sean McLean
Sean Taylor
Sean Brandist
Sean Collins
Sebastian Whelan-Medlam
Sebastian Bridge
Selim Miftari
Shafeek Mohamed
Shah Hussain
Shahid Mahmood
Shamara Mckenzie-Rochester
Shana Esworthy
Shane Malone
Shane Till
Shane Bryan
Shane Lindsay
Shane Mason
Shanice Mckenzie Rochester
Shannon Oliver
Shannon Calf
Sharif Islam
Sharon Buckley
Sharon Papantoniou-Barrett
Shaun Mayes
Shaun Harwood
Shaun Gordon
Shaun Bryan
Shaun Pawsey
Shaun Owens
Shaun Sargeant
Sheena Smith
Sheikh Saidy
Shelley Rutter
Shelley Carey
Shelley Burton
Shrina Shah
Shylo Brookes
Sian Austen
Sian Hart
Silvi Atanasova
Silvonne McLean
Simon Green
Simon Brookfield
Simon Witham
Simon Roberts
Simon Chappell
Simon Pitt
Simon Morgan
Simon Grimmett
Simon Leslie
Simon Lewis
Simon Lasham
Simon Beare
Simon Coombs
Simon Marks
Simon Neal
Simon Webb
Simon Bodell
Simon Farley
Simon Jackson
Simon Chapman
Simon Pretty
Simon Felix
Simon Judge
Simona Barticel
Simone Hunter
Sinan Demir
Sinead Fisher
Siobhan Ashman
Siobhan King
Sion Ellis
Sophie Doggart
Sophie Avery
Sophie Swann
Sophie-Anne Farnworth
Stefan Clark-Carter
Stefan Haworth
Stefano Tedeschi
Stephanie Nevett
Stephanie Hogben
Stephanie Thompson
Stephanie Dinnis
Stephanie Kilner Roberts
Stephen Gaylor
Stephen Marshall
Stephen Bloomfield
Stephen Smith
Stephen Seymour
Stephen Freeman
Stephen Adams
Stephen Machin
Stephen West
Stephen Corkett
Stephen Welsby
Stephen Kelly
Stephen Foote
Stephen Lopes
Stephen Hall
Stephen Carr
Stephen Anthony
Stephen Collins
Stephen Maidment
Stephen Sanders
Stephen Amos
Stephen Boyd
Stephen Clayton
Stephen Edmonds
Stephen Nicol
Stephen Harrington
Stephen Brown
Stephen Avent
Stephen Riley
Stephen Stubbs
Stephen Johnson
Stephen Edwards
Steve Boardman
Steven Whitehead
Steven Macarthur
25632.02 13 December 2017 11:33 AM Proof6
139
Topps Tiles Plc Annual Report and Accounts for the 52 week period ended 30 September 2017 The Team
Steven Wood
Steven Presley
Steven Kernot
Steven Richards
Steven Howells
Steven Dooley
Steven Dyer
Steven Higgins
Steven Ives
Steven Kane
Steven Gillham
Steven Souter
Steven Barrowcliffe
Steven Stevens
Steven Langley
Steven West
Stuart Rees
Stuart Ross
Stuart Whitby
Stuart Munton
Stuart Corlett
Stuart Davey
Stuart Williams
Stuart Barrett
Stuart Harris
Stuart Fletcher
Stuart Langford
Stuart Smith
Stuart Furlonger
Stuart Tannock
Stuart Clarke
Stuart Perkins
Summer Ellison
Susan Bill
Susan Black
Susan Law
Susan Shields
Susanna Horwood
Syed Ali
Syedmustakim Ali
T
Tahmid Islam
Talia Blackwell
Tammie Spencer
Tammie O’Lone
Tara Smith
Tarik Bensadik
Tasha Woodward
Tauseef Usman
Taylor Smith
Terence Dooley
Terry Salisbury
Terry Smith
Terry Butler
140
Terry Prince
Thomas Moran
Thomas Ryan
Thomas Evans
Thomas Cunningham
Thomas Wade
Thomas Murray
Thomas Swain
Thomas Otley
Thomas Parkes
Thomas Seaden
Thomas Ross
Thomas Utting
Thomas Whitlock
Thomas Miller
Thomas Wade
Thomas Gercs
Thomas Quinn
Thomas Johnson
Thomas Caldicott
Thomas Ashmore
Thomas Davies
Tiago Ferreira
Tiffany Lambert
Tim Chatfield
Tim Richards
Tim Hodges
Timea Szabo
Timothy Boardman
Timothy Tatlock
Timothy Tuff
Timothy Bentley
