Job number 10 December 2021 1:08 pm V9ANNUAL REPORT AND ACCOUNTS FOR THE 53-WEEK PERIOD ENDED 2 OCTOBER 2021Topps Tiles Plc Annual Report and Accounts for the 53-week period ended 2 October 202130525-Topps-Tiles-AR2021-Strategic.indd 330525-Topps-Tiles-AR2021-Strategic.indd 310/12/2021 15:35:1510/12/2021 15:35:15 Job number 10 December 2021 1:08 pm V9CONTENTSHighlights2Chairman’s Statement4Investment Case6STRATEGIC REPORTMarketplace10Business Model12Strategy and Progress14Our Strategy15– Leading Product16– Leading People18– Environmental Leadership20– Retail22– Commercial24Key Performance Indicators26Financial Review28Risks and Uncertainties34Sustainability38Section 172 Companies Act 200646Going Concern and Viability Statement48OUR GOVERNANCEBoard of Directors52Executive Committee54Corporate Governance Report55Directors’ Report70Directors’ Responsibilities Statement73Directors’ Remuneration Report74OUR FINANCIALSIndependent Auditor’s Report92Consolidated Statement of Financial Performance100Consolidated Statement of Comprehensive Income100Consolidated Statement of Financial Position101Consolidated Statement of Changes in Equity102Consolidated Cash Flow Statement103Notes to the Financial Statements104Company Balance Sheet136Company Statement of Changes in Equity137Notes to the Company Financial Statements138ADDITIONAL INFORMATIONFive-Year Record148Notice of Annual General Meeting149Explanatory Notes to the Notice of Annual General Meeting156The Team158Store Locations166Corporate: www.toppstilesplc.comRetail: www.toppstiles.co.ukCommercial: www.parkside.co.uk www.stratatiles.co.ukINSPIRINGPURPOSEThe core purpose of the business is to inspire customers through our love of tiles. This purpose gives the business strategic clarity in that opportunities we pursue leverage our core specialism in tiles and closely associated products.Front cover: Spectre™ Rose1CULTURE30525-Topps-Tiles-AR2021-Strategic.indd 330525-Topps-Tiles-AR2021-Strategic.indd 310/12/2021 15:35:1610/12/2021 15:35:16 Job number 10 December 2021 1:08 pm V9TOPPS TILES GROUPTHE UK’S LARGEST TILE SPECIALISTINSPIRINGInside front cover: Topps Tiles Retail colleagues in store2CUSTOMERS THROUGH OUR LOVE OF TILESGROUP GROWTH STRATEGYLEADING PRODUCTRETAILTOPPS TILESCOMMERCIALPARKSIDE AND STRATALEADING PEOPLEENVIRONMENTAL LEADERSHIPGOALThe Group’s goal is to reach 20% market* share by 2025* Market is the combined commercial and domestic market for tiles, adhesives and grouts in the UK.OverviewTOPPS TILES PLC ANNUAL REPORT AND ACCOUNTS FOR THE 53-WEEK PERIOD ENDED 2 OCTOBER 20210101We are a community of small teams with big ambitions who trust each other, celebrate success, and put the customer at the heart of everything we do; that’s the Topps’ way.30525-Topps-Tiles-AR2021-Strategic.indd 130525-Topps-Tiles-AR2021-Strategic.indd 110/12/2021 15:35:1810/12/2021 15:35:18 HIGHLIGHTS
Topps Tiles Plc (“Topps”, “Topps Tiles”, “the Group” or “the Company”), the UK’s largest tile specialist, announces its annual financial results
for the 53 weeks ended 2 October 2021.
STATUTORY MEASURES
ADJUSTED MEASURES
Group
Revenue (£m)
Year-on-Year: +18.3%
Gross
Margin (%)
Year-on-Year: (1.2) ppts
Retail Like-for-Like
Revenue Year-on-Year1 (%)
Year-on-Year: +32.1ppts
Adjusted Profit
Before Tax2 (£m)
Year-on-Year: +325.0%
0
.
8
2
2
2
.
9
1
82
.
2
9
1
6
.
1
56
.
8
5
3
.
7
5
9
1
0
2
1
2
0
9 2
1
1
2
6
.
9
1
6
.
0
0
9 2
1
1
2
)
5
.
2
1
(
0
.
6
1
3
.
5
1
6
.
3
0
9 2
1
1
2
Profit/(Loss)
Before Tax (£m)
Year-on-Year: +£24.1m
Basic Earnings
Per Share (p)
Year-on-Year: +9.70 pence
Adjusted Earnings
Per Share3 (p)
Year-on-Year: +290.4%
Adjusted
Net Cash/(Debt)4 (£m)
Year-on-Year: +£1.8m
3
.
4
1
5
.
2
1
9
1
0
2
1
2
)
8
.
9
(
8
1
.
5
9
5
.
5
0
9 2
1
1
2
)
1
1
.
4
(
1
6
.
6
3
1
.
6
7
5
.
1
9
1
0
2
1
2
8
.
7
2
0
.
6
2
0
2
1
2
9
1
)
3
.
1
1
(
Final Dividend
Declared (p)
Year-on-Year: +3.1 pence
Total Dividend
Declared (p)
Year-on-Year: +3.1 pence
1
.
3
l
i
N
0
2
1
2
3
.
2
9
1
4
.
3
1
.
3
l
i
N
0
2
1
2
9
1
Notes
1. Retail like-for-like revenue is defined as sales from online and stores that have
been trading for more than 52 weeks. In 2021, like-for-like revenue was
£216.6 million (2020: £182.3 million), with an average of 331 stores
included in the weekly calculation.
2. Adjusted profit before tax excludes the impact of items that are either one-off
in nature or fluctuate significantly from year to year.
3. Adjusted earnings per share is adjusted for the items outlined in the financial
review, plus the impact of corporation tax.
4. Adjusted net cash/(debt) is defined as cash and cash equivalents, less bank
loans, before unamortised issue costs (notes 18 and 19). It excludes lease
liabilities under IFRS 16.
02
TOPPS TILES PLC ANNUAL REPORT AND ACCOUNTS FOR THE 53-WEEK PERIOD ENDED 2 OCTOBER 2021
30525-Topps-Tiles-AR2021-Strategic.indd 2
30525-Topps-Tiles-AR2021-Strategic.indd 2
Job number 10 December 2021 1:08 pm V9
10/12/2021 15:35:21
10/12/2021 15:35:21
O
v
e
r
v
i
e
w
1
1
2
3
Everscape™ Inara™ Concrete
Atro™ White
In-store design advice area
STRATEGIC AND
OPERATIONAL HIGHLIGHTS
• Record year of revenue for the Group
• Group market share goal of ‘1 in 5 by 2025’ with good
progress made in the year
• Success in strategic initiatives of expanding value offer,
launch of innovative new products and further strengthening
our award-winning digital offer
• Commercial revenue recovering with H2 sales growth of 55%
• Launch of new environmental goal of being carbon balanced
by 2030
FINANCIAL SUMMARY
• Retail like-for-like sales up 19.6% despite trade restrictions
throughout Q2
• Gross margins of 57.3% (FY20 58.5%), reflecting increased
investment into value and higher shipping costs
• Strong recovery in adjusted profit before tax to £15.3 million
(FY20 £3.6 million)
• Underlying net cash generation of £12.5 million including
£(10.7) million of one-offs from 53rd week and deferred VAT
repayment
• Business well capitalised with strong balance sheet – £27.8
million net cash at year end
• Strong returns on invested capital – Group ROCE has increased
from 13.1% in FY19 to 17.5% in FY21
• Dividend reinstated based on two times full year adjusted
EPS cover
CURRENT TRADING AND OUTLOOK
•
Trading remains robust with two-year Retail like-for-like sales
growth of 18.4% in first eight weeks (one-year Retail like-for-like
sales down 0.7% against strong comparative period last year)
• Continued trading headwinds from reduced consumer
confidence, global supply chain challenges and cost inflation
• Growth strategy, flexible supply chain and balance sheet
strength provide confidence and platform for growth
2
3
TOPPS TILES PLC ANNUAL REPORT AND ACCOUNTS FOR THE 53-WEEK PERIOD ENDED 2 OCTOBER 2021
03
30525-Topps-Tiles-AR2021-Strategic.indd 3
30525-Topps-Tiles-AR2021-Strategic.indd 3
Job number 10 December 2021 1:08 pm V9
10/12/2021 15:35:27
10/12/2021 15:35:27
Job number 10 December 2021 1:08 pm V9CHAIRMAN’S STATEMENTIntroductionWelcome to the 2021 Annual Report for the Topps Tiles Group. At the end of a second year, which has been significantly impacted by Covid-19, it feels like an appropriate time to reflect on how the business has coped with the unprecedented challenges it has faced over the last period. Overall, I feel that the Group has managed very well over the last 18 months, in some of the most demanding conditions of recent times. Our stores have faced significant disruption for extended periods, including, in this financial year, being shut to our homeowner customers for the whole of the second quarter, and, when we have been able to trade unrestricted, managing to cope operationally with extremely high levels of customer demand. In addition, we have faced challenges across global supply chains, the ‘pingdemic’, shortages of labour, and the end of the Brexit transition period on New Year’s Eve last year. The two key challenges around product and people have been central to much of our thinking over the last year and will remain so as we move forward.Against this backdrop, the Group has retained its key focus on providing excellent service to our customers and, as a result, delivered its highest ever level of revenue in a financial year. Given this achievement, my keenest sense is that of gratitude to the people who work throughout the Group – in our Retail stores, logistics operation, support office and Commercial business – for their effort and commitment. I believe that the quality of our people and the culture of the business have been key to the successful navigation of this period and are the essential building blocks of our current and future success.Purpose, Goal and StrategyThe core purpose for the business is to inspire customers through our love of tiles. This purpose gives the business great strategic clarity in that the opportunities we pursue leverage our core specialism in tiles and closely associated products. It also includes the emotional connection that our colleagues and customers have to our products – tiles are more than building materials, they are decorative products that help our customers express their personality through their home.Our new goal for the business was launched last year, which is to grow our share of the combined commercial and domestic market for tiles, adhesives and grouts to 20% – accounting for £1 in every £5 spent on these products in the UK. This is a substantial market, worth nearly £1 billion, and therefore represents the opportunity to deliver significant growth. Our aim is to achieve this by 2025 and we have made progress this year, growing our share to approximately 17.6% in periods where we were able to trade without restrictions.Within our omni-channel Retail business, Topps Tiles, we are focused on the UK domestic tile market and our strategy of “Great Experience, Great Product and Great Value” will ensure that we stay focused on these three key pillars of our competitive advantage. Our Commercial businesses, Parkside and Strata, have a strategy of “Disrupt and Construct” – disrupt the existing commercial tile sector and construct a market-leading business. The commercial market remains under pressure following the closure of key sectors, but we remain committed to our goal of market leadership.A new area within our strategy this year is the addition of “Environmental Leadership”. In this report, we are launching our new environment goal of being carbon balanced as an organisation by 2030, ten years ahead of the BRC’s net zero by 2040 target and 20 years before the UK Government’s target for 2050. This is an exciting challenge for the business, which will guide our colleagues in their decision making over the next few years as we seek to minimise our impact on the planet and lead the thinking in this area across our industry. I am delighted that Rob Parker, our Chief Executive, will take accountability for this at Board level. Please see the Strategic Report for much more information on this subject.PerformanceIn a year containing two further lockdowns, our performance has been strong. Revenues were up 18.3% against last year and adjusted profit before tax was up from £3.6 million last financial year to £15.3 million this year. Statutory profit before tax was £14.3 million compared to a statutory loss before tax of £9.8 million last year, which included the impairment of our commercial assets. Our balance sheet also remains strong, with adjusted net cash at year end of £27.8 million, up slightly against £26.0 million at the start of the year, and we have available headroom against our banking facilities of £66.8 million. A full discussion of our financial performance can be found in the Financial Review section of this Report.The Group has managed very well over the last 18 months in some of the most demanding conditions of recent times.”Darren ShaplandChairman04TOPPS TILES PLC ANNUAL REPORT AND ACCOUNTS FOR THE 53-WEEK PERIOD ENDED 2 OCTOBER 202130525-Topps-Tiles-AR2021-Strategic.indd 430525-Topps-Tiles-AR2021-Strategic.indd 410/12/2021 15:35:2910/12/2021 15:35:29 O
v
e
r
v
i
e
w
Dividend
We suspended the dividend at the Interims stage of FY20 due
to the uncertainty caused by the pandemic. Since then, we have
been carefully reviewing the Group’s financial performance and
balance sheet position, as well as considering the wider social and
economic environment. As indicated at this year’s Interim results, the
Board is readopting our policy of a two times dividend cover, such
that approximately 50% of post-tax adjusted earnings are remitted
back to Shareholders.
This year, we are recommending that a dividend is paid based on
the adjusted profits of the entire financial year (not just the second
half) and therefore the Board is recommending a final dividend for
the year of 3.1 pence per share (2020: zero). Therefore, dividend
cover for the year on an adjusted earnings per share basis is two
times (2020: n/a).
Board and Leadership Changes
Following Rob Parker’s appointment as Chief Executive last year,
this year has seen more changes around the Board table. In
November, Stephen Hopson joined the Group as CFO and, later
in the year, we welcomed two new independent Non-Executive
Directors, Diana Breeze and Kari Daniels. Stephen has extensive
experience across both the retail and commercial sectors, including
in the building materials industry. Both Diana and Kari are Executive
Directors in other businesses – Diana is currently Group HR Director
at Bunzl, and Kari is CEO of Tesco Ireland – each with wide-
ranging experience in their fields. Diana has taken on the Chair
of the Remuneration Committee and Kari has taken the role of
Employee Engagement Director. Keith Down has taken the role of
Senior Independent Director in addition to his existing role as Chair
of the Audit Committee. Please refer to the Governance section of
this Annual Report for further information about the various Board
Committees.
Diana and Kari replaced Claire Tiney and Andy King, who both
served for nine years on the Board. Once again, I would like
to place on record my thanks to both Claire and Andy for their
substantial contribution over the years.
Within the Executive management team, our Commercial
Managing Director Brian Linnington has retired and, as of
1 October 2021, our Deputy Managing Director for the
Commercial business, Dan Little, has been appointed to replace
him. Given our focus on developing our people, the Board was
delighted that Dan was appointed to the role, given 20 years of
experience in the Group, and we are confident that Dan is the best
candidate to lead the Commercial business moving forward. After
ten outstanding years with the Group in various roles across Buying,
Operations and, most recently, creating and then leading the
Commercial team, Brian will be much missed, and we wish
him a long and happy retirement.
Corporate Governance
In line with last year, I am pleased to confirm that all Non-Executive
Directors are independent, and the Board is fully compliant with
the UK Corporate Governance Code. As described above, we
have seen several changes in the composition of the Board during
the last two years and I am pleased that the Board continues to
function well and has made good progress in its development
plan. The wide range of senior level experience with significant
sector expertise contained on the Board has served us well
through what has been a challenging business environment. With
the appointment of Diana and Kari to the Board, we are now
compliant with the recommendations from the Hampton-Alexander
Review, which recommended that women should make up at least
one-third of Board members.
Our People
Topps Tiles is a customer service-based business and, as a result, our
people are at the heart of our organisation. We provide training and
development programmes for all colleagues, and clear and open
communication across the business is a key aspect of our culture and
our success – no more so than in the current period, when the ability
to meet face-to-face has been regularly challenged.
The business operates a successful engagement forum, TeamTalk,
with Board representation to ensure colleagues’ views are
represented at Board level, in line with best practice.
Last year, I called out our warehouse colleagues for particular
praise, given they were a key group who continued to work
throughout the crisis, even when our stores and offices were
shut. This year, it has been very clear to me that all colleagues
across the Group have delivered extraordinary levels of effort and
commitment. We take pride in listing the name of every colleague
in this Annual Report, starting on page 158, and on behalf of the
Board, I would like to thank them again.
Summary
The business has performed extremely well through the last two
years. We have a strong balance sheet, good cash generation and
a growth strategy that continues to be the right one for the Group.
We are taking good steps towards delivering our market share
goal, which will deliver value to our Shareholders, employees,
suppliers, customers and wider society. Although there are
undoubtedly challenges ahead, particularly in areas such as global
supply chains, resourcing and inflation, I conclude by returning to
my opening point: our business and its management team have
coped very well with the significant challenges of recent years,
and I therefore look forward to the forthcoming period with a
sense of confidence that the Topps Tiles Group is well positioned
to deliver sustainable value in the future.
Darren Shapland
Non-Executive Chairman
TOPPS TILES PLC ANNUAL REPORT AND ACCOUNTS FOR THE 53-WEEK PERIOD ENDED 2 OCTOBER 2021
05
30525-Topps-Tiles-AR2021-Strategic.indd 5
30525-Topps-Tiles-AR2021-Strategic.indd 5
Job number 10 December 2021 1:08 pm V9
10/12/2021 15:35:30
10/12/2021 15:35:30
INVESTMENT CASE
REASONS TO INVEST
1 ATTRACTIVE MARKET
DYNAMICS
2 AMBITIOUS
GROWTH STRATEGY
Topps Tiles Group operates in a large market
worth over £1 billion, with stable long-term
demand and minimal disruption from alternative
technologies. We are the clear market leader
but still only account for c.17.6% of what is a
fragmented market, giving us lots of headroom
to grow.
Our goal is to deliver a 20% market share by
2025 through expansion in new product areas,
expanding our range in our value offer and
through building a scale business in Commercial.
Our stores have relatively low sales densities and
we already have national coverage, allowing
significant upside potential.
Read more about our market on
pages 10 to 11
Read more about our Strategy
on pages 15 to 25
3 STRONG
BALANCE SHEET
We have exited the pandemic with cash on
the balance sheet, no debt and headroom of
£66.8 million against our banking facilities.
This allows the business to invest for growth.
Read more about our financial
performance on pages 28 to 33
4 GOOD CASH
GENERATION
5 ENVIRONMENTAL
LEADERSHIP
We generate high-quality profits that convert to
cash well due to high gross margins, negative
working capital and low capital expenditure
requirements.
Read more about our financial
performance on pages 28 to 33
We have a goal to be carbon balanced by
2030 and intend to lead the tile market in
environmental credentials. We strongly believe
that substantially reducing our impact on the
environment is good for the planet and all our
stakeholders.
Read more about Environmental
Leadership on pages 20 to 21
06
TOPPS TILES PLC ANNUAL REPORT AND ACCOUNTS FOR THE 53-WEEK PERIOD ENDED 2 OCTOBER 2021
30525-Topps-Tiles-AR2021-Strategic.indd 6
30525-Topps-Tiles-AR2021-Strategic.indd 6
Job number 10 December 2021 1:08 pm V9
10/12/2021 15:35:31
10/12/2021 15:35:31
OUR STRENGTHS
1 OMNICHANNEL
CUSTOMER
PROPOSITION
Our multi award-winning retail website has
approximately three times the web traffic of the
next largest competitor. Almost every customer
who visits our stores uses our website in some
way, and the majority of website sales involve a
store at some stage in the process, giving us an
advantage over online competitors.
Read more about our Retail
strategy on pages 22 to 23
2 NATIONWIDE
COVERAGE
O
v
e
r
v
i
e
w
We are the only tile distributor in the UK to offer
full national coverage, trading from 313 retail
locations to offer unrivalled convenience for trade
customers and allowing the whole UK population
to access our products in person.
Read more about our Channels
on pages 12 to 13
3 SPECIALIST
EXPERTISE
4 WORLD-CLASS
CUSTOMER SERVICE
We have a real specialism in tiles and
associated products, and the scale to leverage it.
We are able to buy from all over the world, have
unrivalled relationships with suppliers, and
work with our suppliers to develop differentiated
products, 74% of which are exclusive to us.
Read more about our Leading Product
Strategy on pages 16 to 17
Our customers are often buying a product that
is unfamiliar to them, requiring a high level of
support, and we are proud that our overall
satisfaction scores of >85% are world class.
Read more about our Leading People
Strategy on pages 18 to 19
TOPPS TILES PLC ANNUAL REPORT AND ACCOUNTS FOR THE 53-WEEK PERIOD ENDED 2 OCTOBER 2021
07
30525-Topps-Tiles-AR2021-Strategic.indd 7
30525-Topps-Tiles-AR2021-Strategic.indd 7
Job number 10 December 2021 1:08 pm V9
10/12/2021 15:35:32
10/12/2021 15:35:32
STRATEGIC
REPORT
30525-Topps-Tiles-AR2021-Strategic.indd 8
30525-Topps-Tiles-AR2021-Strategic.indd 8
Job number 10 December 2021 1:08 pm V9
10/12/2021 15:35:35
10/12/2021 15:35:35
1
CONTENTS
Marketplace
Business Model
Strategy and Progress
Our Strategy
– Leading Product
– Leading People
– Environmental Leadership
– Retail
– Commercial
Key Performance Indicators
Financial Review
Risks and Uncertainties
Sustainability
Section 172 Companies Act 2006
Going Concern and Viability Statement
10
12
14
15
16
18
20
22
24
26
28
34
38
46
48
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 contain certain
forward-looking statements. These statements are made
by the Directors in good faith based on the information
available to them up to the time of their approval of
this Report and such statements should be treated with
caution due to the inherent uncertainties, including both
economic and business risk factors, underlying any
such forward-looking information.
t
S
t
r
a
e
g
i
c
R
e
p
o
r
t
1
Everscape™ Enis™ Black Slate Modular
30525-Topps-Tiles-AR2021-Strategic.indd 9
30525-Topps-Tiles-AR2021-Strategic.indd 9
Job number 10 December 2021 1:08 pm V9
10/12/2021 15:35:37
10/12/2021 15:35:37
MARKETPLACE
1
2
The UK Tile Market
The UK tile market splits into two broad sectors – domestic, accounting
for around 55% of the market, and commercial, accounting for the
remaining 45% (source: Mintel). The domestic market includes the
renovation, maintenance and improvement of residential properties,
and the commercial market includes commercial building projects in
their many forms, as well as new build residential property, including
housebuilding and apartment blocks.
An external survey of the tile market is published by Mintel in
September each year. It covers the whole of the UK tile market,
based on manufacturer and supplier data. The September 2021
report estimates the 2020 total market at £327.0 million at MSP
(manufacturers’ selling prices), down from £375.5 million in
2019, with a projection for 2021 at £385.2 million, an increase
of 17.8% year-on-year, and 2.5% higher than the pre-pandemic
market size.
The decline in 2020 was due to Covid-19, which, as the Mintel
report notes, had a rapid and strong impact on both supply and
demand as the economy closed down in the first half of the year.
However, the decline across the whole of 2020 was far less severe
than initially thought – in the previous year’s report, Mintel’s forecast
for 2020 was £285.8 million – with strong demand returning in
the second half of the year.
Domestic Tile Market
The domestic tile market, like much of the UK economy, has been
extremely volatile over the past two years. In normal times, a home
improvement project is generally regarded as discretionary spend
and therefore consumer confidence is seen as a good indicator of
future growth. However, due to the pandemic, there are other factors
influencing levels of demand. Following the initial national lockdown
in March 2020, the market has been extremely robust, with a wave
of domestic home improvement work and a rediscovery of the love of
the home. This has been driven by a number of factors: the increased
amount of time people are spending in their home; a diversion of
discretionary spend from other areas such as holidays into home
improvement; significant levels of excess savings built up during the
various lockdowns; increased housing transactions driven by stamp
duty cuts and very low interest rates; and increased house prices,
again partly driven by Government policy.
During FY21, consumer confidence improved dramatically from a
low of -33 in November 2020 to a high of -7 in July 2021, reaching
pre-pandemic levels, before falling back to -13 in September 2021
(source: GFK).
UK housing prices can also be a useful indicator of our market. In a
rising market, home owners tend to feel more affluent and are more
confident in spending money on their homes. During the year, UK
house prices grew very rapidly, with the average price of a house
in the UK at £237,528 (FY20: £218,947) (source: Nationwide).
By September 2021, average house prices were 10% higher than
the previous year.
A further key driver of the customer decision to take on a home
improvement project is buying or selling a home; housing transactions
are therefore a useful indicator of likely future demand. After a
subdued period in the second half of FY20, housing transactions
started the year at more normal levels. However, the cut in stamp duty
announced in July 2020 had a significant impact with large numbers
of transactions going through in March 2021 (the original taper date)
and June 2021 (the revised taper). Overall, transactions for the year
were 1.55 million, 57% higher than FY20 (source: HMRC).
Construction output for private housing repair, maintenance and
improvement (RMI) increased by 21.1% across the period on a
value, non-seasonally adjusted prices basis (FY20: declined by
12.4%) (source: ONS). By the year end, the private housing RMI
market had recovered to above the levels seen before the pandemic.
Commercial Tile Market
The UK commercial tile market is fragmented and regionalised with only
a small number of scale competitors. The smaller competitors tend to
specialise in certain sectors of the market – examples being transport,
restaurants, automotive, leisure, offices or higher-end residential.
Our success in this market results from appealing to both designers
and architects, with our quality and differentiated offer, and to
contractors, who may require more commoditised products, in
large quantities, in short timescales, but at lower prices. Although
the focus for our commercial business is on customers in the former
category, where we can leverage our access to differentiated
product through our supplier relationships, the Group’s buying
advantage and stock-holding position also supports volume sales.
The commercial tile market was hit hard by Covid-19 and, unlike the
domestic sector, has yet to recover to pre-pandemic levels. Market
performance remains highly varied by sub-sector and by client within
each sub-sector and we have seen differing activity levels across
retailers, restaurant brands, hotel, construction and developer clients.
Construction output for the private commercial sector declined by
7.2% across the period on a value, non-seasonally adjusted basis
(FY20: declined by 15.6%) (source: ONS).
10
TOPPS TILES PLC ANNUAL REPORT AND ACCOUNTS FOR THE 53-WEEK PERIOD ENDED 2 OCTOBER 2021
30525-Topps-Tiles-AR2021-Strategic.indd 10
30525-Topps-Tiles-AR2021-Strategic.indd 10
Job number 10 December 2021 1:08 pm V9
10/12/2021 15:35:42
10/12/2021 15:35:42
1
2
3
Linear Dove Matt
Brada Storm Rigid Core LVT and Zellica™ Antique White
Everscape™ Alrosa Travertine
KEY STATISTICS
UK House Prices and Transactions
£
e
c
i
r
P
e
s
u
o
H
K
U
e
g
a
r
e
v
A
£260,000
£250,000
£240,000
£230,000
£220,000
£210,000
£200,000
£190,000
250,000
200,000
150,000
s
n
o
i
t
c
a
s
n
a
r
T
100,000
50,000
0
9
1
n
a
J
9
1
r
p
A
9
1
l
y
u
J
9
1
t
c
O
0
2
n
a
J
0
2
r
p
A
0
2
l
y
u
J
0
2
t
c
O
1
2
n
a
J
1
2
r
p
A
1
2
l
y
u
J
l
t
y
h
n
o
M
t
S
t
r
a
e
g
i
c
R
e
p
o
r
t
Source: Nationwide, HMRC
House prices
Transactions
House Prices
Transactions
Consumer Confidence
0
-5
-10
-15
-20
-25
-30
-35
-40
9
1
n
a
J
9
1
r
a
M
9
1
y
a
M
9
1
l
y
u
J
9
1
t
p
e
S
9
1
v
o
N
0
2
n
a
J
0
2
r
a
M
0
2
y
a
M
0
2
l
y
u
J
0
2
t
p
e
S
0
2
v
o
N
1
2
n
a
J
1
2
r
a
M
1
2
y
a
M
1
2
l
y
u
J
1
2
t
p
e
S
Source: GFK
Consumer Confidence (3 month Average)
Building Materials Market Size
)
M
L
T
(
m
£
33,000
31,000
29,000
27,000
25,000
23,000
21,000
19,000
17,000
15,000
9
1
n
a
J
9
1
r
a
M
9
1
y
a
M
9
1
l
y
u
J
9
1
t
p
e
S
9
1
v
o
N
0
2
n
a
J
0
2
r
a
M
0
2
y
a
M
0
2
l
y
u
J
0
2
t
p
e
S
0
2
v
o
N
1
2
n
a
J
1
2
r
a
M
1
2
y
a
M
1
2
l
y
u
J
1
2
t
p
e
S
Source: ONS
Private Housing RMI
Private Commercial New Work
Private Housing RMI
Private Commercial New Work
Mintel: UK Ceramic Tile Market (YoY%)
20.0%
15.0%
10.0%
5.0%
0.0%
-5.0%
- 1.8%
-10.0%
-15.0%
17.8%
0.1% 1.0%
2.8% 3.4% 3.7%
0.5%
- 6.5%
- 12.9%
3
2017 2018 2019 2020 2021 2022 2023 2024 2025 2026
Source: Mintel
TOPPS TILES PLC ANNUAL REPORT AND ACCOUNTS FOR THE 53-WEEK PERIOD ENDED 2 OCTOBER 2021
11
30525-Topps-Tiles-AR2021-Strategic.indd 11
30525-Topps-Tiles-AR2021-Strategic.indd 11
Job number 10 December 2021 1:08 pm V9
10/12/2021 15:35:45
10/12/2021 15:35:45
Job number 10 December 2021 1:08 pm V9BUSINESS MODELTopps Tiles is the largest tile specialist in the UK. The majority of revenues are generated from the retail market for the renovation, maintenance and improvement of UK homes. Over recent years, the business has diversified and expanded into the commercial tile market, which approximately doubled the size of our addressable market while staying within our core specialism of tiles. The commercial market includes tiles supplied for both new build and refurbishment of commercial premises across sectors such as leisure, transport, retail and office buildings, and new build residential housing. Both the Retail and Commercial operations within the Group derive benefit from the scale of the business, the specialist focus of our business model and our passion for tiles. We enjoy a competitive advantage in sourcing differentiated products from around the world that we can access on an exclusive basis and deliver world-class customer service through our store network, award-winning digital platforms and Commercial sales teams.SUPPLY CHAINWe source our products directly from manufacturers on a global basis, with a focus on building long-term strategic relationships with our manufacturing partners. Owning as much of the post-manufacture supply chain as possible is a key aspect of our business model and an important source of competitive advantage. Our buying scale and customer reach allow us to develop product ranges with leading tile manufacturers that are genuinely innovative and to source them on an exclusive basis. Our investment in our supply chain also includes our 150,000 sq ft warehouse in Leicester and a fleet of 21 commercial vehicles. This gives us an unrivalled control over our inventory and delivery capability.PRODUCT INNOVATIONWe inspire our customers with a market-leading product range, 74% of which is exclusive to us. We achieve this by working collaboratively with our key suppliers to develop new ranges; with Topps Tiles providing the customer insight into emerging style trends and the manufacturer providing the technical knowledge and production 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. We have made full use of these new technologies in recent years to further enhance the breadth and quality of our market-leading tile range.PEOPLEAt our heart, we are a customer service-based business and, as a result, our people are one of our most important assets. We aim to provide our customers with high-quality advice and inspiration, and to do this successfully we need highly engaged specialist teams in store and in our direct sales force 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 effort in training our people every year.CHANNELSWe operate multiple channels to market to provide all our customers with access to our market-leading product range and service in the most convenient format for them.RetailFor our omni-channel Retail business, stores remain our primary channel to market and almost all of our customers will visit a store at some point during their purchase. We operate from 313 stores across the UK with an average footprint of 5,000 sq ft; however, the inherent flexibility in our operating model enables us to trade successfully from 3,000 sq ft up to 10,000 sq ft. This flexibility means Topps Tiles stores can be found in a wide variety of locations including high streets, retail parks, trade parks and on main arterial roads on routes to larger shopping destinations. Our store portfolio operates predominantly on a leased basis with an average unexpired lease term of less than four years, giving us flexibility to manage the portfolio.Retail customers very often choose to use our website to conduct initial research into their projects or to maximise convenience by using this as a payment channel. The vast majority of our customers will use our website at some stage in their purchase journey with us. We are continually innovating our digital offer and our website is multi-award winning. Social media is very important to us as this provides an opportunity to create a community of influencers and traders with an interior design focus.Trade customers – independent tile fitters contracted by customers to complete their domestic tiling projects – are a vital sales channel for our Retail business. UK SPECIALISTWITH KEY FOCUS ON GROWTH12TOPPS TILES PLC ANNUAL REPORT AND ACCOUNTS FOR THE 53-WEEK PERIOD ENDED 2 OCTOBER 202130525-Topps-Tiles-AR2021-Strategic.indd 1230525-Topps-Tiles-AR2021-Strategic.indd 1210/12/2021 15:35:4710/12/2021 15:35:47 Job number 10 December 2021 1:08 pm V9Klarity™ Light Oak1BRANDThe tile market has very few recognised product brands and in the absence of these pointers for customers, the business brand becomes very important.Retail Topps Tiles is the UK’s leading specialist tile retailer with 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 decision maker and resulting in increased sales from both homeowners 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 that they can buy conveniently.CommercialThe Parkside and Strata brands already have significant heritage in the Commercial sector. We are continuing to build these brands and, over time, our ambition is to become the market leader in Commercial. VALUE FOR CUSTOMERS AND CLIENTSRetailWe deliver value to our Retail customers by combining differentiated products with excellence in customer service, the convenience of a nationwide store network and a world-class website. This is combined with competitive pricing to ensure that all of our customers receive great value.CommercialWe deliver value to our Commercial clients by providing access to a wide range of manufacturers’ products, often on an exclusive basis. We combine this with friendly, efficient and professional customer service, significant environmental credentials and our Group scale, which allows us to offer advantaged pricing and often advantaged availability.Our trade customers now account for approximately 57% of our Retail sales. 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 the basis of our specialist credentials, our ability to provide excellent technical knowledge and a range of specialist products, which ensures we cater for all of our traders’ needs.Commercial In the Commercial market, we serve the client through our team of high-quality salespeople. These creative, friendly experts will often have historical relationships with architects and designers based on high levels of mutual trust, established over a sustained period through successful delivery of projects together. Our salespeople are supported by our sales support teams, who provide quotes and general support with logistics and delivery. Our Commercial business is also supported by a small physical presence in key markets, for example our Clerkenwell Sustainability and Design Studio, which is a creative hub for the design community, where designers, architects, clients, and our representatives can come together for innovative conversations on their latest projects. In addition, our Commercial business is very active in the digital space, with considerable social media engagement with the designer and architect community.1TOPPS TILES PLC ANNUAL REPORT AND ACCOUNTS FOR THE 53-WEEK PERIOD ENDED 2 OCTOBER 202113Strategic Report30525-Topps-Tiles-AR2021-Strategic.indd 1330525-Topps-Tiles-AR2021-Strategic.indd 1310/12/2021 15:35:4910/12/2021 15:35:49 Job number 10 December 2021 1:08 pm V9STRATEGY AND PROGRESSSummary of Performance2021 was a record-breaking year for the Topps Tiles Group. Our revenue of £228.0 million or £223.7 million on a 52-week basis, was the highest we have ever achieved, and Retail like-for-like sales growth was 19.6%. This was an excellent result, particularly given that our stores were closed to our homeowner customers for just over three months between January and April due to Covid-related Government restrictions.Our performance was supported by a buoyant home improvement market during this period; however, we believe this result also demonstrates the success of our growth strategy and is a good step towards the achievement of our goal of accounting for £1 in every £5 spent across the UK tile market by 2025 (“1 in 5 by 2025”). The year started very well, with like-for-like growth in our Retail business of 19.9% in the first quarter, building further on the strength of the final quarter of the previous financial year. Commercial sales were also strong and gross margins were in line with our targets. On 19 December 2020, the new ‘Tier four’ restrictions came into effect for large parts of England, which quickly turned into a new national lockdown early in the new year. As a result of further changes to regulations, from 5 January to 11 April 2021, all our stores in England were closed to homeowners, with registered traders allowed to enter the store to visit the trade counter only and no browsing permitted. Broadly the same restrictions were in place in Wales, Scotland and Northern Ireland. This period of trading disruption had a substantial impact on sales, which were more than £20 million lower in Q2 than Q1. Retail like-for-like sales were down 17.3% in the second quarter and commercial projects once again slowed, particularly in the hospitality and leisure sectors. Adjusted profit before tax in the first half was £5.1 million (2020: £1.2 million; 2019: £7.0 million1)including c.£4.4 million of business rates relief.Operationally, the business responded with great flexibility to the trading restrictions. Online sales were up 135% in the second quarter compared to last year, and our Retail website delivered record weekly performances for revenue, orders, website traffic and conversion.Our supply chain once again shifted from a focus on bulk picks for store replenishment to a focus on single picks for direct customer deliveries. Our Commercial business shifted its focus into sectors that were less impacted by the lockdown, which offset the majority of the decline in hospitality and leisure.The trading period since reopening on 12 April 2021 was extremely strong. In Q3, Retail like-for-like sales on a two-year basis were up 18.5% in the 11 weeks after reopening, and that strengthened to 21.7% growth in the final quarter. On a one-year basis, Retail like-for-like sales were also in growth in Q4, up 3.0% against a comparative period last year, which saw a strong bounce back in sales following the initial national lockdown. Commercial sales in the second half were up 55% year-on-year, and forward indicators are encouraging as we move into the new financial year.Profitability rebounded strongly in the second half. Adjusted profit before tax was £10.2 million (2020: £2.4 million; 2019: £7.0 million1), driven by the strong sales performance, with lower gross margins (2021: 57.1%; 2020: 57.7%; 2019: 62.0%) due to higher shipping costs, our investment into value and product mix changes, and well controlled operating costs. No government support was included in our second half adjusted profit before tax.In aggregate, the business delivered £15.3 million of adjusted profit before tax (2020: £3.6 million; 2019: £14.0 million1).Our balance sheet has remained strong throughout the year following the move into a net cash position in FY20, and we finished the year with £27.8 million of adjusted net cash, with headroom against our banking facilities of £66.8 million. The net cash inflow of £1.8 million includes £10.7 million of outflows relating to the timing of the 53rd week and deferred VAT repayments, meaning the underlying increase in cash was £12.5 million in the year. With the strong performance in both profit and cash, we are proposing the resumption of dividend payments to Shareholders with a final dividend payment of 3.1 pence per share.Note 1: The Group’s adjusted profit before tax in 2019 excluded Commercial trading losses of £1 million in each half of the year. From 2020, Commercial trading was included in adjusted profit. The Commercial losses in 2019 have been included in the figures quoted above to aid comparability over the three year period.This result demonstrates the success of our growth strategy and is a good step towards the achievement of our goal.”Rob ParkerChief Executive14TOPPS TILES PLC ANNUAL REPORT AND ACCOUNTS FOR THE 53-WEEK PERIOD ENDED 2 OCTOBER 202130525-Topps-Tiles-AR2021-Strategic.indd 1430525-Topps-Tiles-AR2021-Strategic.indd 1410/12/2021 15:35:5110/12/2021 15:35:51 OUR STRATEGY
Core Purpose, Goal and Strategy
The core purpose of the Group is to inspire customers through
our love of tiles. This gives us a very clear focus on our chosen
specialism and encourages all of our colleagues to be passionate
about the products we sell. We operate in a large market. In
2019, the value of the UK market for tiles, adhesives and grouts
was around £950 million, and the market for all the products we
sell was significantly over £1 billion. Last year, we announced a
new goal for the business based on our market share across both
the domestic and commercial markets, and encompassing tiles,
adhesives and grouts. The goal is to account for £1 in every £5
spent on tiles and associated products in the UK by 2025: ‘1 in
5 by 2025’. A 20% market share would represent a significant
increase from our estimated 2019 market share of 17% and
would require an outperformance of the market by around 3.5%
per year between 2020 and 2025. In 2021, we recognise
that some competitors who did not face physical restrictions on
trading are likely to have gained some share over the lockdown
period, particularly generalist DIY stores and pure play online
operators. We estimate that our market share in 2021 in periods
where we were allowed to trade without restrictions was c.17.6%,
representing a good initial step towards our goal, although the
circumstances of the year make it particularly difficult to measure.
However, our sales performance in the period when we traded
free of restrictions gives us confidence in the longer-term ambition
of achieving our goal. Our strategy to deliver our goal in our Retail
and Commercial businesses has been underpinned by our Group
strategies of “Leading Product” and “Leading People”, which are
described in the following sections. However, this year has also
seen an important expansion of our strategy, with the inclusion of a
new element “Environmental Leadership”. We aim to be ambitious
and lead our market in this area, working with manufacturers to
bring products to market that will help our customers reduce their
environmental impact on the world. We will also reduce the direct
impact of the Group on the environment, mainly through reductions
in our carbon emissions.
t
S
t
r
a
e
g
i
c
R
e
p
o
r
t
RETAIL
TOPPS TILES
Great Experience, Great Product and Great Value
COMMERCIAL
PARKSIDE AND STRATA
Disrupt and Construct
LEADING PRODUCT
LEADING PEOPLE
ENVIRONMENTAL LEADERSHIP
TOPPS TILES PLC ANNUAL REPORT AND ACCOUNTS FOR THE 53-WEEK PERIOD ENDED 2 OCTOBER 2021
15
30525-Topps-Tiles-AR2021-Strategic.indd 15
30525-Topps-Tiles-AR2021-Strategic.indd 15
Job number 10 December 2021 1:08 pm V9
10/12/2021 15:35:52
10/12/2021 15:35:52
OUR STRATEGY
LEADING
PRODUCT
1
1
Kanzi™ Natural
As the UK’s leading tile specialist, our expertise in the ranging, sourcing
and procurement of tiles on a global basis is a core part of our
competitive advantage. We work with carefully selected manufacturing
partners around the world to develop and produce differentiated
products that are innovative, of high quality and exclusive to Topps
Tiles. We protect the intellectual property and design assets we create
through partner exclusivity and design registration. With the integration
of the Parkside and Strata commercial brands, we are able to leverage
these core strengths across both sides of the business.
Progress and Outlook
This has been an extremely testing year for all supply chains and
we have had to rely on the strength and flexibility of our supplier
relationships and our logistics teams more than ever. During the
various periods of restrictions and releases, sales volumes have been
volatile. In addition, securing supply has, at times, been challenging,
with uncertainty around the availability of product and shipping
capacity as well as significant increases in the costs of both shipping
and transportation. We are well placed to deal with this uncertain
environment due to our scale and expertise, including our global
sourcing capability. We also leverage our relationships with key
suppliers to secure stock. Our strategic supplier base accounts for
c.70% of our purchases (2020: 80%) reflecting sourcing changes
as a result of supply chain disruption, and particularly our reduced
exposure to the Far East.
Despite the challenges, we have been able to maintain a continuity
of supply to our business. We took the decision to maintain a
higher level of inventory than historical averages, which, we
believe, gives us a significant advantage over our competitors.
We ended the year with £32.8 million of inventory across the
stores and central warehouse; £3.4 million more than last year.
Our 150,000 sq ft warehouse in Leicester forms a key part of the
robustness of our supply chain.
We decided early in the year not to slow down the flow of new
product into our Retail business, despite stores trading being
disrupted, and delivered 52 new product introductions in the year.
Of these new products, more than one-third (38%) were design--led
by us in collaboration with key supply partners: 74% of our retail
ranges are either own brand or exclusive to us and this remains key
to our product differential.
Highlights of the year included Everscape™, our 2cm porcelain
outdoor range, which was doubled in size to 35 lines, including
grouts, trims, pedestals and primers; the launch of luxury vinyl tiles
into 50 stores and online; the development of new products with
high recycled content and antibacterial properties; and entirely
new brands, such as DEX™, our new tools range.
In our Commercial business, we continue to expand our product
offering into different sectors, for example for use in swimming
pools, dry fix products (largely suitable for transport hubs) and
luxury vinyl tiles. Our Commercial business now has access to
over 8,500 lines from over 160 suppliers globally.