Timothy Stanhope
Timothy Hartwick
Timothy Duggan
Toby Collins
Todd Routledge
Tom Newman
Tom Wilson
Tomasz Kula
Tomasz Podstawka
Toni Gormley
Tony Dumbleton
Tracey Waterman
Tracy Wearmouth
Tracy Fitzpatrick
Tracy Clewes
Trevor Thomas
Trevor Hinde
Troy Miller
Troy Fearon
Tyler King
Tyrell Beckham
Tyrone Horne
U
Udo Jungbecker
Umut Ortac
Useni Feno
Uwais Ghumra
V
Valentin Ivan
Valerie Smith
Vanita Bland
Vaughan Batchelor
Veronica Evett
Veronica Zudaire
Vicky Hall
Victor Anim
Victoria Moore
Victoria Carrington
Victoria Marshall
Vi-Dung Luong
Viktor Maslov
Vilius Meilus
Vincent Gallagher
Vinod Joshi
Viorica Grapa
W
Waqar Raja
Warren Bester
Warren Pettersen
Wayne Randall
Wesley Appadoo
Will Carter
William Bailey
William Barreda
William Wylie
William Lewinton
William Short
William Wyatt
William Buxton
William Foxley
Wyn Dunn-Davies
Y
Yohannes Getachew
Youcef Sadiki
Youssef Djeraoui
Yvonne Burgess
Yvonne Hardingham
Z
Zahid Hossain
Zaibaa Hussein
Zara Caldwell
Zoe Atkinson
Zoe Payne
Zoe Turner
Zoe Lees Walters
Zoe Gilbert
Zydrunas Slazikas
25632.02 13 December 2017 11:33 AM Proof6
Topps Tiles Plc Annual Report and Accounts for the 52 week period ended 30 September 2017 Store Locations
LONDON
Acton
Balham Boutique
Barking
Battersea
Bayswater Boutique
Beckenham Topps
Beckton
Blackheath Boutique
Bow
Brentford
Brixton
Bromley Common
Catford Bromley Rd
Charlton
Cheam
Chelsea Boutique
Chesham
Chingford
Clapham Boutique
Colindale
Croydon
Croydon Purley
Dartford
Denham
Dorking
Dulwich Boutique
East Sheen
Eltham
Enfield
Feltham
Forest Hill
Fulham Boutique
Golders Green
Hampstead Heath Boutique
Harrow
Hayes Topps
Hemel Hempstead
Highgate
Hounslow
Ilford
Ilford Seven Kings
Islington Boutique
Kingston
Leyton
Mile End
Muswell Hill Boutique
New Southgate
North Finchley
Old Kent Road
Orpington
Orpington Clay
Park Royal Topps
Penge
Raynes Park
Redhill
Romford
Ruislip
Sevenoaks
Seven Sisters
Shoreditch
South Bermondsey
Southall
St Albans
St Johns Wood Boutique
Staples Corner Topps
Streatham
Surbiton
Sydenham
Tooting
Twickenham
Uxbridge
Vauxhall
Waltham Cross
Walton on Thames Boutique
Wandsworth
Wembley
West Drayton
Willesden
Wimbledon
Wimbledon Boutique
Wood Green
MIDLANDS
Barnsley
Binley
Boston
Burton upon Trent
Cannock
Chesterfield
Congleton
Crewe
Derby
Derby Osmaston
Doncaster
Doncaster Sprotbrough
Erdington
Fenton
Grantham
Great Barr
Grimsby
Grove Park
Kettering Baron
Kidderminster
Kings Heath
Kings Norton
Leicester
Lichfield
Lincoln Outer Circle
Lincoln St Marks
Long Eaton
Loughborough
Mansfield
Nantwich
Newark
Newcastle-under-Lyme
Northwich
Nottingham Poulton
Nuneaton
Redditch
Rotherham
Sheffield Hillsborough
Sheffield Meadowhall
Sheldon
Shrewsbury
Solihull
Spalding
Stoke
Stourbridge
Stratford upon Avon
Tamworth
Telford
West Bromwich
Wolverhampton
Worksop
NORTH
Aintree
Alnwick
Anfield
Barrow
Beverley
Birkenhead
Blackburn
Blackpool
Bolton
Bradford
Bury
Carlisle
Cheadle
Cheetham Hill
Chester
Chorley
Cleveleys
Darlington
Durham Dragonville
Failsworth
Gateshead
Halifax
Harrogate
Huddersfield
Hull
Hyde
Knutsford Boutique
Leeds
Macclesfield