Technical authority is a further key aspect of differential in our
market and we are leaders in this field, working closely with our
strategic supplier base to set exacting standards on quality and
performance. We have our own in-house technical team to meet
the demands of our broader customer base and offer key technical
information and on-demand support across all channels through our
dedicated in-house testing facilities and quality control.
2
Kanzi™ Natural and Catania™ Violet
16
TOPPS TILES PLC ANNUAL REPORT AND ACCOUNTS FOR THE 53-WEEK PERIOD ENDED 2 OCTOBER 2021
30525-Topps-Tiles-AR2021-Strategic.indd 16
30525-Topps-Tiles-AR2021-Strategic.indd 16
Job number 10 December 2021 1:08 pm V9
10/12/2021 15:35:56
10/12/2021 15:35:56
t
S
t
r
a
e
g
i
c
R
e
p
o
r
t
2
TOPPS TILES PLC ANNUAL REPORT AND ACCOUNTS FOR THE 53-WEEK PERIOD ENDED 2 OCTOBER 2021
17
30525-Topps-Tiles-AR2021-Strategic.indd 17
30525-Topps-Tiles-AR2021-Strategic.indd 17
Job number 10 December 2021 1:08 pm V9
10/12/2021 15:36:01
10/12/2021 15:36:01
OUR STRATEGY
LEADING
PEOPLE
The Group’s success is underpinned by the quality and commitment
of our colleagues. This ensures excellence in both service to our
customers and clients, and in the support provided to store teams
by our Leicester support office, supply chain and field teams. Our
Leading People initiative is about having the best people, leading
the best people, and is focused on three key areas of engagement,
capability and wellbeing.
Progress and Outlook
Our focus on colleague engagement has been more important
than ever through the disruption of the last two years. Our annual
MyVoice staff survey gives colleagues the chance to have their
say about the Company, its leadership, their work and wellbeing.
We had an excellent response in what was a difficult period
operationally and for the country, with 81% of colleagues
responding in FY21 (up 11 ppts from last year), and 80% of
colleagues positively engaged with the business (up 6 ppts from
last year). We were also ranked 12th in the annual Retail Week
and Glassdoor survey of best retailers to work for in the UK.
We invest in capability through formal training programmes
and through the development opportunities we provide; 50% of
vacancies across the Group are filled internally, enabling us to offer
progression within the business as well as retain the technical skills
of store colleagues.
As we continue to focus on an culture that is open, supportive,
transparent and dedicated to the wellbeing of all of our colleagues,
we are concentrating on five aspects of wellbeing: physical,
mental, social, career and financial. There was a particular
emphasis this year on mental and physical wellbeing, including
further training for our 48 mental health first aiders, ‘Tea and Talk’
sessions and a Company-wide scheme to ‘March forward’, which
encouraged our colleagues to get physically active during the
month of March, whilst raising money for our corporate charity,
Macmillan Cancer Support.
The recruitment and retention of colleagues has become an ever
more important priority for the Group, particularly with well-
documented shortages of labour across the UK economy and many
people re-evaluating their career and life choices following the
pandemic. Drivers, especially heavy goods vehicle drivers, are
in particularly short supply and, at times this year, we have relied
more on contract drivers than we would like, which adds cost and
can reduce the reliability of our service. We have increased our
efforts to recruit directly in this area, and emphasised the strength
of our overall employment offer to current and future colleagues. As
a result, we are starting the new financial year in a better position
than we finished the last one. Recruitment and retention of high-
quality staff remains one of the top priorities for the Group.
What our customers say:
Photographs cannot do these tiles justice
because the scattered holographic tiles look
so different in different lights – sometimes
they are silver, at others yellow, orange or
pink. The tiler said they were easy to work
with and that he would definitely be using
them in his own bathroom when he moves.
I am thrilled with the end result.”
Spectre™ Sky
18
TOPPS TILES PLC ANNUAL REPORT AND ACCOUNTS FOR THE 53-WEEK PERIOD ENDED 2 OCTOBER 2021
30525-Topps-Tiles-AR2021-Strategic.indd 18
30525-Topps-Tiles-AR2021-Strategic.indd 18
Job number 10 December 2021 1:08 pm V9
10/12/2021 15:36:03
10/12/2021 15:36:03
CASE STUDY
1
Raj Surani, Thurmaston store
Deputy Manager
1
LONG SERVERS
Topps Tiles Group continues to be recognised nationally as a great
employer, ranked 12th in UK retail by Glassdoor, based on reviews
submitted by colleagues.
t
S
t
r
a
e
g
i
c
R
e
p
o
r
t
“From the way our teams work with each
other to the personable approach of our
Executive management team, I have always
felt a part of something and long may that
continue!”
Store Manager Andy Waterfield, who joined
Topps in 1985, said: “I have traders who
have followed me from store to store because
they know I have the knowledge and I enjoy
helping them; I’ve even had a few of my
assistant managers who have gone on to
be tilers and come to me for their tiles and
advice.
“It has changed so much over the years, both in
tiles and in technology, but we’ve always had
that family feel and I’ve always loved service
customers and the buzz you get when you get
the sale.”
Warehouse operative Keith Rudkin retired
this year after 25 years with Topps. He also
recalled many fond memories of a quarter
of a century of working. “It’s always felt like
Topps is a second family to me. It’s important
to get on with your colleagues, sometimes
you spend more time with them than you do
with your family, and I’ve made plenty of
friends over the years. I’ll miss the place in a
funny way, there’s been a lot of good times,”
he said.
At the end of the year, more than a fifth of
colleagues had clocked up more 11 years’
service (350 colleagues), with ten individuals
with more than 30 years’ service.
One such colleague in the latter group is Raj
Surani, who this year marked 40 years with
the Company.
Having joined the company in 1981 after
spotting an advert in one of our Leicester
stores, he has managed a number of stores
over the decades but still has no intention
of leaving!
“A big part of that is the family feel – we’re a
big company but we still work in small teams
and that’s why you stay close to people you
work with,” he said.
“It says a lot that there are so many long
servers but it’s the way of the company and
its success – if you look after your people they
look after you. We had 38 stores when I first
started, I could never have imagined that we
would end up with nearly ten times that at one
point, but that’s the ambition of the business –
and when you work for the best, why would
you want to go anywhere else?
“It’s grown and developed over the years,
the things we sell have changed many times,
and there’s always something new to learn,
but we’re here to make customers’ projects
come to life. It’s not rocket science, but we
are very, very good at it.”
Junior Buyer Kevan Richardson feels the same
way after 25 years with the business.
He said: “I have seen the estate go from 30
to 300 stores, technology shape the way we
work and, most importantly, I have seen the
way Topps has kept that family feel.
TOPPS TILES PLC ANNUAL REPORT AND ACCOUNTS FOR THE 53-WEEK PERIOD ENDED 2 OCTOBER 2021
19
30525-Topps-Tiles-AR2021-Strategic.indd 19
30525-Topps-Tiles-AR2021-Strategic.indd 19
Job number 10 December 2021 1:08 pm V9
10/12/2021 15:36:04
10/12/2021 15:36:04
OUR STRATEGY
ENVIRONMENTAL
LEADERSHIP
For many years, Topps Tiles has been focused on its environmental
impact and, for the last two years, we have had a cross-functional
Sustainability Council, involving colleagues from all areas of the
organisation, driving change through the business. Significant
progress has already been made on the use of LED lighting in
stores, waste reduction, recycling tiles and pioneering investments
into greater recycled content in tiles and other products through
manufacturing partnerships.
It has, however, become very clear that all businesses need to do
much more and we have challenged ourselves to set a stretching
ambition for our business. Our ambition is to lead our marketplace
in environmental credentials and, specifically, we intend to become
carbon balanced as a business by 2030. This will mean we will
have measured, reduced and, where required, offset our carbon
emissions to net zero by 2030, ten years ahead of the BRC retail
industry ambition of being Net Zero by 2040.
We have a growing partnership with the World Land Trust and are
working with them to understand our current status and build our
plans to minimise our impact on the environment in the future.
The 2030 target is near enough to create personal ownership
within our management team and is a realistic goal that will
motivate our colleagues. The nine-year time horizon means Topps
Tiles will lead our market in many aspects of sustainability.
Our strategy to drive environmental leadership and achieve our
goal has five main elements:
• Ensure we have the right governance in place to deliver the
goal, meet the legislative requirements and regulations. Also,
we must ensure we are measuring our environmental impact
and have a road map to the goal;
• Work with partners to minimise waste and drive recycling and
the use of recycled materials;
• Eliminate as much as possible our current carbon emissions
(our focus will be on Scope 1 and 2, whilst working with
our business partners to influence and reduce the Scope 3
emissions);
• Drive product innovation to increase the use of recycled
materials in tiles and related products, and use strategic
sourcing to minimise our environmental impacts; and
• Use high-quality and auditable carbon offsets to balance our
remaining emissions as part of the pathway to being carbon
balanced by 2030.
Topps Tiles has established a new governance structure to support
the carbon balanced goal. Rob Parker, Chief Executive, will
lead the strategy at a Board level, chair our steering group, and
work with the Audit Committee to ensure appropriate measures
and KPI tracking is in place. Dan Little, Managing Director of our
Commercial business, will continue to create the link between
the steering group and the cross-functional Sustainability Council.
The Sustainability Council will continue to work on reducing our
environmental impact across all areas of the organisation.
GOAL: CARBON BALANCED BY 2030
WASTE AND RECYCLING
GREENHOUSE GAS
EMISSIONS
PRODUCT INNOVATION
AND SOURCING
GOVERNANCE
LEGISLATION
AND REGULATIONS
(MEASURES)
OFFSET STRATEGY
20
TOPPS TILES PLC ANNUAL REPORT AND ACCOUNTS FOR THE 53-WEEK PERIOD ENDED 2 OCTOBER 2021
30525-Topps-Tiles-AR2021-Strategic.indd 20
30525-Topps-Tiles-AR2021-Strategic.indd 20
Job number 10 December 2021 1:08 pm V9
10/12/2021 15:36:05
10/12/2021 15:36:05
CASE STUDY
CRIATERRA
(PARKSIDE)
Criaterra is a zero-waste tile made from 100% natural materials
with a 90% energy saving over ceramic products.
The wall tile challenges the conventions of production and design
and is 100% biodegradable, taking a bold step to product
circularity.
Criaterra is entirely made from natural materials, entirely
recyclable and entirely biodegradable: a true zero-waste wall
tile. Using up to 70% upcycled content from quarry waste
(stone powders), clays and plant fibres, the wall tile uses a low
temperature process that reduces greenhouse gases and takes
90% less energy than conventional ceramics.
Under the principle of Circular Earth Technology, Criaterra starts
with 100% raw materials, even natural pigments, with up to
70% of these materials post-industrial recycled. The tile is then
made with a patented process that replaces conventional high
temperature firing for a 90% reduction in energy use and a 92%
reduction in greenhouse gas emissions. Thermally efficient (600%
that of concrete), Criaterra also provides energy savings in use.
At the end of life, it can be recycled or degraded back into the
earth as nutrients.
t
S
t
r
a
e
g
i
c
R
e
p
o
r
t
PRASIANO
(PARKSIDE)
Prasiano was created with the vision of being a more durable,
sustainable and cost-effective option to real wood, while still
being stylish with a premium feel. With 55% recycled content,
Prasiano is a great option for customers who are looking for
a more sustainable product than real wood look.
The tiles have a solid wood effect that is a mix of two colours:
Oak and Pewter. The rectified finish allows the tiles to be laid
with smaller grout joints, therefore replicating real wood as
closely as possible.
1
2
Criaterra
Prasiano
1
2
TOPPS TILES PLC ANNUAL REPORT AND ACCOUNTS FOR THE 53-WEEK PERIOD ENDED 2 OCTOBER 2021
21
30525-Topps-Tiles-AR2021-Strategic.indd 21
30525-Topps-Tiles-AR2021-Strategic.indd 21
Job number 10 December 2021 1:08 pm V9
10/12/2021 15:36:07
10/12/2021 15:36:07
OUR STRATEGY
RETAIL
Last year, we launched a new strategy in our omni-channel Retail
business – “Great Experience, Great Product and Great Value”
and we made substantial progress within the year, delivering an
excellent overall result. We strive to ensure that the journey for all
of our customers starts and ends with a great customer service
experience – whether in-store, online or both – and we complement
this with a range of market-leading products supported by our
Leading Product initiative. Ultimately, these are combined to
deliver great value to our customers.
Progress and Outlook
The Retail business had an excellent year, delivering sales of
£219.4 million over 53 weeks (£215.3 million on a 52-week
basis; 2020: £185.3 million). The experience we offer our
customers is central to our offer. The majority of our customers shop
infrequently for tiles, which means that when they do, they value our
advice and expertise, whether in a store or online. Overall, despite
our stores being closed to homeowners for a quarter of the year,
our customer satisfaction scores remained at world-class levels. Our
overall satisfaction score for the year was 88.4% (2020: 88.5%)
and we were delighted to win The Tile Association’s 2021 award for
Excellence in National Retail. Our digital offer also provides a great
experience to our customers and, this year, this was evidenced by
a significant number of awards, recognising the quality of our offer,
as follows:
• Winner of ‘The Mastermind’ award at the Adobe Experience
Maker Awards
• B2C Ecommerce Website of the Year at the UK Digital
Growth Awards
• Global DIY, Home, Furniture and Interior Design eCommerce
Website of the Year at the Global eCommerce Awards 2021
• Best Use of Search B2C award at the European Search Awards
• Best Wholesale and Trade eCommerce and Best B2B
eCommerce site at the Ecommerce Awards 2021
• We were also ranked as one of the Top 50 retailers in the UK
in Internet Retailing’s annual “RetailX Top 500” report, ranking
retail websites across all sectors in the UK
Our performance online has continued to be very strong. Our Retail
website had 12.3 million unique visitors in the year, up 31% against
2019, which we believe is approximately three times the level of
our next biggest competitor. On social media, our Facebook and
Instagram impressions were up 184% year-on-year. On Pinterest, we
have an engaged audience of over 900 thousand people, up from
600 thousand at half year. Across Facebook, Instagram, Pinterest
and YouTube channels, social media continues to become an
increasingly important area of focus.
Our customer base splits into two distinct but related groups –
professional fitters (trade) and homeowners. Trade customers
represent 57% of our total sales (2020: 55%) and provide a vital link
to homeowners who prefer to transact through their fitter rather than
with us directly. During the second quarter, this link was especially
valuable as only registered traders were able to enter our stores due
to lockdown restrictions. Our stores remain central to our omni-
channel offer and driving customer convenience., particularly for
our trade customers. Almost every customer visits a store at some
point in their purchase journey, and almost all customers use the
website at some stage too. We offer the ability to collect online
orders from stores, and approximately 30% of online sales are
collected.
We have continued to review our store footprint, identifying areas of
overlap and taking opportunities to consolidate stores where these
exist, to enhance store profitability and returns. During the year, we
have closed 31 stores, opened two new stores and relocated two
stores, finishing the year with 313 Retail stores (2020 year end: 342
stores). We continue to target a core estate size of approximately
300 stores, having reduced the size of the estate from 372 units at
the end of 2017. The reduction in store numbers has helped to drive
incremental profits as we are able to transition sales from a closed
store to other stores in the area. We continue to actively manage
our store estate, and our relatively short unexpired lease term to the
next break opportunity of 3.3 years (2020: 3.4 years) provides
us with good flexibility within our portfolio. Removing stores which
are strategically important (where we have proactively taken longer
terms to secure our tenure) from that calculation reduces the average
unexpired lease term to break to 3.0 years (2020: 3.3 years).
Of the 49 non-trading stores in the estate during 2021, 30 were
disposed by year end, and 15 others have lease breaks in 2022.
This year, we have also made substantial progress within our value
offer. In our 2020 strategy review, we identified an opportunity to
take a greater share of the market for lower priced tiles, specifically
one million square metres of tiles with a selling price of under £20
per square metre. As a result, we launched our ‘Get the Look for
Less’ ranges, which we have extended further over time and from
which we have seen good success in the year. We have also
maintained keen pricing for essentials ranges, including bulk deals
for trade customers, and delivered some compelling promotions,
including ‘up to 50%’ off sales.
We are trialling a new ‘Topps Tiles Clearance’ concept, which
gives us the opportunity to offer even better value to customers,
whilst allowing us to clear discontinued lines and mixed batch
stock, within the overall Topps Tiles brand. At the end of the year,
we had converted eight stores to this format with resulting like-for-
like sales growth in excess of the overall estate.
22
TOPPS TILES PLC ANNUAL REPORT AND ACCOUNTS FOR THE 53-WEEK PERIOD ENDED 2 OCTOBER 2021
30525-Topps-Tiles-AR2021-Strategic.indd 22
30525-Topps-Tiles-AR2021-Strategic.indd 22
Job number 10 December 2021 1:08 pm V9
10/12/2021 15:36:07
10/12/2021 15:36:07
Job number 10 December 2021 1:08 pm V9CASE STUDYAlongside this national award, the Group’s Retail website has picked up seven major gongs.The Retail website www.toppstiles.co.uk won the Global eCommerce Awards 2021 award for Global DIY, Home, Furniture and Interior Design eCommerce Website of the Year, alongside website development partner Tom&Co.The judges said: “The customer feedback programme provided by this next winning entrant impressed the panel. They all thought that this was a fantastic way to keep the visibility of the brand during such a tough year. Topps Tiles’ physical approach of providing a home visualiser tool was also viewed as a fantastic way to help people make the right buying choices”.The website also won the B2C Ecommerce Website of the Year at the UK Digital Growth Awards, which recognise and reward outstanding website design and digital campaigns in the UK.Topps’ Retail website was recognised for its award-winning user experience and exceptional omni-channel shopping journey. ‘B2C Ecommerce website of the year’ was an incredibly tough category with a high volume of submissions, with the site against nine other shortlisted companies such as Halfords, PAUL, Perfume Direct & Cartridge People.Thirdly, the Retail website won the Adobe Experience Maker Award for ‘The Mastermind’ Category.This award is a prestigious and global recognition of the omni-channel shopping experience across all channels, including online and stores, to enable customers to buy anytime, anywhere, with the help of Adobe solutions.The Retail website is also proud to have won ‘Best Use of Search B2C award’ at the European Search Awards, alongside our search partner Impression, who are now one of the best in Europe due to winning this award! This award shows that we are one of the best retailers in Europe for how we implement Google advertising, to drive traffic to our website and ultimately increasing footfall in stores. This was a tough category and Topps Tiles was up against nine other shortlisted nominees with entries from 44 European countries.Topps Tiles is also ranked as one of the top 50 online retailers in the UK (by Internet Retailing). This showcases our excellent customer and website experience.Lastly, we most recently took home two awards at the E-commerce Awards 2021, which were Best B2B eCommerce site and Best Wholesale and Trade E-commerce. TileMyHomeOur new and market-leading visualisation tool, TileMyHome, launched in January 2021. Our innovative tool allows customers to view our beautiful tiles in their own home settings – it’s as simple as taking a picture! Topps Tiles is one of only five retailers who has access to the wall tile function, meaning customers can get a real-life image of what their complete room will look like. TileMyHome uses intuitive image recognition to identify floors and walls, allowing customers to lay any tile of their choice within the image of their own home and includes amazing functionality to change laying patterns and add grout. But we don’t stop there! Our development roadmap means we are constantly updating TileMyHome, bringing the latest developments to our customers first, keeping Topps ahead of the market and giving our customers the most inspirational experience possible. CELEBRATING SUCCESSTopps Tiles Group’s Retail and Commercial brands have been filling the trophy cabinet this year, winning national and international awards.The Retail brand Topps Tiles was awarded the national Excellence in National Retail Winner 2021 by The Tile Association at its annual TTA awards.Chief Executive, Rob Parker, was there to accept the award as Topps Tiles was recognised for “continuing as leading innovators of design, quality, and inspiration in the UK tile industry”.The award showcases Topps’ focus on its Retail business strategy of Great Product, Great Experience, Great Value.23Strategic ReportTOPPS TILES PLC ANNUAL REPORT AND ACCOUNTS FOR THE 53-WEEK PERIOD ENDED 2 OCTOBER 202130525-Topps-Tiles-AR2021-Strategic.indd 2330525-Topps-Tiles-AR2021-Strategic.indd 2310/12/2021 15:36:0910/12/2021 15:36:09 OUR STRATEGY
COMMERCIAL
Parkside and Strata
The commercial tile market is significant and fragmented – at
around 45% of the overall UK tile market, in a normal year it
is worth in excess of £400 million, with no company having a
significant share – and with our entry into this market in 2017 we
approximately doubled the size of our addressable market whilst
maintaining our specialism in tiles and related products. Our entry
started with the acquisition of the Parkside business in September
2017, and in April 2019 we purchased the Strata business, which
was complementary to Parkside. Our strategy of “Disrupt and
Construct” means that we plan to ‘disrupt’ the existing fragmented
competitive landscape and put in place the building blocks
to ‘construct’ a new market leader. Our tile expertise, supplier
relationships, size and scale as a Group is central to this plan –
giving us the resources to recruit a talented sales team, invest in
market-leading pricing and access the broadest range of products,
often on an exclusive basis.
Progress and Outlook
We are continuing to build the capability and proposition of our
Commercial business. There are now 59 colleagues in the business
(2020: 52), including a sales force of 29 (2020: 26). We are
establishing a strong reputation for quality and reliability with high
levels of loyalty across different customer groups such as architects,
designers and contractors.
Performance over the course of the year has varied, based on
conditions in the various market sectors we service. Sales in the first
half of £4.1 million were down 10% year-on-year, with a significant
impact from the Covid-related disruption in key sectors such as
hospitality and leisure during that time period. Sales in the second
half were up 55% year-on-year, to finish the year at £8.6 million,
15% higher than 2020. This is a significant outperformance of the
market, which was down 7.2% (source: ONS). Trading losses in the
year were £1.6 million (2020: £1.9 million trading loss); however,
our Commercial business is scaled to construct a market leader and
we continue to invest in people and resources to enable to grow
significantly as key sectors fully reopen.
Environmental leadership is particularly important in the commercial
market and we have made significant progress this year. Our
Commercial business is now ISO14001 accredited, externally
certifying that we have an effective environmental management
system, we are leading the Group environmental engagement
with the World Land Trust, we have launched new packaging for
our samples made from 100% recycled and 100% recyclable
material, we have worked with suppliers on launch of innovative
new products such as Criaterra, a zero-waste tile made with
100% natural materials with a 90% energy saving over ceramic
products, and we have relaunched our Clerkenwell showroom as
a Sustainability and Design Studio, where we can showcase all of
the innovative work we are doing in this area to our architect and
designer client base.
At the end of the year, there are some positive signs for the
recovery of key commercial market sectors such as travel and
leisure, and our order bay is at its highest ever level. As a result, we
are optimistic that next year our sales will materially move forward
and trading losses will continue to narrow as we construct an
industry-leading business.
The TTA honoured Parkside with the
Wall Tile of the Year Award for Spectre
Recognised for the way it ‘explores the interaction of light
on different surfaces’, Spectre, an exclusive ceramic wall
tile collection from Parkside, fought off fierce competition
to be named the Wall Tile of the year 2021. Dan Little,
Commercial Managing Director accepted the award.
24
TOPPS TILES PLC ANNUAL REPORT AND ACCOUNTS FOR THE 53-WEEK PERIOD ENDED 2 OCTOBER 2021
30525-Topps-Tiles-AR2021-Strategic.indd 24
30525-Topps-Tiles-AR2021-Strategic.indd 24
Job number 10 December 2021 1:08 pm V9
10/12/2021 15:36:12
10/12/2021 15:36:12
t
S
t
r
a
e
g
i
c
R
e
p
o
r
t
1
London Marriott Hotel, Kensington (Parkside)
TOPPS TILES PLC ANNUAL REPORT AND ACCOUNTS FOR THE 53-WEEK PERIOD ENDED 2 OCTOBER 2021
25
30525-Topps-Tiles-AR2021-Strategic.indd 25
30525-Topps-Tiles-AR2021-Strategic.indd 25
Job number 10 December 2021 1:08 pm V9
10/12/2021 15:36:16
10/12/2021 15:36:16
KEY PERFORMANCE INDICATORS
The Board monitors a number of financial and non-financial metrics and KPIs both for the Group and by individual store. This information
is reviewed and updated as the Directors feel appropriate. Specific measures include:
FINANCIAL KPIS
Group Revenue Growth
Year-on-Year
18.3%
2020: (12.0)%
YoY: +30.3 ppts
How We Calculate This
Total Group revenues.
Retail Like-for-Like Sales Growth
Year-on-Year*
19.6%
2020: (12.5)%
YoY: +32.1 ppts
Group Gross Margin
57.3%
2020: 58.5%
YoY: (1.2) ppts
How We Calculate This
Sales from retail online and retail stores that
have been trading for more than 52 weeks.
How We Calculate This
Group gross profit divided by Group
revenue.
Adjusted Profit
Before Tax*
£15.3m
2020: £3.6m
YoY: 325.0%
Adjusted Earnings
Per Share*
6.13p
2020: 1.57p
YoY: 290.4%
Adjusted Net Cash*
£27.8m
2020: £26.0m
YoY: +£1.8m
How We Calculate This
Group profit before tax, excluding
items that are either one-off in nature or
fluctuate significantly from year to year.
How We Calculate This
Group earnings per share, adjusted for
items that are either one-off in nature or
fluctuate significantly from year to year,
including the impact of corporation tax.
How We Calculate This
Cash and cash equivalents less bank
loans, before unamortised issue costs. It
excludes lease liabilities under IFRS 16.
1
Inventory Days
123
2020: 134
YoY: (11)
How We Calculate This
Inventory value divided by cost of sales
multiplied by 365 days.
1
London Marriott Hotel,
Kensington (Parkside)
26
TOPPS TILES PLC ANNUAL REPORT AND ACCOUNTS FOR THE 53-WEEK PERIOD ENDED 2 OCTOBER 2021
30525-Topps-Tiles-AR2021-Strategic.indd 26
30525-Topps-Tiles-AR2021-Strategic.indd 26
Job number 10 December 2021 1:08 pm V9
10/12/2021 15:36:19
10/12/2021 15:36:19
NON-FINANCIAL KPIS
Retail Customer Overall
Satisfaction Score
88.4%
2020: 88.5%
YoY: (0.1) ppts
Colleague Turnover
31.2%
2020: 28.8%
YoY: 2.4 ppts
How We Calculate This
Calculated from responses we receive
through our TileTalk customer feedback
programme in Retail1.
How We Calculate This
Total number of leavers in a period
divided by average number of employees
in a period, multiplied by 100.
Carbon Emissions Per Store
(tonnes per annum)
27.2
2020: 24.7
YoY: 10.1%
How We Calculate This
Actual electricity and gas consumed2.
Number of Retail Stores at year end*
313
2020: 342
YoY: (29)
How We Calculate This
Number of retail stores open as at
2 October 2021
1. Customer overall satisfaction scores are calculated
from the responses we receive through our TileTalk
customer feedback programme. Overall satisfaction
(OSAT) is the percentage of customers that score
us 5 in the scale of 1–5, where 1 is highly
dissatisfied, and 5 is highly satisfied.
2. Energy carbon emissions have been compiled in
conjunction with our electricity and gas suppliers.
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 comparative period in 2020
includes a period of complete store closure due to
Covid-19, resulting in lower emissions per store.
Carbon emissions per store in 2019 were 32.0
tonnes per annum.
* As defined in the Financial Review.
t
S
t
r
a
e
g
i
c
R
e
p
o
r
t
2
Everscape™ Enis™ Black Slate
Modular and Enis™ Black Slate
2
TOPPS TILES PLC ANNUAL REPORT AND ACCOUNTS FOR THE 53-WEEK PERIOD ENDED 2 OCTOBER 2021
27
30525-Topps-Tiles-AR2021-Strategic.indd 27
30525-Topps-Tiles-AR2021-Strategic.indd 27
Job number 10 December 2021 1:08 pm V9
10/12/2021 15:36:21
10/12/2021 15:36:21
Job number 10 December 2021 1:08 pm V9FINANCIAL REVIEWA solid platform from which to deliver sustainable long-term growth.”Stephen HopsonChief Financial OfficerAdjusted MeasuresThe Group’s management uses adjusted performance measures to plan for, control and assess the performance of the Group.Adjusted profit before tax differs from the statutory profit before tax as it excludes the effect of one off or fluctuating items, allowing stakeholders to understand results across years in a more consistent manner. In the prior year, we fully excluded the impact of IFRS 16 from adjusted profit. In 2021, we have included the business as usual impact of IFRS 16 in adjusted profit but continue to adjust for any impairment charges or impairment reversals of right-of-use assets, derecognition of lease liabilities where we have exited a store, significant transactions such as sale and lease backs, and one-off gains and losses through sub-lets.Analysis of movements from adjusted profit to statutory profit are detailed below, noting that we have updated the presentation of adjusting items to include the impact of IFRS16 in both periods, restating the 2020 comparative to be on a consistent basis: Group Revenue (£m)Year-on-Year: +18.3%Gross Margin (%)Year-on-Year: (1.2) ppts228.0192.8219.219202157.358.561.61920212021£m2020 £mAdjusted profit before tax15.33.6Property– Impairment of property, plant and equipment(1.0)(1.8)– Vacant property and closure costs(2.1)(0.9)– Store closure impairments and lease gains and losses(0.2)(5.0)– IFRS 16 BAU adjustments*nil0.4(3.3)(7.3)Commercial– Commercial impairment of goodwill, intangibles and property, plant and equipment**nil(5.6)nil(5.6)Other– Costs related to business restructurenil(0.5)– Business rates relief from April to September 2021***2.3nil2.3(0.5)Statutory profit / (loss) before tax14.3(9.8)* In the prior year, we treated the total impact of IFRS 16 as an adjusting item; in the current year, we have taken the impact of IFRS 16 business as usual into our adjusted profit.** In the prior year, we impaired commercial goodwill, intangibles and property, plant and equipment, recognising the risk of a slower growth profile following the impact of Covid-19 on sectors that the Parkside and Strata businesses serve. *** In the second half year, we have included a normal level of business rates expense within our adjusted profit to improve comparison with the prior year. Business rates relief of £6.7 million was received over the full year, including £2.3 million in the second half, which we estimate is significantly lower than the negative profit impact of trading restrictions during the year as a whole.28TOPPS TILES PLC ANNUAL REPORT AND ACCOUNTS FOR THE 53-WEEK PERIOD ENDED 2 OCTOBER 202130525-Topps-Tiles-AR2021-Strategic.indd 2830525-Topps-Tiles-AR2021-Strategic.indd 2810/12/2021 15:36:2610/12/2021 15:36:26 t
S
t
r
a
e
g
i
c
R
e
p
o
r
t
1
Nando’s Coventry (Parkside)
TOPPS TILES PLC ANNUAL REPORT AND ACCOUNTS FOR THE 53-WEEK PERIOD ENDED 2 OCTOBER 2021
29
30525-Topps-Tiles-AR2021-Strategic.indd 29
30525-Topps-Tiles-AR2021-Strategic.indd 29
Job number 10 December 2021 1:08 pm V9
10/12/2021 15:36:30
10/12/2021 15:36:30
FINANCIAL REVIEW
Statement of Financial Performance
Revenue
Total revenue for the period ended 2 October 2021 increased
by 18.3% to £228.0 million (2020: £192.8 million, 2021 on
a comparable 52 week basis: £223.7 million). Revenue in the
year was impacted by trading restrictions related to the Covid-19
pandemic in the second quarter, when homeowners were unable
to go inside our stores and registered traders were only allowed
to enter to visit the trade counter. The prior year was materially
impacted by temporary store closures in the third quarter, also
relating to the pandemic. In addition, there was a net closure of
29 Retail stores in the year.
Retail like-for-like sales were 19.6% higher than the prior year,
which consisted of a 2.0% increase in the first half of the financial
period and a 39.8% increase in the second half. The growth in the
second half was comparing against a period that included a full
store lockdown in 2020 during the first wave of the pandemic.
On a two-year basis, Retail like-for-like sales were up 6.3% against
2019, including a decline of 4.5% in the first half (which included
the lockdown in the early part of 2021) and then very strong
growth of 17.4% in the second half (which compares two periods
without trading restrictions).
Sales to our Commercial customers were up 15% year-on-year to
£8.6 million, with growth of 55% in the second half year as key
sectors began to open up for business.
Gross Margin
Total gross margin was 57.3%, a decrease from 58.5% in the
prior year.
Gross margin in the Retail business decreased from 59.2% in the prior
year to 58.1% in the current year. This was driven by a continued
focus on pricing competitiveness, changes in product mix, customer
mix and NPD, and increased shipping costs, which became
particularly significant in the second half year. Partially offsetting these
downward pressures, there were lower expenses from stock provisions
and delivery than in the prior year. The impact of foreign exchange
movements on cost of goods sold this year was immaterial.
Operating Expenses
Operating expenses were £112.4 million compared to
£118.8 million in FY20; however, the year-on-year change is
distorted as a result of significant one-off expenses in the prior year
relating to the adoption of IFRS16 and the impairment of Commercial
assets. On an adjusted basis, operating expenses increased from
£108.4 million in FY20 to £111.4 million in FY21.
The movement in adjusted operating costs is explained by the
following key items:
• Underlying cost increases of £1.5 million, consisting of
increases in the National Living Wage (£0.6 million), supply
chain increases due to higher volumes and subcontractor
costs (£2.3 million), employee profit share (£4.0 million) and
other costs (£0.2 million) offset by lower costs due to fewer
stores (£3.7 million) and the annualisation of cost reductions
implemented in the previous year (£1.9 million);
• The reversal of the majority of the holiday pay accrual from the
end of the prior year had the impact of decreasing adjusted
operating costs by £3.6 million year-on-year;
• The impact of including IFRS 16 in adjusted operating costs is a
decrease in costs of £3.3 million year-on-year;
• Changes in Government support have increased adjusted
operating costs by £6.3 million year-on-year; and
• The 53rd week in this accounting period increased costs by
£2.1 million.
In FY20, our adjusted profit included £10.7 million of government
support (through the Coronavirus Job Retention Scheme (“CJRS”)
£5.3 million, business rates relief £4.7 million and local authority
Covid-19 grants of £0.7 million). In FY21, adjusted profit included
£4.4 million of government support from business rates relief. The
Company has repaid all CJRS support relating to FY21. Business
rates relief of £6.7 million was received over the full year, including
£2.3 million in the second half, which we estimate is significantly
lower than the negative profit impact of trading restrictions during
the year as a whole.
Adjusted Profit
Before Tax (£m)
Year-on-Year: +325.0%
Adjusted Earnings
Per Share (p)
Year-on-Year: +290.4%
Total Dividend
Declared (p)
Year-on-Year: n/a
Adjusted
Net Cash/(Debt) (£m)
Year-on-Year: +£1.8m
Free
Cash Flow (£m)
Year-on-Year: (95.7)%
0
.
6
1
3
.
5
1
6
.
3
0
9 2
1
1
2
1
6
.
6
3
1
.
6
7
5
.
1
9
1
0
2
1
2
4
.
3
1
.
3
l
i
N
0
2
1
2
9
1
8
.
7
2
0
.
6
2
0
2
1
2
9
1
)
3
.
1
1
(
8
.
1
4
5
.
1
1
9
.
7
1
2
.
4
7
1
8
1
9
1
0
2
8
.
1
1
2
30
TOPPS TILES PLC ANNUAL REPORT AND ACCOUNTS FOR THE 53-WEEK PERIOD ENDED 2 OCTOBER 2021
30525-Topps-Tiles-AR2021-Strategic.indd 30
30525-Topps-Tiles-AR2021-Strategic.indd 30
Job number 10 December 2021 1:08 pm V9
10/12/2021 15:36:31
10/12/2021 15:36:31
1
2
Financing
Interest on bank loans and overdrafts, net of bank interest
receivable, was £0.4 million (2020: £0.8 million). In 2020, the
business moved to a net cash position, in part due to the sale and
leaseback of our head office and central warehouse buildings for
£18.1 million, and interest costs have fallen as we have repaid
all outstanding loans and facilities in the year.
Total net Financing costs of £4.1 million (2020: £3.8 million) include
£3.7 million of costs relating to IFRS16.
Profit Before Tax
Profit before tax was £14.3 million (2020: £9.8 million loss).
Excluding the adjusting items detailed above, profit before tax was
£15.3 million (2020: £3.6 million). The Group adjusted profit
before tax margin was 6.7% (2020: 1.9%).
Tax
The effective rate of corporation tax for the period was 23.6%
(2020: 18.4%).
t
S
t
r
a
e
g
i
c
R
e
p
o
r
t
1
2
Getting advice in-store
New Look, Sheffield (Parkside)
Earnings Per Share
Basic earnings per share were 5.59 pence (2020: loss of 4.11
pence). Diluted earnings per share were 5.52 pence (2020: loss
of 4.11 pence). Excluding adjusting items, adjusted earnings per
share were 6.13 pence (2020: 1.57 pence).
Dividend and Dividend Policy
Following consideration of the financial position and performance
of the Group, the Board has decided to propose the resumption of
dividend payments and to readopt the previous policy of paying
approximately half of adjusted EPS as dividends. Moving forward,
the interim dividend would be set at approximately one-third of
the prior full year dividend. The Group will evaluate its capital
allocation policy in the coming year.
This year, the Board is recommending to Shareholders a final
dividend of 3.1 pence per share, which will cost £6.1 million. The
shares will trade ex-dividend on 23 December 2021 and, subject
to approval at the Annual General Meeting, the dividend will be
paid on 31 January 2022.
TOPPS TILES PLC ANNUAL REPORT AND ACCOUNTS FOR THE 53-WEEK PERIOD ENDED 2 OCTOBER 2021
31
30525-Topps-Tiles-AR2021-Strategic.indd 31
30525-Topps-Tiles-AR2021-Strategic.indd 31
Job number 10 December 2021 1:08 pm V9
10/12/2021 15:36:36
10/12/2021 15:36:36
FINANCIAL REVIEW
Statement of Financial Position
Capital Expenditure
Capital expenditure in the period amounted to £4.7 million
(2020: £4.4 million excluding freehold acquisition in the prior
year); an increase of 7% year-on-year.
Key investments are as follows:
• New retail stores £1.0 million – four new openings (including
two relocations) (2020: £1.3 million)
• Store improvements, merchandising and maintenance
£0.8 million (2020: £0.9 million)
• LED store improvement programme £2.3 million
(2020: £0.6 million)
• Central office refurbishment nil (2020: £1.3 million)
• Group IT developments (including website) £0.3 million
(2020: £0.3 million)
• Other expenditure £0.3 million (2020: nil)
In the prior year, we also purchased two freehold properties for
£2.3 million.
The Board expects capital expenditure in the year ahead to be
between £6 million and £7 million, which will cover our core
investment plans. Any acquisitions that the Group may consider as
part of its growth plans would be additional to this guidance.
Acquisitions and Disposals
During the year, we disposed of three freehold properties for £2.1
million, two of which were held for sale at the end of 2020. In
the prior year, we entered into a sale and leaseback arrangement
for our head office and central warehouse buildings for a price of
£18.1 million before costs (£17.9 million net of costs).
At the period end, the Group held two freehold or long leasehold
sites, with a total carrying value of £1.0 million (2020: five
freehold or long leasehold sites valued at £3.1 million). The
carrying value is based on the historic purchase cost and capital
expenditure less accumulated depreciation.
Inventory
Inventory at the period end was £32.8 million (2020:
£29.3 million) representing 123 days turnover (2020: 134 days
turnover). The higher levels of stock at year end reflect a decision to
hold additional stock in light of supply chain challenges. Stock days
in 2020 were higher than normal due to lower sales following
lockdown restrictions.
Cash Flow
On a statutory basis, net cash from operating activities was
£26.7 million, compared to £51.0 million in the prior year period.
The table below analyses changes in adjusted net cash flow and
has been prepared on a post-IFRS 16 basis, with 2020 values
restated to aid comparability:
Cash generated by operations
before WC movements
Changes in working capital
Interest including interest element of
Lease Liabilities
Tax
Net cash from operating activities
Capital expenditure excluding
investments
Freehold and leasehold investments
Disposals
Payment of capital element of lease
liabilities
Other
Free cash flow
Dividends
Change in adjusted net cash
Adjusted net cash at end of period
2021
£m
47.0
(14.6)
(4.2)
(1.5)
26.7
(4.7)
–
2.1
(23.0)
0.7
1.8
0.0
1.8
27.8
2020
£m
35.1
20.8
(3.9)
(1.0)
51.0
(4.4)
(2.3)
18.6
(21.5)
0.4
41.8
(4.5)
37.3
26.0
Adjusted net cash increased by £1.8 million (2020:
£37.3 million). This increase included a £10.7 million negative
impact within working capital caused by two specific factors,
which are not representative of the underlying cash performance
of the period:
•
the change of the financial year end due to the 53rd trading
week, resulted in a £7.0 million cash outflow in the final days
of the period as a result of the timing of supplier payment runs
and our payroll; and
• we repaid VAT of £3.7 million deferred from 2020 as part
of the Government’s Covid-19 support package.
Working capital also includes an outflow due to stock movements
of £3.4 million as we chose to hold higher levels of key stock lines
as part of our response to the global supply chain challenges.
Cash and cash equivalents at the period end were £27.8 million
(2020: £31.0 million) with nil borrowings (2020: £5.0 million),
resulting in adjusted net cash of £27.8 million (2020:
£26.0 million).
Return on Capital Employed
As a result of strong cash generation as well as the store
consolidation programme, over the two year period from 2019
to 2021, the Group’s lease adjusted return on capital employed
(LAROCE) has improved from 13.1% to 17.5%, whilst lease
adjusted capital employed has reduced by £43 million.
32
TOPPS TILES PLC ANNUAL REPORT AND ACCOUNTS FOR THE 53-WEEK PERIOD ENDED 2 OCTOBER 2021
30525-Topps-Tiles-AR2021-Strategic.indd 32
30525-Topps-Tiles-AR2021-Strategic.indd 32
Job number 10 December 2021 1:08 pm V9
10/12/2021 15:36:38
10/12/2021 15:36:38
1
1
Cliq™ Hot Pink
Banking Facilities
The Group has a £39.0 million revolving credit facility in place,
which is committed to July 2023 (2020: £39.0 million). At the
year end, none of this was drawn (2020: nil). During 2021, we
repaid £5.0 million and cancelled a further £5.0 million of credit
facilities through the Coronavirus Large Business Interruption Loan
Scheme and none of these facilities remain active at the end of the
period (2020: £5.0 million drawn). As a result, the Group had
£39.0 million of undrawn committed banking facilities at the end
of the financial year.
Current Trading and Outlook
In the first eight weeks of the new financial year, trading has
remained robust. However, macroeconomic indicators such as
consumer confidence have softened and global supply chain
challenges and cost inflation will continue to provide trading
headwinds. Against this backdrop, Retail like-for-like sales have
increased by 18.4% on a two-year basis and decreased by 0.7%
on a one-year basis. We remain confident that our market-leading
Retail offer and Commercial growth strategy, along with our flexible
supply chain and balance sheet strength, give us a solid platform
from which to deliver sustainable long-term growth.
Rob Parker
Chief Executive
Stephen Hopson
Chief Financial Officer
10 December 2021
t
S
t
r
a
e
g
i
c
R
e
p
o
r
t
What our customers say:
These are the best Blue tiles I’ve found at
the fraction of the cost of similar ‘artisan’
tiles elsewhere. The glaze is a proper Blue
glaze – NOT a printed blue. Like real
Lapis Lazuli. The uneven artisan quality
of the tile and glazing gives a wonderful
classy sheen. The patterns are diverse
enough to look different. Personally, I
can’t recommend these tiles enough!”