Morecambe
Northallerton
Oldham
Ormskirk
Pontefract
Preston
Sale
Salford
Scarborough
Scunthorpe
Shipley
Skegness
Snipe (Audenshaw)
Southport
ADDITIONAL INFORMATION
THE TEAM
STORE LOCATIONS
St Helens
Stockport
Stockton
Sunderland
Tyneside
Wakefield Ings Road
Warrington
Widnes
Wigan
Wilmslow Boutique
Workington
York Clifton Moor
SCOTLAND AND
NORTHERN IRELAND
Aberdeen Bridge of Don
Aberdeen Wellington
Ayr
Belfast Boucher Road
Belfast Newtownabbey
Dundee
Edinburgh
Elgin
Fort Kinnaird
Glasgow
Govan Topps
Greenock
Hillington
Inverness
Kirkcaldy
Perth
Shawfield
Sighthill
Wishaw
SOUTH
Abingdon
Amersham
Ashford
Aylesbury
Banbury
Barnstaple
Basildon
Basingstoke
Bath
Bedford Elms
Bexhill
Bicester
Bishops Stortford
Bodmin
Bognor Regis
Borehamwood
Bounds Green
Bournemouth
Bracknell
Braintree
Brentwood
Bridgewater
Brighton
Bristol
25632.02 13 December 2017 11:33 AM Proof6
141
Topps Tiles Plc Annual Report and Accounts for the 52 week period ended 30 September 2017 Wellingborough
Welwyn Garden City
Weston Super Mare
Weymouth
Winchester
Windsor
Wisbech
Witney
Woking
Wokingham
Worcester
Yeovil
WALES
Bangor
Barry
Bridgend
Cardiff
Cardiff Newport Road
Carmarthen
Cross Hands
Flint
Haverfordwest
Llanelli
Merthyr Tydfil
Neath
Newport
Rhyl
Swansea Cwmdu
Swansea Llan Samlett
Wrexham
Store Locations
Loughton
Lowestoft
Luton
Maidstone
Maidstone Langley
Market Harborough
Martlesham
Millbrook (Southampton)
Milton Keynes
Moreton in Marsh
Newbury
Newhaven
Newton Abbot
Northampton
Northampton Brackmills
Norwich
Norwich Hall Road
Norwich Heigham
Oxford
Oxford Botley
Penzance
Peterborough (Rex Centre)
Peterborough Boongate
Plymouth
Poole
Portsmouth
Rayleigh
Reading
Reading Rose Kiln Lane
Ringwood
Rugby
Rustington
Salisbury
Saltash
Sittingbourne
Slough
Southend
St Neots
Stamford
Stevenage
Strood
Stroud
Sudbury
Sutton
Swindon
Swindon Stratton
Taunton
Thetford
Thurrock
Tonbridge
Torquay
Truro
Tunbridge Wells
Uckfield
Waterlooville
Watford Imperial
Broadstairs
Buckingham
Bury St Edmunds
Byfleet
Camberley
Cambridge
Canterbury
Chelmsford
Chelmsford Springfield
Cheltenham
Chichester
Chippenham
Christchurch
Cirencester
Clacton on Sea
Clevedon
Colchester
Crayford
Cribbs Causeway
Cromer
Dorchester
Dover
East Molesey
Eastbourne
Erith
Evesham
Exeter Trusham Rd
Exmouth
Fareham Topps
Farnborough
Farnham
Folkestone
Frome
Gatwick
Glastonbury
Gloucester
Gravesend
Grays
Great Yarmouth
Guildford
Hailsham
Harlow
Havant
Hedgend
Hengrove
Hereford
High Wycombe
Horsham
Huntingdon
Ipswich
Isle of Wight
Isleworth
Kings Lynn
Launceston
Letchworth
Lewes
142
25632.02 13 December 2017 11:33 AM Proof6
Topps Tiles Plc Annual Report and Accounts for the 52 week period ended 30 September 2017 PICTURED
EltonTM porcelain wall and floor tile,
Microline White ceramic wall tile
25632.02 13 December 2017 11:33 AM Proof 8
25632.02 13 December 2017 11:33 AM Proof 8
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Topps Tiles Plc
Thorpe Way, Grove Park
Enderby, Leicestershire
LE19 1SU
www.toppstiles.co.uk
25632.02 13 December 2017 11:33 AM Proof 8
25632.02 13 December 2017 11:33 AM Proof 8