Lampas™ Marine Pattern Tile
TOPPS TILES PLC ANNUAL REPORT AND ACCOUNTS FOR THE 53-WEEK PERIOD ENDED 2 OCTOBER 2021
33
30525-Topps-Tiles-AR2021-Strategic.indd 33
30525-Topps-Tiles-AR2021-Strategic.indd 33
Job number 10 December 2021 1:08 pm V9
10/12/2021 15:36:42
10/12/2021 15:36:42
RISKS AND UNCERTAINTIES
Understanding and managing the risks faced by the business has never been more important than during the last two years, with the
impact of Covid-19 on our people, our customers, our suppliers and our ability to trade, together with increasing risks surrounding
our supply chain. Although the most severe disruption from the pandemic appears to be abating, substantial uncertainty remains
around the outlook, and this uncertainty is likely to continue for some time to come.
The Group’s risk review framework operates as follows:
• An annual strategic risk workshop, which is attended by the Audit Committee Chair, 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; and
• A quarterly update in the Board pack, which includes a summary of the key risks identified, combined with mitigants and
agreed actions.
Risks
Impact
Mitigation
SUPPLY CHAIN – SHORT-TERM PRESSURE AND LONG-TERM OUTLOOK
Current global supply chain
pressures are restricting
the availability of stock for
sale, as well as adding
additional cost pressure into
cost of goods and shipping.
In the longer term, this may
result in the consolidation
of the supplier base, with
global sourcing impacted
by environmental factors.
Sales may be impacted by items being
out of stock due to an inability to secure
capacity on ships, drivers or warehouse
space, or stock being held in factories or
at port. Where resources can be secured,
we may see material increases in supply
chain costs, decreasing our profit margins.
Our buying scale has to date helped ensure
we secure factory capacity and appropriate
supply chain resources. Our internal
warehousing and logistics operations
have proved agile enough to deal with
additional stock. We will review the
appropriateness of passing on additional
cost pressures to consumers.
MACROECONOMIC AND CONSUMER CONFIDENCE
The general economic
climate and specifically
consumer confidence are
important to Topps and
events that may affect these
factors present a financial
risk to the business. Topps
faces a specific short-term
risk that the tile market
normalises following the
recent home improvement
boom, and levels of
inflation are increasing
across many sectors in the
economy.
Over the long term, consumers need to feel
confident to invest money into their homes
and there are some material uncertainties
in the outlook. Despite the well-documented
increase in consumer spending on the
home since the start of the pandemic, any
normalisation of the tile market or drop in
consumer confidence is likely to result in
a market contraction year-on-year.
Inflationary cost increases in operating
expenditure may put pressure on profit
margins.
The business is in a strong position to
face any market contraction. A material
improvement in liquidity over the last 18
months has resulted in a strong net cash
position with no debt. We have an unused
revolving credit facility of £39 million,
which is committed to Summer 2023.
This strong financial foundation, combined
with tight control of costs, allows the Group
to greater withstand short-term trading
pressures. Macroeconomic indicators are
reviewed as part of monthly Board pack.
Early signs of adverse trends would be
responded to with revised business plans
and reduced levels of investment.
Status
N
34
TOPPS TILES PLC ANNUAL REPORT AND ACCOUNTS FOR THE 53-WEEK PERIOD ENDED 2 OCTOBER 2021
30525-Topps-Tiles-AR2021-Strategic.indd 34
30525-Topps-Tiles-AR2021-Strategic.indd 34
Job number 10 December 2021 1:08 pm V9
10/12/2021 15:36:42
10/12/2021 15:36:42
Risks
Impact
Mitigation
Status
CORPORATE REPUTATION – SUSTAINABILITY
In line with all businesses,
we have a responsibility
to focus on sustainability
and minimise our impact
on the environment and
our communities.
If we do not do this
successfully, there is a risk
of further legislation,
regulation, taxation and
significant reputational
damage to the business.
DELIVERY OPTIMISATION
We may fail to offer
compelling and
commercially viable
delivery propositions
that meet the needs
of all our customer groups.
We wish to make consumers feel confident
that the Group is a responsible corporate
citizen and that we are doing all we can
to minimise our environmental footprint.
Some of the most relevant aspects for our
business are reducing greenhouse gas
emissions, minimising waste and increasing
recycling, driving product innovation to
increase the amount of recycled content
used in tiles and related products, ensuring
we have the right governance in place to
deliver our goal, and using high-quality
carbon offsets where necessary.
The Group has launched a new area within
our strategy called ‘Environment Leadership’
with a new goal of being carbon balanced
by 2030. Our CEO Rob Parker takes
responsibility for this element of the strategy,
and our partners The World Land Trust are
supporting us to understand our current status
and build plans to minimise our impact on
the environment in the future. We believe
we are well placed to lead the thinking in
this area across our industry.
A failure to offer a reliable delivery service
to both retail, trade and commercial
customers could have a negative effect
on our reputation and future sales.
Supply chain development remains a key
area of focus for the Group strategy, with
the aim of achieving best-in-class delivery in
our sector. We hold ongoing reviews with
our third-party direct delivery partners to
ensure we offer the optimum service to
all our customer groups.
ATTRACTING AND RETAINING TALENT/LOSS OF KEY PERSONNEL
The exit of individuals key to
the delivery of our strategy
or the inability to find new
talent to support the delivery
of our growth agenda.
The failure to recruit or retain key individuals
could impact on the ability of the business
to deliver its strategic objectives.
Attracting talent is increasingly difficult due
to the low levels of unemployment and
higher wage inflation.
We focus hard on recruiting the right
people, ensuring we have excellent on-
boarding and training programmes to help
us both attract and retain the right talent to
the business. We provide a range of flexible
benefits, both financial and non-financial, to
provide a balanced employer brand, which
we believe is attractive to colleagues.
t
S
t
r
a
e
g
i
c
R
e
p
o
r
t
KEY:
Risk has increased Risk has decreased No change N New risk
TOPPS TILES PLC ANNUAL REPORT AND ACCOUNTS FOR THE 53-WEEK PERIOD ENDED 2 OCTOBER 2021
35
30525-Topps-Tiles-AR2021-Strategic.indd 35
30525-Topps-Tiles-AR2021-Strategic.indd 35
Job number 10 December 2021 1:08 pm V9
10/12/2021 15:36:43
10/12/2021 15:36:43
RISKS AND UNCERTAINTIES
Risks
Impact
Mitigation
Status
COVID-19 – FURTHER TRADING RESTRICTIONS
There may be further trading
restrictions due to Covid-19,
which might impact the
business and disrupt trading
or impact our people or our
customers.
The second national lockdown included
the closure of tile showrooms with a
material disruption to trading. A further
potential key risk to the business would
come from any closure of our central
warehouse facilities, in particular if store
operations were restricted.
We have remained agile throughout our
supply chain over the last two years and
traded reasonably successfully through
the various lockdowns. We have well
established Covid-19 protocols, which
could be activated if the situation changes
again for the worse.
CYBER SECURITY
The business may suffer
a breach of its IT systems
security leading to either
a loss of capability or a
loss of customer and/or
commercial data.
A temporary loss of systems would be
likely to result in an operational impact,
which would adversely affect sales and
ultimately profits.
The loss of commercial or customer data
could result in reputational damage to
the Company and/or fines.
In the event of a loss of the warehouse
due to a Covid-19 outbreak, we have
contingency warehousing facilities available
and could divert inbound stock from the port.
More generally, the strength of the Group’s
balance sheet provides resilience to help us
withstand any periods of disruption.
The Company uses modern systems and
the latest network and security protocols
to protect against attack or breaches of
security. A disaster recovery server provision
is in place and the majority of our servers
now operate on virtualised technology.
Access rights only allow colleagues access
to data that they need. Two strategic
cybersecurity partners are in place, both
providing updates of current cyberthreats.
Virus outbreak response plans are in place.
APPROPRIATE CUSTOMER OFFER
The Group may fail to
maximise profitability by
ensuring it has a customer
offer that has a broad
appeal to wide range of
customers.
The impact of not having the optimum
customer offer would be the business losing
competitiveness with performance declining
over time due to issues with product, price
or people.
The business routinely reviews its
competitive position and performance
against peers to the extent possible. We
conduct an annual strategy review, which
allows for a more thorough analysis of
longer-term indicators.
VALUE EROSION THROUGH M&A
M&A activity that does not
deliver to expectation.
The risk that M&A does not deliver the
benefits we expect and/or creates
significant distraction for the business
leading to a decline in the core business.
Establish a clear strategic rationale for any
further M&A and combine this with very
clear plans for post-acquisition including
central controls established as a priority
(for example financial controls).
36
TOPPS TILES PLC ANNUAL REPORT AND ACCOUNTS FOR THE 53-WEEK PERIOD ENDED 2 OCTOBER 2021
30525-Topps-Tiles-AR2021-Strategic.indd 36
30525-Topps-Tiles-AR2021-Strategic.indd 36
Job number 10 December 2021 1:08 pm V9
10/12/2021 15:36:43
10/12/2021 15:36:43
t
S
t
r
a
e
g
i
c
R
e
p
o
r
t
Risks
Impact
MAJOR REPUTATIONAL DAMAGE
Mitigation
Status
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.
The Topps 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.
DELIVERY OF COMMERCIAL STRATEGY
A failure to deliver the commercial strategy
will reduce future growth opportunities.
The Group has sought to
increase its addressable
market by expansion into
the commercial tiles market
as an important focus for
future growth.
STORE PORTFOLIO
We may not have the
optimum property strategy
for the UK market, including
the risk of losing key stores,
which contribute a material
amount of Group earnings.
We may overexpand the store estate
leading to reduced levels of profitability.
Alternatively, the 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.
Governance and internal controls are the
key mitigants against reputational damage.
Good levels of business knowledge and
well qualified and professional support
teams along with transparency at Executive
level are also important.
We continue to review macro environment
for changes – both explicit (regulatory) and
implicit (custom and practice or consumer
expectations).
Clear protocols have been established
surrounding crisis management including
alerts for senior managers to minimise
damage from a major incident.
Regulatory compliance continues to
strengthen under a regime of continuous
review through the Company Secretary.
Covid-19 has adversely impacted growth
in the commercial business with the market
in decline and new project investment
significantly slowed.
Despite this backdrop, the Group remains
confident that its ‘disrupt and construct’
strategy remains appropriate and that
this can ultimately build a market-leading
business.
We perform detailed reviews of our estate
looking at drive times, profit contribution
and competitor store estates. FY22 marks
the final year of a store closure programme,
driven from the output of these reviews.
These reviews give us confidence that we
have the right estate going forwards to
maximise sales and ensure we have the
right balance of security of tenure in our
biggest contributing stores and flexibility
in the smaller turnover 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.
KEY:
Risk has increased Risk has decreased No change N New risk
TOPPS TILES PLC ANNUAL REPORT AND ACCOUNTS FOR THE 53-WEEK PERIOD ENDED 2 OCTOBER 2021
37
30525-Topps-Tiles-AR2021-Strategic.indd 37
30525-Topps-Tiles-AR2021-Strategic.indd 37
Job number 10 December 2021 1:08 pm V9
10/12/2021 15:36:43
10/12/2021 15:36:43
SUSTAINABILITY
ENVIRONMENT
The Topps Tiles Group has been working hard to reduce our environmental impact for some years,
however this year we have taken two significant steps towards our ambition to lead the marketplace
in this area: first, by explicitly incorporating Environmental Leadership within our overall Group
strategy; and second, by launching our goal of becoming carbon balanced by 2030.
SUSTAINABILITY: ENVIRONMENT
Action Area
What
Link to SDGs*
Waste and
Recycling
• Zero landfill
• Reducing waste in supply chain
• Less paper and plastic
• No energy waste
GHG Emissions
• Renewables electricity and green offset gas source
•
Influencing upstream and downstream scope 3
• Greener company vehicles and transport
Product Innovation
and Sourcing
• Greater use of recycled materials
• Sourcing from energy efficient suppliers
• Nearer sourcing reducing freight impacts
• Longer lasting, harder wearing surfaces
This means measuring, reducing and, where required, offsetting
carbon emissions to net zero by 2030, ten years ahead of the BRC
retail industry ambition of being net zero by 2040.
We believe the key to achieving this within the nine-year timeframe
is creating a sense of personal ownership within our colleague and
management teams, along with leading our market in many aspects
of sustainability.
To support this, we have partnered with the World Land Trust,
which is already helping us drive forward our environmental
aspirations with a powerful but simple approach of Measure,
Reduce and Offset.
Our strategy to drive Environmental Leadership and achieve our
goal has five key elements:
1. Governance
We recognise the importance of putting the right governance in
place with the appropriate senior representation to allow it to be
effective. Our Chief Executive, Rob Parker, will lead the strategy
at a Board level and chair our Environmental Leadership steering
group. Dan Little, Managing Director Commercial, will continue to
create the link between the steering group and the Sustainability
Council, a cross-functional team that was established in 2019
to champion initiatives and issues in sustainability. As part of this
element, Rob will lead efforts to clearly measure our environmental
impact and define a road map towards our goal.
2. Minimise Waste and Maximise Recycling
Topps has for many years recognised the importance of reducing
the amount of waste products that end up in landfill and we focus
hard on making continual improvements. See page 41 for an
update on progress in this area.
3. Reduce Carbon Emissions
After measuring our carbon emissions in a detailed way, the next
part of the strategy is to eliminate them as far as possible. See
pages 39 and 43 for more details on progress in the last year.
4. Drive Product Innovation and The Use of Recycled Materials
The Group can play an important role offering our customers an
increasing choice of products with high recycled content. Working
with expert manufacturers and leveraging our buying scale we
are innovating through our new product launches, and have been
encouraged by progress in this area. Please refer to the case
studies on page 21 and page 41 which outline some of the recent
products we have brought to the market which offer customers
products which are manufactured using innovative sustainable
processes.
38
TOPPS TILES PLC ANNUAL REPORT AND ACCOUNTS FOR THE 53-WEEK PERIOD ENDED 2 OCTOBER 2021
30525-Topps-Tiles-AR2021-Strategic.indd 38
30525-Topps-Tiles-AR2021-Strategic.indd 38
Job number 10 December 2021 1:08 pm V9
10/12/2021 15:36:45
10/12/2021 15:36:45
What our customers say:
Beautiful to look at, and even more
beautiful in my kitchen. The colour is
different in different lights, and they look
like they cost a lot more than I paid. I
particularly like the fact they’re bigger
than metro tiles, but same style. I am so
pleased with these tiles.”
Attingham™ Seagrass Tile
t
S
t
r
a
e
g
i
c
R
e
p
o
r
t
5. High Quality and Auditable Carbon Offsets
The final step of the Measure, Reduce and Offset approach will be
to balance our remaining emissions as part of the pathway to being
carbon balanced by 2030. Working with World Land Trust has
been an essential part in this strategy to measure in an auditable
way the progress we are making and, following reduction
strategies, will allow us to balance our remaining emissions with
high quality carbon offset solutions.
We have also referenced the UN’s Sustainability Development
Goals (SDGs) for alignment, ensuring the Group is focusing in
areas which are also international priorities.
Total carbon emissions in FY21 were 9,012 tonnes CO2 (2020:
8,805 tonnes, 2019 11,704 tonnes), carbon emissions per store
were 27.2 tonnes per annum (2020: 24.7 tonnes per annum,
2019 32.0 tonnes per annum). The comparative period in 2020
includes a period of complete store closure due to Covid-19,
resulting in lower emissions per store.
We calculate these results based on the actual electricity and
gas consumed (energy carbon emissions have been compiled in
conjunction with our electricity and gas suppliers), multiplied by
emissions factors approved by the Environment Agency. Vehicle
emissions have been calculated by our in-house transport team
based on mileage covered multiplied by manufacturer quoted
emission statistics.
Transport and Company Vehicles
This year has continued to be impacted by disruption from the
pandemic where we have had to evolve our outbound transport
model to support business growth and the demand for delivery
to customers’ homes direct from our warehouse. We registered a
significant increase in deliveries via our new pallet carrier, meaning
that many orders are fulfilled on shared resource, on vehicles which
are largely full from collection to delivery. This is more efficient and
reduces the overall level of emissions compared to the previous
method of delivery, which involved more deliveries via our store
network. Another benefit of this change is that we also make a
number of smaller store deliveries via our pallet carrier, which
accounts for c.5% of store deliveries each week.
Our transport fleet (including the use of sub-contractors) covered a
total of 3.72 million kilometres using 1.25 million litres of fuel, an
increase of 23.3% and 21.9% respectively against 2020 due to
significant periods of complete lockdown in the prior year. Against
2019, kilometres driven have risen by 0.4% and litres of fuel used
have increased by 1.1%, compared to sales growth between those
periods of approximately 4%. To support our business, we have
introduced new route planning systems with the aim of reducing
miles travelled in the coming year. We are also trialling CNG
(compressed natural gas) and LNG (liquefied natural gas) options
that could reduce emissions by up to 30% in the future.
Company vehicles also include the company cars leased across the
organisation for sales and support staff. Fuel efficiency continues to
improve generally and we continue to champion the use of video
meetings where possible to continue to drive down company car
mileage, with CO2 tonnes from company cars falling by 43% from
2020 and 65% from 2019.
TOPPS TILES PLC ANNUAL REPORT AND ACCOUNTS FOR THE 53-WEEK PERIOD ENDED 2 OCTOBER 2021
39
30525-Topps-Tiles-AR2021-Strategic.indd 39
30525-Topps-Tiles-AR2021-Strategic.indd 39
Job number 10 December 2021 1:08 pm V9
10/12/2021 15:36:47
10/12/2021 15:36:47
SUSTAINABILITY
ENVIRONMENT
Supply Chain and Product Sourcing
As a Group, we focus on creating and building long-term strategic
relationships with manufacturing partners, enabling us to develop
product ranges which are truly innovative and supplied on an
exclusive basis. The scale of our business means we maintain these
relationships and now source directly from more than 160 factories
throughout the world.
As a trusted retailer and supplier to commercial projects, our clients
expect our products to be ethically sourced and therefore we look
beyond our internal operation and ask for complete transparency
across our supply base. Our supply chain can be complex but we
are committed to ensuring all our suppliers adhere to the highest
standards of ethics, are able to demonstrate safe working conditions
and are treating workers with dignity and respect. As a Group we
have a commitment to respecting human rights and identifying,
investigating, engaging and remediating any issues uncovered.
Our suppliers are required to comply with the Topps Responsible
Sourcing Code and confirm their acceptance of its provisions. This
code has been designed to be ethical, auditable, and achievable
and is in place to promote good working practices. The Code
represents our fundamental expectations of our supply partners in
relation to responsible sourcing. Compliance is underpinned by way
of contractual obligation and audit process. Suppliers applying this
code are expected as a minimum to comply with national and other
applicable local laws.
We are working closely with Intertek, the leading Quality Assurance
Experts who have started independent third-party auditing where
there is any product or geographical risks. At times during the
pandemic it has been difficult to get access to certain factories but to
support this, we have ensured that there has still been a level of due
diligence taking place during this period.
Where third party auditing has not been able to take place, we have
ensured that factories have completed self-assessment questionnaires
where the results have been verified by Intertek’s local offices.
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 Group business and its supply chains. We believe
that training in this area is important, and there is heightened
awareness across the organisation on being able to identify the risks
of modern day slavery.
* Our Responsible Sourcing Code of Conduct and Modern Day Slavery Statement can
be found on our website at www.toppstilesplc.com under Corporate Responsibility.
World Land Trust (WLT) assists individuals and organisations in quantifying their carbon footprint and, where appropriate,
offsetting their unavoidable emissions. We ask that organisations and individuals seeking to offset their emissions through the
Carbon Balanced programme follow three steps:
Measure: WLT can assist individuals and organisations in quantifying their current emissions through a free emissions audit.
Reduce: We urge people to take steps to reduce their carbon footprint and can offer information on how to reduce
your emissions.
Offset: Whilst every effort must be made to reduce emissions at source, some emissions may be unavoidable, at least in
the short-term. Through Carbon Balanced habitat conservation and restoration projects, the WLT can help you offset these
unavoidable emissions.
World Land Trust works with
project partners to protect
some of the world’s most
threatened habitats.
40
TOPPS TILES PLC ANNUAL REPORT AND ACCOUNTS FOR THE 53-WEEK PERIOD ENDED 2 OCTOBER 2021
30525-Topps-Tiles-AR2021-Strategic.indd 40
30525-Topps-Tiles-AR2021-Strategic.indd 40
Job number 10 December 2021 1:08 pm V9
10/12/2021 15:36:48
10/12/2021 15:36:48
Job number 10 December 2021 1:08 pm V9CASE STUDYREGENR8Regenr8 is a range of high quality adhesives, fit for any tiling project, that have been specially developed to use Ecosand. This is an inhouse developed composition of recycled waste materials that replaces natural sand in the product without impacting product performance. Regenr8 has been certified by greenspec PASS as a sustainable building product. Greenspec commented “We think that any replacement of dredged or excavated sand with a recycled material makes an important contribution to sustainable construction”. Regenr8 meets the requirements for greenspec, as it uses post-consumer recycled materials in substitution of resource degrading components. The post-consumer recycled material (Ecosand) used to replace sand is recycled and sourced from an ISO 9001 accredited UK waste recycler. Renenr8 will be sold exclusively through Topps Tiles stores and is available to the specification and construction sectors through Parkside and Strata Commercial sales. Topps Tiles continues to invest in working with manufacturing partners to bring more sustainable products to the UK market place.Recycling and WasteReducing the amount of waste sent to landfill continues to be a focus across the business and we are pleased to report continued improvements in this area. As a Group, we continue to work with our suppliers to improve the sustainability of tile collections and continue with our long-term commitment to support production of tiles with high recycled content. This unique technology has the potential to revolutionise tile production in the future utilising waste materials and reducing gas consumption. Waste is collected from across our store network to be sorted into different categories, much of which is recycled, including cardboard, shrink-wrap, polythene, wooden packaging, scrap metal and repairable wooden pallets. We use own vehicle fleet to bring our cardboard waste back to our Leicester distribution centre where it is bulk recycled and in the past year have recycled 60 tonnes of cardboard through this operation (+13% year on year), we also recycled 49 tonnes of polythene (+9% year on year), both increases recognising increased trading over the period. We have continued to reduce printing paper leaflets brochures for stores, including this annual report which was a primarily digital version for the first time in November 2020. We continue to work with our store waste partner, Biffa Waste Recycling for other recyclable material in a separate collection to general waste. Our store uniform supplier, Murray Uniforms, works to recycle our used uniforms into fibres which are used to manufacture upholstery, insulation and building materials. As of 1 October 2021 Murray sent zero returned uniforms to landfill. All Murray deliveries and collections are now (since July 2021) made on a Carbon Neutral Basis. Our Distribution Centre 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. We collect damaged tiles from our stores and in partnership with Green4life we have recycled 26% of our tiles returned in this way. This is a decrease on the previous year as the pandemic restricted our ability to recycle more of our tile waste. The tiles are diverted to a local quarry to be crushed and used as a composite of aggregate. The Company is a member of 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. 41Strategic ReportTOPPS TILES PLC ANNUAL REPORT AND ACCOUNTS FOR THE 53-WEEK PERIOD ENDED 2 OCTOBER 202130525-Topps-Tiles-AR2021-Strategic.indd 4130525-Topps-Tiles-AR2021-Strategic.indd 4110/12/2021 15:36:5310/12/2021 15:36:53 42
TOPPS TILES PLC ANNUAL REPORT AND ACCOUNTS FOR THE 53-WEEK PERIOD ENDED 2 OCTOBER 2021
30525-Topps-Tiles-AR2021-Strategic.indd 42
30525-Topps-Tiles-AR2021-Strategic.indd 42
Job number 10 December 2021 1:08 pm V9
10/12/2021 15:36:58
10/12/2021 15:36:58
1
Hemington (Parkside)
SUSTAINABILITY
ENVIRONMENT
Property
We are continuously reviewing new ways to reduce the
environmental footprint of our property estate and this year,
significant steps have been taken in three main areas.
LED lighting has been rolled out across our estate, including a
£2.3 million investment in 2021. Our Leicester support office is fully
lit with LEDs, with occupancy sensors in all areas to reduce energy
costs. Across our stores network, the LED lighting roll out was virtually
completed in 2021, with the programme aiming to deliver 2,007
tonnes of annual CO2 savings as well as reduced maintenance
across the estate.
All of our stores have automatic smart energy meters installed which
allows us to closely monitor and analyse gas and electricity use.
We are currently in the initial stages of looking at ways of
reducing our amounts of heating and cooling through improved
systems and operation.
Finally, another way of reducing waste is to reuse, and over the
last 18 months we have actively been using fixtures and fittings
from closed stores to fit out new stores, resulting in less waste and
cost savings.
What our customers say:
They have made our front path look
amazing. Many people stop to admire
them. The colours are quite unusual
and the design quite dominant they
really make a statement positioned
next to an area of plain tiles.”
Grosvenor™ Beige/Blue Tile
Electrical and Emissions
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 work proactively with our all our suppliers
to ensure that they 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. This is
now a key part of the supplier evaluation and audit process.
t
S
t
r
a
e
g
i
c
R
e
p
o
r
t
TOPPS TILES PLC ANNUAL REPORT AND ACCOUNTS FOR THE 53-WEEK PERIOD ENDED 2 OCTOBER 2021
43
30525-Topps-Tiles-AR2021-Strategic.indd 43
30525-Topps-Tiles-AR2021-Strategic.indd 43
Job number 10 December 2021 1:08 pm V9
10/12/2021 15:37:01
10/12/2021 15:37:01
SUSTAINABILITY
SOCIAL
Link to SDGs*
SUSTAINABILITY: SOCIAL (PEOPLE)
Action Area
What
Colleague
Experience
• My Voice
− Annual Survey
− Pulse Survey
• Onboarding and induction processes
• Further identification and recognition of “Moments that matter” through the employee lifecycle
• Wellbeing wheel
− Mental, physical, career, social and financial health support
• Topps Superstars, Virtual Huddles, Celebrating Success
• Mental health first aiders
Colleague
Voice
• Team Talk increase influence and involvement
• Listening forums
• Diversity and inclusion: focus on gender and ethnicity – building strategy, focus on
IWD, increasing number of female managers
• My Voice
− Annual Survey
− Pulse Survey
• Tea and Talk – for colleagues to promote mental wellbeing and support each other
Apprentices
• Plan to maximise use of levy:
− Leadership: Masters level/CMI accredited
− Functional apprenticeships
− Early careers
Remuneration • Reward review
• Store colleagues’ reward review
Charity
• Macmillan Cancer Support − Relaunch charity champions
− Achieved Mac’Million £1 million fundraising target
• Pennies online – able to take microdonations on our Retail website
• Supporting Leicestershire Cares
Our Charity Partnerships
Topps Tiles Group has continued to support charity throughout the
year, including live and virtual fundraising events, promotion of
our digital charity box in stores and the success of reaching our
fundraising target.
As a Group, we were delighted to reach our “Mac’million”, raising
a total of £1 million for Macmillan Cancer Support in the final year
of our partnership with the charity.
Our generous customers contributed more than £130,000 via Pennies,
the digital charity box, which asks customers to round up their purchase
to the nearest whole £1, with the “change” donated to charity.
We have also continued our membership of Leicestershire Cares
in recognition of the work they do locally to align businesses with
worthy causes, although the Covid-19 pandemic meant we were
unable to undertake our usual team challenge events.
Macmillan Cancer Support and Pennies Digital Charity Box
The partnership between Topps Tiles and Macmillan Cancer Support
began at the start of 2015 with a Company-generated £500,000
target for five years. This was reached during FY18, one year ahead
of schedule.
In 2019 colleagues voted to extend the partnership by an additional
two years and doubled the target to £1 million. This milestone was
reached in summer 2021.
Despite the challenges of social distancing and the pandemic,
colleagues continued with fundraising events, including a socially
distanced Tour de Topps cycling event, which raised more than
£5,500 as colleagues collectively cycled nearly 14,000 miles,
various raffles (conducted online) and smaller in-store events including
the annual Macmillan World’s Biggest Coffee Morning.
Leicestershire Cares
Although the pandemic stalled our team challenges during this year,
our membership continued with Leicestershire Cares and in September
2021 we were delighted to be presented with a certificate in
recognition of our contribution and support over the past five years.
Next Year
In autumn 2021, Topps Tiles colleagues were polled for their
choice of a new charity partner for the next five years.
Four charities were shortlisted across a range of genres, all
of which aligned with various aspects of Group culture.
Read more about our charity partner at www.toppstilesplc.com/
community-charity
44
TOPPS TILES PLC ANNUAL REPORT AND ACCOUNTS FOR THE 53-WEEK PERIOD ENDED 2 OCTOBER 2021
30525-Topps-Tiles-AR2021-Strategic.indd 44
30525-Topps-Tiles-AR2021-Strategic.indd 44
Job number 10 December 2021 1:08 pm V9
10/12/2021 15:37:02
10/12/2021 15:37:02
Job number 10 December 2021 1:08 pm V9MACMILLAN CANCER SUPPORT: Due to the impact of Covid-19, we know that this is the most worrying time in recent history to get a cancer diagnosis. There are approximately 50,000 people in the UK living with undiagnosed cancer because of the pandemic and the NHS is a long way from resolving the cancer treatment backlog. Our support is needed more than ever, which is why we are so thrilled with the fundraising we have received from Topps Tiles this year, during such a challenging time. In this final year of our partnership together, Topps Tiles has reached the incredible milestone of raising £1 million for Macmillan Cancer Support. This is an amazing achievement thanks to the dedication of colleagues and the generosity of Topps Tiles customers. Colleagues have taken on a socially distanced Tour de Topps challenge, got behind the World’s Biggest Coffee Morning, volunteered as Telephone Buddies to provide emotional support to people living with cancer, and much more. The support we have received from Topps Tiles this year has made a real difference, helping Macmillan to do whatever it takes to provide vital emotional, practical and financial support to people affected by cancer when they need it most.Over the last year, our city and county have been hit hard by Covid-19 and the lockdown. It has been a time of hardship and struggle for many communities, families and young people. Yet it has also been a time of people coming together, offering support and showing the real meaning of community. For Leicestershire Cares, the support that Topps Tiles has continued to give us during the last year has helped us to make a real difference. It enabled us to distribute “bags of hope” to over 1,700 families and young people who were isolated, struggling and in danger of being left behind, and to provide a range of online and safe distance support to vulnerable young people.Lynda Thomas CBEChief ExecutivePENNIES:Pennies and Topps Tiles first partnered in 2015, to offer customers shopping in stores the option to round-up their purchases, adding a simple digital micro-donation for charity when they pay by card. Since then, £820,000 has been raised from two million individual donations – a milestone reached in the past 12 months. That’s two million times a Topps Tiles customer has pressed a button on the card machine to add a tiny donation (on average just 37p). Two million small gestures of generosity from customers. Two million times they’ve made a difference. We’re hugely proud of our partnership, where DIYers and tradespeople alike have understood the impact of a few pence from day one. In the past 12 months, we have worked with the team to develop new opportunities for customers to make micro-donations, which we hope to launch very soon. We can’t wait to see how much more can be raised, and what a huge difference we can collectively make for the causes that Topps’ colleagues and customers care about most. We’re also thankful for the support Topps Tiles continue to provide to Pennies, a charity driving the micro-donation movement in the UK. Long-term partners like you allow us to keep growing and to make a difference for many more charities year after year. Alison Hutchinson CBECEO PenniesLEICESTERSHIRE CARES:The fact that during very challenging times, Topps Tiles were still willing to step up and give back, says a lot about their genuine commitment to community development and making our city and county a better and fairer place for all. We are looking forward to building on our partnership in the coming year so, together, we can do our best to ensure nobody is left behind. Kieran Breen CEO Leicestershire Cares From our Charity Partners:TOPPS TILES PLC ANNUAL REPORT AND ACCOUNTS FOR THE 53-WEEK PERIOD ENDED 2 OCTOBER 202145Strategic Report30525-Topps-Tiles-AR2021-Strategic.indd 4530525-Topps-Tiles-AR2021-Strategic.indd 4510/12/2021 15:37:0310/12/2021 15:37:03 SECTION 172 COMPANIES ACT 2006
Building positive relationships through strong engagement,
collaboration and dialogue with our stakeholders is vital to the
delivery of our strategy. The Board is well informed about the views
of stakeholders, through a range of engagement mechanisms. These
are designed to ensure that the Board takes account of stakeholders
in its own decision making and can be sure that stakeholder
interests are being actively considered at all levels of the Company’s
management in line with the Board’s strategic leadership.
More about key stakeholders and how we engage with them and
consider them in our decision making is set out below.
Decision Making for the Long Term
• The Board’s three-year plan sets the strategy over the longer term.
It is reviewed annually, with progress monitored in monthly reports
and regular reviews. To ensure appropriate oversight of decisions
likely to have an impact over the long term, certain key decisions
are reserved matters requiring Board approval.
• This is strengthened through clear reporting lines and sharing of
management information and KPIs with the Board and regular
contact between members of the Board and Senior Executives.
• Standing agenda points and standing papers, ensure
stakeholder issues are considered regularly by the Board.
• The Board has set a new long-term goal of 20% market share
by 2025.
Colleagues
• As a leading consumer brand and challenger in the commercial
market, our colleagues are fundamental to the successful
delivery of our strategy, as we continue to work to enhance
our reputation for providing high-quality products and excellent
customer service.
• We have a range of initiatives and activities to take into
account colleague interests upon which the Board receives
regular updates and is regularly consulted. See pages 18 and
19 for more on our colleagues.
• A member of the Board, Kari Daniels, is designated Employee
Engagement Director and provides feedback directly to the Board
on matters discussed at scheduled ‘Team Talk’ meetings. Monthly
Board reports cover matters concerning colleagues, including
health and safety; and the Board is kept informed on colleague
matters through a range of other reports, including monthly Board
updates on colleague matters, feedback from our “MyVoice”
colleague engagement programme, our annual colleague survey
and direct contact with colleagues through visits to stores.
• This year, with the Board’s support, we maintained our focus on
diversity and inclusion and, additionally, made mental health an
area of focus.
Suppliers, Customers, and High Standards of Business Conduct
• High standards of business conduct, serving our customers and
working with our suppliers are fundamental to the delivery of
our strategy.
• We have a range of initiatives and activities aimed at fostering
high standards of business conduct and good business
relationships with our suppliers and customers upon which the
Board receives regular updates and is regularly consulted. See
pages 18 to 19 for more on our colleagues.
• Monthly Board reports cover customer service quality and
developments with product and customer service initiatives.
• We worked closely with our suppliers to overcome challenges
in the supply chain and maintain stock availability for our
customers (many of whom are traders who rely on our having
stock to serve their customers).
• We strengthened our approach to business conduct with the
creation of a new role Head of Internal Audit.
The Community and the Environment
• Being a responsible member of our community and minimising our
impact on the environment is increasingly valued by our customers.
A positive response to these challenges is a source of competitive
advantage that will support our long-term sustainable growth. The
Board is highly engaged with ESG topics and considers them
integral to the Board’s work on strategy.
• We have a range of initiatives and activities to take into
account the community and the environment upon which the
Board receives regular updates and is regularly consulted.
See pages 44 and 45 for more on our commitment to
our community and see pages 38 to 43 for more on our
commitment to the environment.
• This year, the Board strengthened our commitment to the
environment and community, setting an ambition to be carbon
balanced by 2030 and designating CEO Rob Parker as the
Board’s lead on matters of sustainability.
Shareholders
• As owners of our Company, we rely on the support of
Shareholders and their views are important to us. We want to
enable them to understand our strategy and performance and
benefit from the successful delivery of our strategy.
• The Board actively considers the views and interests of
Shareholders in its decision making, supported by guidance
on s172 of the Companies Act 2006 included with every
Board agenda.
46
TOPPS TILES PLC ANNUAL REPORT AND ACCOUNTS FOR THE 53-WEEK PERIOD ENDED 2 OCTOBER 2021
30525-Topps-Tiles-AR2021-Strategic.indd 46
30525-Topps-Tiles-AR2021-Strategic.indd 46
Job number 10 December 2021 1:08 pm V9
10/12/2021 15:37:04
10/12/2021 15:37:04
t
S
t
r
a
e
g
i
c
R
e
p
o
r
t
• Paying full sick pay to isolating colleagues.
• Repaying furlough payments relating to FY21.
• Forgoing payment of an interim dividend to preserve cash.
Accordingly, the Board, both individually and together, consider
that it has acted in the way it considers, in good faith, would be
most likely to promote the success of the Company for the benefit
of its members as a whole, having regard to the stakeholders and
matters set out in s172 (1) (a–f) of the Companies Act 2006 in the
decisions taken during the Period.
1
1
Colleagues at the in-store display of mosaic tiles
• The Chairman and Executive Directors regularly reach out to
larger and institutional Shareholders through a combination
of personal contact and formal presentations and roadshows.
Shareholder feedback along with details of movements in our
Shareholder base is regularly reported to and discussed by the
Board, to understand the views of our Shareholders.
• Due to Covid-19, this year we held our Annual General
Meeting ‘behind closed doors’. To ensure Shareholders could
still ask questions, we provided a facility for Shareholders to
ask questions in advance.
• Despite Covid-19 restrictions, we ran a full programme of
Shareholder engagement events during the year.
Section 172 and Covid-19
This year, Covid-19 has been a particular area of focus. With the
health and safety of our customers and employees paramount,
and with our response to Covid-19 having the potential to affect
Shareholders and the wider community (in the form of the ‘public
purse’), the Board has received monthly updates on the Group’s
response to Covid-19 and has been consulted on key decisions,
including:
• Store opening arrangements during periods of lockdown.
•
Investment in Covid-19 safety measures ranging from PPE to
adapting the store, office and warehouse environments to
protect our customers and those colleagues who have to come
into work and providing the technology to facilitate effective
homeworking for those employees who can work at home.
TOPPS TILES PLC ANNUAL REPORT AND ACCOUNTS FOR THE 53-WEEK PERIOD ENDED 2 OCTOBER 2021
47
30525-Topps-Tiles-AR2021-Strategic.indd 47
30525-Topps-Tiles-AR2021-Strategic.indd 47
Job number 10 December 2021 1:08 pm V9
10/12/2021 15:37:06
10/12/2021 15:37:06
GOING CONCERN
AND VIABILITY STATEMENT
Going Concern
When considering the going concern assertion, the Board reviews
several factors including a review of risks and uncertainties, the
ability of the Group to meet its banking covenants and operate
within its banking facilities based on current financial plans, along
with a detailed review of a more pessimistic trading scenario that
was deemed severe but plausible. The more pessimistic trading
scenario was based on a further national lockdown related to the
Covid-19 pandemic during quarter two of FY22 that would see our
Retail stores closed to homeowners for a further three months.
The Group has already taken a number of actions to strengthen
its liquidity since the start of the Covid-19 pandemic, including
the sale and leaseback of the Group’s head office and central
warehouse buildings in Enderby in June 2020. The going concern
review also outlined a range of other mitigating actions that could
be taken in a severe but plausible trading scenario. These included,
but were not limited to, savings on store colleague costs, savings
on central support costs, reduced marketing activity, a reduction
of capital expenditure, management of working capital and
suspension of the dividend.
The Group’s cash headroom and covenant compliance was
reviewed against current lending facilities in both the base case
and the severe but plausible downside scenario. The current
lending facility was refinanced in July 2018 and expires in July
2023. In all scenarios, the Board have concluded that there is
sufficient available liquidity and covenant headroom for the Group
to continue to meet all of its financial commitments as they fall due
for the foreseeable future, a period of not less than 12 months from
the date of this report. Accordingly, the Board continue to adopt the
going concern basis in preparing the financial statements.
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 four years for the
following reasons:
• This is the basis on which the current strategic financial plans
have been prepared, based on our goal of delivering ‘1 in 5
by 2025’; and
• The business is largely dependent on UK consumer confidence
and discretionary spending, which is difficult to project beyond
this period.
The Directors’ assessment of the Group’s prospects has been made
with reference to the Group’s current position, which has been
strengthened by the extension of loan facilities concluded in the
period and the principle risks facing the group, as detailed in the
Strategic Report.
In assessing the viability of the Group, the Board considers the key
risks to the delivery of its financial plans relate to global supply
chain pressure, reduction in consumer confidence, additional
Covid-related restrictions and major reputational damage from
cybersecurity attacks, all of which would be expected to lead to a
reduction in sales. In addition, there are key risks such as supply
chain cost inflation, sustainability led cost pressures and currency
fluctuations, which could lead to a weakening in the Group’s gross
margin.
As a result, the Board has reviewed a number of sensitivities based
on a reduction in sales and gross margin over the viability period
of four years. 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. A 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 the sustained reduction in levels
of consumer spending and rising margin costs through the next
four years.
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 four years.
Directors’ Confirmation
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.
Non-financial Information Statement
Topps Tiles Plc has complied with the requirements of s414CB
of the Companies Act 2006 by including certain non-financial
information within the Strategic Report. This can be found as
follows:
• Group’s business model is on page 12.
•
Information regarding the following matters, including policies,
the due diligence process implemented in pursuance of the
policies and outcomes of those policies, can be found on the
following pages:
− Environmental matters on page 20 and pages 38 to 43;
− Colleagues on pages 18 and 19;
48
TOPPS TILES PLC ANNUAL REPORT AND ACCOUNTS FOR THE 53-WEEK PERIOD ENDED 2 OCTOBER 2021
30525-Topps-Tiles-AR2021-Strategic.indd 48
30525-Topps-Tiles-AR2021-Strategic.indd 48
Job number 10 December 2021 1:08 pm V9
10/12/2021 15:37:06
10/12/2021 15:37:06
1
2
1
Harbour Club, Chelsea (Parkside)
t
S
t
r
a
e
g
i
c
R
e
p
o
r
t
− Gender diversity on page 72;
− Social matters on pages 44 to 45;
− Respect for human rights on page 72; and
− Anti-corruption and anti-bribery matters on page 62.
• Where principal risks have been identified in relation to any
of the matters listed above, these can be found on pages 34
to 37, including a description of the business relationships,
products and services that are likely to cause adverse impacts
in those areas of risk, and a description of how the principal
risks are managed.
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 that are significant
to Topps Tiles Plc and to its subsidiary undertakings when viewed
as a whole.
Annual General Meeting
The Annual General Meeting for the period to 2 October 2021
will be held on 19 January 2022.
Please see the Notice of Annual General Meeting for more details.
• All key performance indicators of the Group, including those
non-financial indicators, are on pages 26 and 27.
The Strategic Report was approved by the Board of Directors and
signed on its behalf by:
• The Financial Review section on pages 28 to 33 includes,
where appropriate, references to, and additional explanations
of, amounts included in the entity’s annual accounts.
Rob Parker
Chief Executive
Stephen Hopson
Chief Financial Officer
10 December 2021
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
contain certain forward-looking statements. These statements are
made by the Directors in good faith based on the information
available to them up to the time of their approval of this report and
such statements should be treated with caution due to the inherent
uncertainties, including both economic and business risk factors,
underlying any such forward-looking information.
TOPPS TILES PLC ANNUAL REPORT AND ACCOUNTS FOR THE 53-WEEK PERIOD ENDED 2 OCTOBER 2021
49
30525-Topps-Tiles-AR2021-Strategic.indd 49
30525-Topps-Tiles-AR2021-Strategic.indd 49
Job number 10 December 2021 1:08 pm V9
10/12/2021 15:37:07
10/12/2021 15:37:07
OUR
GOVERNANCE
30525-Topps-Tiles-AR2021-Governance.indd 50
30525-Topps-Tiles-AR2021-Governance.indd 50
Job number 10 December 2021 1:08 pm V0
10/12/2021 17:10:51
10/12/2021 17:10:51
1
CONTENTS
Board of Directors
Executive Committee
Corporate Governance Report
Directors’ Report
Directors’ Responsibilities Statement
Directors’ Remuneration Report
52
54
55
70
73
74
O
u
r
G
o
v
e
r
n
a
n
c
e
1
Sylvan™ Graphite Antibacterial Tile
30525-Topps-Tiles-AR2021-Governance.indd 51
30525-Topps-Tiles-AR2021-Governance.indd 51
Job number 10 December 2021 1:08 pm V0
10/12/2021 17:10:53
10/12/2021 17:10:53
Job number 10 December 2021 1:08 pm V0BOARD OF DIRECTORSDarren ShaplandNon-Executive ChairmanChair of the Nomination and Governance CommitteeRob ParkerChief ExecutiveStephen HopsonChief Financial OfficerKeith DownSenior Independent Non-Executive Director and Chair of the Audit CommitteeDiana BreezeNon-Executive Director, Chair of the Remuneration CommitteeKari DanielsNon-Executive Director, Employee Engagement DirectorAlistair HodderCompany SecretaryCommittee Membership NCommittee Membership A N R Committee Membership A N RCommittee Membership A N RDarren joined the Board in March 2015. He has over 30 years of retail and consumer experience, having held senior financial and operational positions within the Burton Group, Arcadia and Kingfisher. Darren was Chief Financial Officer at J Sainsbury Plc between 2005 and 2010. He was also Non-Executive Chairman of Sainsbury’s Bank from 2006 to 2013 and Chief Executive Officer of Carpetright Plc from 2012 to 2013.Rob joined the Board in 2007, serving as Chief Financial Officer until 2019 when he was appointed to the role of Chief Executive. Rob’s previous roles before joining the Group included senior finance roles with the Boots Group and Savers Health & Beauty Ltd. Rob is accountable for Group Strategy, leadership of the Executive team, and Chairs the Group Health and Safety and Environmental Committees.Stephen joined the Board in November 2020 from Molson Coors Beverage Company, where he was Director of Central Finance for Western Europe. Before this, Stephen spent five years at Travis Perkins Plc, including three years as Finance Director for BSS, and has also held senior finance roles at Mitchells & Butlers Plc where he was responsible for Investor Relations among other functions. Stephen is a CIMA-qualified management accountant and holds an MBA. He is accountable for all areas of finance, IT and Group legal matters.Keith joined the Board in February 2015. A chartered accountant, Keith is currently the group finance director of Selfridges Group, having held this post since July 2018. He was previously the Chief Financial Officer of Dunelm Group Plc, Go-Ahead Group Plc and JD Wetherspoons Plc.Diana joined the Board in February 2021. An experienced HR Director, Diana has broad experience across the retail and consumer, logistics and property sectors. Since 2019, Diana has been Group HR Director at Bunzl and has previously held senior management positions with Land Securities, J Sainsbury and Accenture.Kari joined the Board in April 2021. An experienced retail and consumer sector Chief Executive, Kari is currently Chief Executive of Tesco Ireland. Before joining Tesco, Kari held senior management positions at Johnson Wax, Wella and Superdrug.Alistair was appointed Head of Legal and Company Secretary in June 2018. An experienced General Counsel and Head of Legal, Alistair started his legal career in private practice at national law firm Pinsent & Co. Before joining Topps Tiles, Alistair was Head of Legal at National House-Building Council.COMMITTEE MEMBERSHIP KEY:AAudit CommitteeCommittee Chair ISenior Independent Director RRemuneration CommitteeNNomination and Governance Committee52TOPPS TILES PLC ANNUAL REPORT AND ACCOUNTS FOR THE 53-WEEK PERIOD ENDED 2 OCTOBER 202130525-Topps-Tiles-AR2021-Governance.indd 5230525-Topps-Tiles-AR2021-Governance.indd 5210/12/2021 17:11:0110/12/2021 17:11:01 Job number 10 December 2021 1:08 pm V0Darren ShaplandNon-Executive ChairmanChair of the Nomination and Governance CommitteeRob ParkerChief ExecutiveStephen HopsonChief Financial OfficerKeith DownSenior Independent Non-Executive Director and Chair of the Audit CommitteeDiana BreezeNon-Executive Director, Chair of the Remuneration CommitteeKari DanielsNon-Executive Director, Employee Engagement DirectorAlistair HodderCompany SecretaryCommittee Membership NCommittee Membership A N R Committee Membership A N RCommittee Membership A N RDarren joined the Board in March 2015. He has over 30 years of retail and consumer experience, having held senior financial and operational positions within the Burton Group, Arcadia and Kingfisher. Darren was Chief Financial Officer at J Sainsbury Plc between 2005 and 2010. He was also Non-Executive Chairman of Sainsbury’s Bank from 2006 to 2013 and Chief Executive Officer of Carpetright Plc from 2012 to 2013.Rob joined the Board in 2007, serving as Chief Financial Officer until 2019 when he was appointed to the role of Chief Executive. Rob’s previous roles before joining the Group included senior finance roles with the Boots Group and Savers Health & Beauty Ltd. Rob is accountable for Group Strategy, leadership of the Executive team, and Chairs the Group Health and Safety and Environmental Committees.Stephen joined the Board in November 2020 from Molson Coors Beverage Company, where he was Director of Central Finance for Western Europe. Before this, Stephen spent five years at Travis Perkins Plc, including three years as Finance Director for BSS, and has also held senior finance roles at Mitchells & Butlers Plc where he was responsible for Investor Relations among other functions. Stephen is a CIMA-qualified management accountant and holds an MBA. He is accountable for all areas of finance, IT and Group legal matters.Keith joined the Board in February 2015. A chartered accountant, Keith is currently the group finance director of Selfridges Group, having held this post since July 2018. He was previously the Chief Financial Officer of Dunelm Group Plc, Go-Ahead Group Plc and JD Wetherspoons Plc.Diana joined the Board in February 2021. An experienced HR Director, Diana has broad experience across the retail and consumer, logistics and property sectors. Since 2019, Diana has been Group HR Director at Bunzl and has previously held senior management positions with Land Securities, J Sainsbury and Accenture.Kari joined the Board in April 2021. An experienced retail and consumer sector Chief Executive, Kari is currently Chief Executive of Tesco Ireland. Before joining Tesco, Kari held senior management positions at Johnson Wax, Wella and Superdrug.Alistair was appointed Head of Legal and Company Secretary in June 2018. An experienced General Counsel and Head of Legal, Alistair started his legal career in private practice at national law firm Pinsent & Co. Before joining Topps Tiles, Alistair was Head of Legal at National House-Building Council.THE COMPANYTopps Tiles PlcRegistration Number3213782Registered OfficeThorpe Way, Grove ParkEnderby, Leicestershire LE19 1SUSecretaryAlistair Hodder London Stock Exchange SymbolTPT The GroupComprises Topps Tiles Plc and all subsidiary companies.OUR ADVISERSAuditorPricewaterhouse Coopers LLPDonington Court Pegasus Business ParkCastle Donington, DE74 2UZBankersBarclays Bank PLC 3 Hardman Street, SpinningfieldsManchester, M3 3HFRegistrarsLink GroupCentral Square10th Floor, 29 Wellington StreetLeedsLS1 4DLSolicitorsOsborne Clark LLPOne London Wall London, EC2Y 5EBFinancial PR AdvisersCitigate Dewe Rogerson8th Floor, Holborn Gate26 Southampton BuildingsLondon, WC2A 1ANBrokersPeel Hunt LLP100 Liverpool StreetLondonEC2M 2ATLiberum Capital LimitedRopemaker Place Level 1225 Ropemaker StreetLondon, EC2Y 9LYTOPPS TILES PLC ANNUAL REPORT AND ACCOUNTS FOR THE 53-WEEK PERIOD ENDED 2 OCTOBER 202153Our Governance30525-Topps-Tiles-AR2021-Governance.indd 5330525-Topps-Tiles-AR2021-Governance.indd 5310/12/2021 17:11:0710/12/2021 17:11:07 Job number 10 December 2021 1:08 pm V0EXECUTIVE COMMITTEERob ParkerChief ExecutiveStephen HopsonChief Financial OfficerRichard CarterManging Director of RetailAppointed Managing Director of Retail in April 2018. An experienced retailer who has worked for both blue chip retailers and smaller, more entrepreneurial businesses. Before joining Topps Tiles in 2010 to take responsibility for retail operations and the trade division, Richard has previously held senior operations roles with the Spirit Group (Punch Taverns), Virgin Retail, Dixons and Office World (Staples). Richard started his career with Asda on their retail operations graduate recruitment programme.Dan LittleManaging Director of CommercialLinda SleathHR DirectorTim TatlockBuying DirectorAppointed Managing Director of Commercial in October 2021, succeeding Brian Linnington. An LLM graduate holding an MSc in Property, Dan has 20 years of retail, property, health and safety, and sales business experience, having held the roles of Surveyor, Head of Estates and Property Director before joining the Commercial Division in 2020 as Deputy Managing Director.Appointed HR Director in December 2019 and responsible for leading the People agenda across the Group. Before joining the business, Linda was HR Director, Supply Chain and Sales for Brakes UK, part of the Sysco Organisation, where she was responsible for the people agenda for the UK and approximately 7,000 colleagues. Linda has more than 29 years in operational leadership and HR leadership across FMCG and retail for such organisations as Boots International, Molson Coors and United Biscuits. Linda is a Fellow of the Chartered Institute of Personnel and Development and a Fellow of the Chartered Management Institute.Appointed Buying Director in April 2018. Responsible for all product assets and leads creative, sourcing, technical, supply chain and inventory. Tim has over 20 years of tile industry experience and before joining Topps Tiles held senior leadership positions with UK tile distributors and multinational tile manufacturers. His expert knowledge and innovative approach have seen progress to the position of Buying Director, after joining Topps Tiles as a Buyer in 2005.Brian Linnington stepped down as Managing Director of Commercial on 30 September 2021.54TOPPS TILES PLC ANNUAL REPORT AND ACCOUNTS FOR THE 53-WEEK PERIOD ENDED 2 OCTOBER 202130525-Topps-Tiles-AR2021-Governance.indd 5430525-Topps-Tiles-AR2021-Governance.indd 5410/12/2021 17:11:1810/12/2021 17:11:18 Job number 10 December 2021 1:08 pm V0CORPORATE GOVERNANCE REPORTDear ShareholderI am pleased to present our Corporate Governance Report for the period ending 2 October 2021 (the “Period”).The role of the Board is to provide effective leadership that promotes the long-term sustainable success of the Group, generating value for Shareholders and contributing to the communities in which we operate.This year, the Board prioritised adjusting the Group’s businesses to successfully meet the challenges and uncertainties resulting from the Covid-19 pandemic. The Board took the prudent decision to suspend dividend payments and I am pleased that our performance over the full year meant we have been able to resume dividend payments.Although the Covid-19 pandemic has been unprecedented, we have continued to focus on the development and delivery of our strategy and are confident in the Group’s ability to successfully manage short-term uncertainty and deliver our strategy over the long term. As a result of Covid-19 restrictions, the Board held some meetings online and I am pleased that we can return to mainly holding in-person meetings during 2022.We are clear that good governance is essential to the successful delivery of our strategy and sustainable success over the long term, and the Board is committed to meeting the highest standards for all stakeholders.UK Corporate Governance CodeThroughout the period, the Company has complied fully with the principles of the UK Corporate Governance Code 2018, including both the principles and the more detailed provisions, as reported. More on how the main principles and detailed provisions have been applied are set out below and in the Strategic Report, Directors’ Remuneration Report and Audit Committee Report.Annual General MeetingShareholders receive more than 20 working days’ notice of the Annual General Meeting (“AGM”) and ordinarily, all Directors will be present at the meeting. The Board would like to thank Shareholders for their engagement and support throughout the year.2021 Annual General MeetingCovid-19 restrictions significantly impacted the way we had to conduct our AGM this year. On 6 January 2021, England entered a third national lockdown. With the safety of our colleagues, Shareholders and other attendees being of paramount importance, we followed the best practice guidance at the time, as well as the applicable lockdown regulations, and held a closed meeting at our Head Office in Leicester. We provided the facility for Shareholders to submit questions in advance and voting was by proxy.2022 Annual General MeetingFor our next Annual General Meeting in January 2022, we are keen to welcome Shareholders in person. However, the safety and wellbeing of our colleagues, Shareholders and other attendees continues to be of paramount importance. We are, therefore, proposing to hold the Annual General Meeting at our Head Office in Leicester and are asking Shareholders who wish to attend register their intention to attend in advance. Should the situation change such that we consider it is no longer possible for Shareholders to attend the meeting, we will notify Shareholders of any changes to the arrangements on our website and a public announcement via RNS. For more on this, see the Notice of Annual General Meeting. The Annual General Meeting is typically a good opportunity for Shareholders to meet with the Directors and ask questions. To ensure that Shareholders have an opportunity to engage with the Board, the Board will be pleased to answer questions proposed in advance of the Meeting.Each substantive issue considered at the Annual General Meeting is the subject of a separate resolution. This year, the Board is again encouraging Shareholders to vote online by proxy. Voting on all resolutions will be conducted by way of a poll rather than a show of hands. This is a more transparent method of voting as Shareholders’ votes are counted according to the number of shares registered in their names, rather than according to the votes of Shareholders who attend the Annual General Meeting. The results will be published on our website www.toppstilesplc.com, and they will also be released to the London Stock Exchange via a Regulatory Information Service.Please see the Notice of Annual General Meeting for details of the resolutions,when and how to vote and how to ask a question in advance.I am pleased to present our Corporate Governance Report for the period ending 2 October 2021.”Darren ShaplandChairmanTOPPS TILES PLC ANNUAL REPORT AND ACCOUNTS FOR THE 53-WEEK PERIOD ENDED 2 OCTOBER 202155Our Governance30525-Topps-Tiles-AR2021-Governance.indd 5530525-Topps-Tiles-AR2021-Governance.indd 5510/12/2021 17:11:2010/12/2021 17:11:20 CORPORATE GOVERNANCE REPORT
Share Capital Management Resolutions
There was strong support from Shareholders for most of the
resolutions put to the meeting in January 2021. However, whilst
most of the proposed resolutions were passed, with majorities
over 98%, resolution 10 (Directors’ Authority to Allot Shares),
which was an ordinary resolution, passed with a majority of
less than 80% (receiving votes in favour of 74.25%), resolutions
11 (Disapplication of Pre-emption Rights – General) and 12
(Disapplication of Pre-emption Rights – Specific) and 13 (Authority
to Make Market Purchases of Shares), which were special
resolutions requiring a 75% majority, did not receive sufficient
support to be passed (receiving votes in favour of 74.35%,
74.34% and 74.36% respectively).
In accordance with provision 4 of the UK Corporate Governance
Code (the “Code”), the Board consulted and engaged with
Shareholders to understand and discuss concerns over these
resolutions. These resolutions are considered routine practice
for the UK listed companies and are within the Investment
Association’s Share Capital Management Guidelines. The Board
is aware, however, that some overseas investors have a policy
of not supporting these kinds of authorities, owing to concerns
regarding potential dilution of their shareholdings. The views of all
Shareholders are important to the Company, and the Board will
continue to engage with relevant Shareholders on this topic.
Dialogue and being available to Shareholders
The Board maintains a dialogue with its Shareholders, and
Rob Parker our Chief Executive and Stephen Hopson our Chief
Financial Officer meet regularly with investors and analysts to
discuss the Company’s performance. All Shareholders have access
to the Chairman and Senior Independent Director, as well as the
Company Secretary, who is available to discuss any questions that
they may have concerned the running of the Company.
The Directors build on a mutual understanding of objectives
between the Company and its institutional Shareholders, with
annual presentations and regular communications over the year.
In addition, I write to major Shareholders each year and meet
with many of them to discuss the Company and its governance.
Financial information is published on the Company’s website
www.toppstilesplc.com. The chairs of the Audit Committee,
Remuneration Committee and Nomination and Governance
Committee make themselves available to answer Shareholders’
questions.
The Board recognises the need to ensure that all Directors are fully
aware of the views of major Shareholders. Copies of all analysts’
research relating to the Company are circulated to Directors upon
publication. The Company receives a monthly Investor Relations report,
which includes an analysis of the Company’s Shareholder register.
Division of Responsibilities
Chairman and Chief Executive
The Chairman leads the Board and ensures its effectiveness. Darren
Shapland was independent on appointment and remains so as
assessed against the criteria set out in provision 10 of the Code.
The roles of the Chairman and Chief Executive are split, and the
Board has approved a written statement of the division of key
responsibilities between the Chairman and Chief Executive, which
is available on the Group’s corporate website.
Non-Executive Directors
The Board ensures that at least half of its members, excluding
the Chair, are independent non-executives and annually review
any relationships or circumstances which are likely to affect their
independence.
Keith Down was appointed as the Senior Independent Director with
effect from 20 January 2021. As Senior Independent Director, Keith
acts as a sounding board for the Chairman and an intermediary for
Directors and Shareholders, and is also available to Shareholders
should they wish to raise an issue through an alternative channel.
The Non-Executive Directors, led by the Senior Independent Director,
meet without the Chairman present annually to discuss the Chairman’s
performance and any other matters as required. The Non-Executive
Directors provide constructive challenge, strategic guidance and
appraise Executive Directors’ performance using against agreed
performance targets.
The Non-Executive Directors and Chairman meet regularly without
the Executive Directors present to review the performance of the
Executive Directors against such agreed performance targets.
Time Commitment
When making new appointments, the Board carefully considers the
competing demands on candidates’ time. Before the appointment,
candidates are required to disclose any significant commitments
along with the estimated associated time commitment. Each
Non-Executive Director’s letter of appointment sets out the time
commitment expected of them, and these letters will be available
for inspection at the Annual General Meeting.
The Company allows Executive Directors to hold no more than one
external Non-Executive Directorship with a listed entity. So far as is
practicable, the Company liaises with the Non-Executive Directors
to ensure the schedule of meetings for the year does not clash with
external appointments. Directors can attend meetings by video or
telephone if necessary.
56
TOPPS TILES PLC ANNUAL REPORT AND ACCOUNTS FOR THE 53-WEEK PERIOD ENDED 2 OCTOBER 2021
30525-Topps-Tiles-AR2021-Governance.indd 56
30525-Topps-Tiles-AR2021-Governance.indd 56
Job number 10 December 2021 1:08 pm V0
10/12/2021 17:11:20
10/12/2021 17:11:20
Conflicts of interest and raising concerns
Declarations of any actual or potential conflicts of interest with
items on the agenda are requested and made at the start of every
Board meeting. Should a matter be raised, the potential conflict
of interest would be considered by the Board as a whole and if
necessary, mitigating actions taken. The impact of any relationships
or involvements are considered carefully to ensure that they do
not compromise or override the Directors’ ability to exercise
independent judgement.
Concerns about the operation of the Board can be raised with the
Chairman or the Senior Independent Director. No such concerns
were raised during the year.
The Group promotes a culture of integrity, competence, fairness and
responsibility and under its whistleblowing procedure, colleagues
are encouraged to raise any concerns about malpractice or
unlawful conduct that they suspect may be taking place at work.
Summaries of reports are reported to the Audit Committee.
The Board
Role of the Board
The Board of Directors has overall responsibility for determining
the Company’s purpose, values, and Strategy and for ensuring
high standards of governance. The primary aim of the Board is
to provide effective leadership, which promotes the long-term
sustainable success of the Group, generating value for Shareholders
and contributing to the communities in which we operate.
1
Lampas™ Marine and Andira™ Smokey Brown
The Board comprises six members. Darren Shapland chairs both
the Board and the Nomination and Governance Committee, Diana
Breeze chairs the Remuneration Committee, Keith Down chairs
the Audit Committee and is the Senior Independent Non-Executive
Director. Kari Daniels is responsible for Employee Engagement.
Reserved matters
Certain defined matters are reserved for the Board including:
•
Investor relations
• Approval of Financial Statements and circulars
• Approval of operating and capital expenditure budgets
• Approval of the Strategy and business plan
• Approval of corporate transactions and changes to capital
structure, core activities or listing status
• Key policies including Modern Slavery and Ethical Trading,
Anti-Bribery, Health and Safety and Diversity
• Directors’ appointments
• Corporate Governance
• Key external and internal appointments
• Pensions and employee incentive
O
u
r
G
o
v
e
r
n
a
n
c
e
1
TOPPS TILES PLC ANNUAL REPORT AND ACCOUNTS FOR THE 53-WEEK PERIOD ENDED 2 OCTOBER 2021
57
30525-Topps-Tiles-AR2021-Governance.indd 57
30525-Topps-Tiles-AR2021-Governance.indd 57
Job number 10 December 2021 1:08 pm V0
10/12/2021 17:11:23
10/12/2021 17:11:23
CORPORATE GOVERNANCE REPORT
Board Composition
As announced in September 2020, Stephen Hopson was appointed Chief Financial Officer with effect from 2 November 2020. As
announced on 26 November 2020 and updated on 17 June 2021, Andy King stood down from the Board on 20 January 2021, Diana
Breeze joined the Board as a Non-Executive Director on 1 February 2021, Kari Daniels joined the Board as a Non-Executive Director on
1 April 2021 and Claire Tiney stood down from the Board on 16 June 2021.
Appointed
Independent
Audit
Nomination and
Governance
Remuneration
Darren Shapland 19-03-15 Yes
Non-Executive Board Chair
Rob Parker
10-04-07
Executive
Chief Executive
Stephen Hopson 02-11-20
Executive
Chief Financial Officer
Keith Down
02-02-15 Yes
Non-Executive
Senior Independent Director
Diana Breeze
01-02-21 Yes
Non-Executive
Kari Daniels
01-04-21 Yes
Non-Executive
Employee Engagement Director
I
I
I
C
M
M
C
I
I
M
M
M
I
I
I
M
C
M
KEY:
C Chair
M Member
I Invitation – may attend at the invitation of the Chair
Board Meetings
The Board held 12 scheduled meetings during the Period, based on an annual plan agreed with the Chairman, including an annual
Strategy review.
Ahead of each meeting, the Directors are given up-to-date information about trading performance, the Group’s overall financial position
and its achievement against the prior year, budgets and forecasts.
Regular items at Board meetings include updates on health and safety, sustainability, diversity and inclusion, the Group’s financial position
performance against KPIs and progress towards strategic objectives. Members of the Executive team are regularly invited to attend to
update the Board concerning their specific responsibilities and are invited to give feedback to the Board.
At Board meetings, the Chairman ensures that each Director can make an effective contribution within an atmosphere of transparency and
constructive debate, and feedback is given at the end of each meeting.
Between Board meetings, financial and other relevant information is circulated to the Directors as necessary; the Chairman maintains
frequent direct contact with the Executive and Non-Executive Directors and keeps the Non-Executive Directors informed of material
developments. Directors regularly meet with Senior Executives and visit stores.
Attendance at Scheduled Board and Board Committee Meetings
Board of Directors
Audit Committee
Remuneration Committee
Nomination and Governance Committee
KEY:
D Shapland
R Parker
S Hopson
12 12
12 12
12 12
I
I
2
2
100%
I
I
I
I
I
I
K Down
12 12
4
4
2
4
4
2
D Breeze
K Daniels
8
2
3
1
8
3
3
1
5
2
1
0
6
2
2
0
100%
100%
100%
93%
80%
Meetings attended
Possible meetings
I Invitation – may attend at the invitation of the Chair
Diana Breeze and Kari Daniels joined during the year and were unable to attend a small number of meetings due to prior commitments
during their first year of appointment.
58
TOPPS TILES PLC ANNUAL REPORT AND ACCOUNTS FOR THE 53-WEEK PERIOD ENDED 2 OCTOBER 2021
30525-Topps-Tiles-AR2021-Governance.indd 58
30525-Topps-Tiles-AR2021-Governance.indd 58
Job number 10 December 2021 1:08 pm V0
10/12/2021 17:11:24
10/12/2021 17:11:24
Contribution of Directors
The Nomination and Governance Committee considers the
role and contribution of Directors annually as part of its work
on succession planning. It believes that each member of the
Board continues to be important to the Company’s long-term
sustainable success with their skills and experience, including:
• Darren Shapland: an experienced Board Chair, with over
30 years of retail and consumer experience. Darren sets
the agenda for meetings in consultation with Rob Parker
our Chief Executive, Stephen Hopson our Chief Financial
Officer and Alistair Hodder our Company Secretary, chairs
the meetings and promotes a culture of openness and
debate, including inviting the Executive Directors and the
NEDs to debate and challenge the Group’s Strategy.
• Rob Parker: a qualified accountant with over 14 years
of Board experience, Rob has led the Group through the
challenges of Covid-19. Rob formulates and proposes the
strategic direction of the Group and incorporate this into
business plans for regular discussion and agreement by the
Board and has overall responsibility for the operational and
financial performance of the Group.
• Stephen Hopson: a qualified accountant and experienced
Finance Director. Stephen is responsible for the
management of the Group’s financial affairs and supporting
Rob in the delivery of our plan.
• Keith Down: a qualified accountant and experienced Chief
Financial Officer, with substantial retail and consumer
experience. Keith will continue to chair the Audit Committee
and as Senior Independent Director, Keith will provide
a sounding board for the Chairman and serve as an
intermediary for the other Directors when necessary and be
available to Shareholders.
• Diana Breeze: an experienced HR Director, with substantial
retail and consumer experience to contribute to the Board,
as well as chairing the Remuneration Committee.
• Kari Daniels: an experienced Chief Executive, with
substantial retail and consumer experience to contribute
to the Board, as well as acting as Employee Engagement
Director.
Independence
The Board reviews the independence of Non-Executive Directors on
an ongoing basis. None of the circumstances set out in provision
10 of the Code apply and the Board is satisfied that all Non-
Executive Directors remain independent.
Re-election
All Directors are subject to annual re-election at the Annual General
Meeting in January 2022.
Advice
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 address issues to the Senior
Independent Non-Executive Director.
Development
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. All members of the Board have access to various technical
seminars and professional updates on a range of relevant topics
useful for enhancing the Board’s knowledge and understanding
of corporate governance. Provision is made within the Board’s
timetable for regular updates concerning areas including the
economy, the market, corporate governance, and developments in
remuneration practice.
O
u
r
G
o
v
e
r
n
a
n
c
e
1
Flute™ White
2
Bellingham™
1
2
TOPPS TILES PLC ANNUAL REPORT AND ACCOUNTS FOR THE 53-WEEK PERIOD ENDED 2 OCTOBER 2021
59
30525-Topps-Tiles-AR2021-Governance.indd 59
30525-Topps-Tiles-AR2021-Governance.indd 59
Job number 10 December 2021 1:08 pm V0
10/12/2021 17:11:28
10/12/2021 17:11:28
CORPORATE GOVERNANCE REPORT
Board Committees
The Board operates three committees: the Nomination and Governance Committee, the Remuneration Committee and the Audit
Committee. All Committees meet regularly and have formal written terms of reference, which are available on our website.
BOARD
•
Investor relations.
• Approval of Financial Statements and circulars
• Approval of operating and capital expenditure budgets
• Approval of the Strategy and business plan
• Approval of corporate transactions and changes to capital
structure, core activities and listing status
• Approval of key policies including Modern Slavery and
Ethical Trading, Anti-Bribery, Health and Safety and
Diversity
• Directors’ appointments
• Corporate Governance
• Key external and internal appointments
• Pensions and employee incentives
REMUNERATION
COMMITTEE
• Chair and Executive Directors’
AUDIT
COMMITTEE
• Financial reporting
remuneration
• Senior management
remuneration
• Share incentive plans
• Narrative reporting (fair,
balanced and understandable)
•
Internal controls and risk
management systems
• Employee benefits structures
• Compliance, whistleblowing
and fraud
•
Internal audit
• External audit
NOMINATION AND
GOVERNANCE
COMMITTEE
• Board structure
• Board evaluation
• Board, Committee, and senior
executive appointments
• Board, Committee and senior
executive succession and
development plans
• Diversity and inclusion
Governance Framework
Good governance is essential to the successful delivery of our strategy, and the Board is committed to meeting the highest standards for all
stakeholders.
ESG
This year, as well as addressing the immediate challenges of Covid-19 and reviewing our strategy to achieve our new goal (20% market
share by 2025), we continued to focus on Environment, Social and Governance (“ESG”). We identified several key topics as areas of
priority for delivery and strengthened governance.
Each ESG topic is reviewed by the Board on an annual basis, with a report from the Company Secretary or relevant member of the
Executive, to brief on developments over the year and agree on priorities for the coming year and beyond.
60
TOPPS TILES PLC ANNUAL REPORT AND ACCOUNTS FOR THE 53-WEEK PERIOD ENDED 2 OCTOBER 2021
30525-Topps-Tiles-AR2021-Governance.indd 60
30525-Topps-Tiles-AR2021-Governance.indd 60
Job number 10 December 2021 1:08 pm V0
10/12/2021 17:11:29
10/12/2021 17:11:29
1
1
Busca™ Silver Bevel and Prossimo™
Environment
Social
Governance
Last year we created a Sustainability Council, which meets quarterly to coordinate Group-wide activity,
consolidate improvements, identify opportunities, agree on priorities, and develop KPIs to measure
performance. This year, we built on the work on the Council, committing to key targets including carbon
balanced by 2030, and strengthened governance with Rob Parker our Chief Executive being designated as
the Director responsible for Board-level leadership and giving regularly scheduled reports to Board.
Last year we launched new initiatives on diversity and inclusion, with a data-driven approach to better
understanding our workforce and set appropriate goals and KPIs for senior executive performance objectives,
to promote equality at work and provide a link to executive accountability. This year, we built on this, making
gender diversity and mental health particular areas of focus and strengthened governance with Rob Parker
our Chief Executive being designated as the Director responsible for Board-level leadership on diversity and
inclusion, and giving regularly scheduled reports to Board. For more on our approach to social matters, see
pages 44 and 45.
O
u
r
G
o
v
e
r
n
a
n
c
e
Last year we embedded ESG. This year, we reviewed and agreed on our strategy to respond to developments
in the field of transparency in supply chains (where reporting requirements have become more stringent),
Climate-Related Financial Disclosures (which will require additional disclosures in our Annual Report on
FY22) and on audit and governance reforms (which we expect to impact significantly on the role of the Audit
Committee and the audit process). Each has a dedicated working group led by a member of the Board or
the Company Secretary, with regular reports on progress to the Board or Audit Committee. In addition, the
Board took action to address points raised in the annual Board evaluation (for more on this, see page 67) and
continued to monitor the Group’s response to Brexit and Covid-19.
TOPPS TILES PLC ANNUAL REPORT AND ACCOUNTS FOR THE 53-WEEK PERIOD ENDED 2 OCTOBER 2021
61
30525-Topps-Tiles-AR2021-Governance.indd 61
30525-Topps-Tiles-AR2021-Governance.indd 61
Job number 10 December 2021 1:08 pm V0
10/12/2021 17:11:31
10/12/2021 17:11:31
CORPORATE GOVERNANCE REPORT
Board Effectiveness
We consider Board effectiveness in our internal Board evaluation
review. We aimed to stimulate the Board’s thinking on how
members of the Board can carry out their role and encourage them
to focus on continually improving their effectiveness. The review
process was aligned with the FRC Code on Board Effectiveness.
We believe that our Board is a strong team that works well
together. As always, there is scope to improve our effectiveness
further. Last year, we agreed on several actions and have reported
on progress on pages 67 and 68, and this year we again agreed
on several actions and will report on progress next year.
Risk Review
We carry out a robust assessment of the Company’s emerging and
principal risks through our risk review process. For more on this,
see pages 34 to 37.
Culture, Purpose and Values
Our annual strategy review considers how corporate culture is
aligned with the purpose, values and strategy set by the Board.
For more on our culture see pages 18 and 19.
Section 172
Alistair Hodder, our Company Secretary, sets out guidance on
s172 of the Companies Act 2006 on every Board agenda to
support the Board’s consideration of its requirements. The interests
of our stakeholder groups are considered in a variety of ways, as
set out in our Section 172 Statement on pages 46 and 47.
Fair, Balanced, Understandable
The Board has reviewed the contents of this Annual Report and
considers it fair, balanced, understandable, and an accurate
representation of the Company’s current position, performance,
business model and strategy. The basis for this view is that the
Directors are provided with the relevant information to perform
their duties and have access to members of management, as they
require. The Board meets regularly and is given adequate time to
probe debate and challenge business performance. The Board has
received a report from the Audit Committee concerning the financial
results and based on that, has approved the final accounts for the
period. Having gained a thorough understanding of the business,
each member of the Board has also had the opportunity to review
and influence this report and as such has concluded in line with the
statement above.
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. This process is designed to manage rather than
eliminate the risk of failure to achieve business objectives. It can
only provide reasonable and not absolute assurance against
material misstatement or loss. Following a review of the approach
to Internal Audit, this year we strengthen our approach with the
appointment of a Head of Internal Audit.
The Group has established internal control and risk management
systems concerning the process for preparing the consolidated
financial statements. Inter-company transactions, balances and
unrealised gains and losses on transactions between Group
companies are eliminated on consolidation. Accounting policies of
subsidiaries are consistent with the policies adopted by the Group.
Management regularly monitors changes in accounting standards
and financial reporting requirements and reflects any relevant
changes in the financial statements where appropriate.
The full-year financial statements are subject to external audit.
The Audit Committee receives reports from management and
the external Auditors on significant judgements, changes in
accounting policies, changes in accounting estimates and any
other appropriate changes to the financial statements.
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 considered all significant aspects
of internal control in conjunction with the review of the work of
Internal Audit.
During its review of the system of internal control, the Board has not
identified nor been advised of any failings or weaknesses that it has
determined to be significant. Therefore, a confirmation in respect of
necessary actions has not been considered necessary.
Modern Slavery
The Board is committed to ensuring that acts of modern-day slavery
and human trafficking do not occur in relation to the Company,
or its supply chain. To meet this commitment, the Company
introduced The Topps Tiles Responsible Sourcing Code, which is
explained in our Modern Slavery Statement on the Company’s
website. This Code is reinforced by commercial agreements that
require our suppliers to be fully compliant with local laws, and
we pay attention to labour standards and factory conditions. Our
Responsible Sourcing Code has been rolled out to and agreed
upon by all factories supplying our retail business, and we have
focused on rolling out the Code to suppliers of our commercial
businesses. Covid-19 restrictions have made it more difficult to
monitor compliance as factory visits have been restricted. However,
we have continued to work closely with leading Quality Assurance
experts, Intertek, to identify risks within our supply chain. This work
is centred around regional risks in the building and construction
sector, and their work is targeted based on an audit process aimed
at determining which areas are subject to the highest risk.
Anti-Corruption and Anti-Bribery
The Board is committed to ensuring that our business is conducted
honestly and ethically. We take a zero-tolerance approach to
bribery and corruption and are committed to acting professionally,
fairly and with integrity in all our business dealings and
relationships wherever we operate. This commitment includes the
implementation of an anti-bribery policy, which all colleagues are
required to adhere to and to enforce an effective system of control,
through our dedicated Internal Audit team. The team works to a
plan agreed with the Audit Committee and reports progress to the
Audit Committee on a twice-yearly basis.
Darren Shapland
Non-Executive Chairman
10 December 2021
1
Enis™ Black Slate and Everscape™ Enis Black Slate Modular
62
TOPPS TILES PLC ANNUAL REPORT AND ACCOUNTS FOR THE 53-WEEK PERIOD ENDED 2 OCTOBER 2021
30525-Topps-Tiles-AR2021-Governance.indd 62
30525-Topps-Tiles-AR2021-Governance.indd 62
Job number 10 December 2021 1:08 pm V0
10/12/2021 17:11:32
10/12/2021 17:11:32
O
u
r
G
o
v
e
r
n
a
n
c
e
1
TOPPS TILES PLC ANNUAL REPORT AND ACCOUNTS FOR THE 53-WEEK PERIOD ENDED 2 OCTOBER 2021
63
30525-Topps-Tiles-AR2021-Governance.indd 63
30525-Topps-Tiles-AR2021-Governance.indd 63
Job number 10 December 2021 1:08 pm V0
10/12/2021 17:11:34
10/12/2021 17:11:34
Job number 10 December 2021 1:08 pm V0CORPORATE GOVERNANCE REPORTAUDIT COMMITTEE REPORTI am pleased to present the Audit Committee’s report for the year ended 2 October 2021. The report sets out the Committee’s work in relation to financial reporting, internal audit, risk management and oversight of the external audit process.”Keith DownChair of the Audit CommitteeOther Members:Diana BreezeKari DanielsMeetings Held:4The CommitteeThe Committee held four scheduled meetings during the Period, based on an annual plan agreed with the Chair of the Committee.The Audit Committee comprises independent Non-Executive Directors Keith Down (Chair), Diana Breeze and Kari Daniels. Their qualifications are detailed on pages 52 and 53. The Chair has relevant experience, being a qualified Chartered Accountant, a former Chief Financial Officer of a listed company and a serving Chief Financial Officer of a non-listed company. The Chief Executive Officer, Chief Financial Officer and the Chair of the Board may attend meetings by invitation. Role of the Audit CommitteeThe 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 internal audit reports regularly to review the effectiveness of its work. The Committee meets with the external Auditors and considers the Annual 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.The Committee is also responsible for ensuring that arrangements are in place to enable staff, in confidence, to raise any concerns about possible improprieties in matters of financial reporting or other issues.The Audit Committee Chair, 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 is functioning well, in accordance with its Terms of Reference and corporate governance practice providing appropriate assurance to the Board.FY21 KEY ACHIEVEMENTS:• Oversight of decisions concerning the accounting treatment of Government support payments. • Oversight of improvements in the approach to the management and reporting of stock provisions.• Oversight of ongoing improvements to the implementation of IFRS 16.• Oversight of the ongoing work to simplify the Group’s legal structure and reduce complexity.• Oversight of a review of the Internal Audit function, including the creation of a new Head of Internal Audit role, to strengthen the function.AREA OF FOCUS FY22:• Oversight of work to deliver an improved Internal Audit function.• Oversight of the completion of the transition of IFRS 16 to business as usual.• Oversight of the work to simplify the Group’s legal structure.• Oversight of the implementation of new processes and reporting concerning the requirements from the Task Force on Climate-related Financial Disclosures.• Oversight of development of the Group’s response to further Audit and corporate governance reforms.64TOPPS TILES PLC ANNUAL REPORT AND ACCOUNTS FOR THE 53-WEEK PERIOD ENDED 2 OCTOBER 202130525-Topps-Tiles-AR2021-Governance.indd 6430525-Topps-Tiles-AR2021-Governance.indd 6410/12/2021 17:11:3610/12/2021 17:11:36 The Work of the Audit Committee
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. The
Committee, with support from senior operational managers,
performs this process. The Committee reviews the strategic risk
schedule on a half-yearly basis to ensure that any actions that have
been identified are being progressed; additionally, the Board
receives quarterly updates. It also reviews the Group’s system of
internal control by reference to an Internal Controls Framework
assessment and reports its findings quarterly 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 activities 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 the Company’s management to present 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 considers what appropriate
mitigating effects should be implemented. In addition, these risks
are regularly reviewed and monitored at Board meetings. In
the current year, the review of risks has had a particular focus
on Covid-19 and supply chain, and their impact on Group
operations.
• Review of Poor-performing Stores – as part of both the half-
year and full year-end review process, poorly performing stores
are considered, and any related impairments and/or property
provisions are provided for. Management will then follow up
with detailed action plans to either improve store performance
or seek an exit solution. The Audit Committee also 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 IFRS 16 Implementation – the Group has applied
IFRS 16 ‘Leases’ since 2020 and the Audit Committee has
reviewed the approach taken, and the development of
processes to enable IFRS 16 to become a standard part of
routine monthly accounting. The Committee continues to review
its approach to reporting to allow a balanced view between
comparison to years prior to 2020 (calculated on a pre-IFRS
16 basis), and the final statutory reported financials.
• 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 conducts a
regular review of any products sold, or likely to be sold, below
the original cost price. Inventory provisions are prepared in
accordance with these reviews. The Audit Committee reviews
the output of these reviews and approves the provisions
included in the Annual Report.
• Going Concern and Long-term Viability Statement –
Stephen Hopson, our 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 a four-year look-
forward basis. The conclusions of those reviews are included in
the Strategic Report.
• Annual Review of the Group Tax and Treasury Policy –
performed annually and published on the Company’s website.
• Monitoring the Group’s compliance with Accounting Standards
– with a particular focus on new accounting standards, such
as IFRS 16 (accounting for leases). The Committee reviews
all material judgemental accounting areas such as loyalty
accounting and all items considered to be adjusting to support
external understanding of underlying performance.
Auditors
We selected PricewaterhouseCoopers LLP as Auditors following a
tendering exercise carried out in 2018, confirming the appointment
at the AGM in January 2019. A resolution will be proposed
at the Annual General Meeting in January 2022 to reappoint
PricewaterhouseCoopers LLP as the Auditors.
The scope of the external audit of the 2021 Annual Report and
Accounts was presented by the external Auditor to the Committee
in May 2021 so that the Committee could discuss and challenge
the audit plan and understand the key elements. The Committee
considers the effectiveness of the external Auditor during the year
and, with input from management, reviews its performance after the
year-end audit has been completed. In undertaking this assessment,
the Committee considers:
• The experience and expertise of the Auditor;
• The completion of the agreed external audit plan;
• The content, quality of insights and added value of external
audit reports;
• The robustness and perceptiveness of the external Auditor in
their handling of key accounting and audit judgements; and
• The interaction between management and the Auditor.
The Committee also reviews the independence of the Company’s
external Auditors.
The Company has a policy for the provision of non-audit services,
which is published on the Company’s website. Under the policy,
the external Auditors have not provided non-audit services to the
Company during the Period.
During the year, our Auditors have specifically focused on the
implementation of IFRS 16 ’Leases’ and also the development of
enhanced stock provisioning methodology.
The audit fee for the statutory audit of the Company’s consolidated
financial statements and audit-related services for the Period is
£303,000. (2020: £233,000).
O
u
r
G
o
v
e
r
n
a
n
c
e
TOPPS TILES PLC ANNUAL REPORT AND ACCOUNTS FOR THE 53-WEEK PERIOD ENDED 2 OCTOBER 2021
65
30525-Topps-Tiles-AR2021-Governance.indd 65
30525-Topps-Tiles-AR2021-Governance.indd 65
Job number 10 December 2021 1:08 pm V0
10/12/2021 17:11:37
10/12/2021 17:11:37
Job number 10 December 2021 1:08 pm V0CORPORATE GOVERNANCE REPORTThe CommitteeThe Committee held two scheduled meetings during the Period, based on an annual plan agreed with the Chair of the Committee.The Committee comprises independent Non-Executive Directors Darren Shapland (Chair), Keith Down, Diana Breeze and Kari Daniels.Role of the CommitteeThe principal responsibilities of the Committee are to regularly review the structure, diversity, size and composition of the Board, to support the Board in fulfilling its responsibilities to ensure that effective succession planning processes and pipelines are in place for Directors and other senior management. The Committee ensures there are formal, rigorous and transparent processes in place for the appointment of Directors and other senior managers.The Nomination and Governance Committee leads the process for appointments, ensures plans are in place for orderly succession to both the Board and senior management positions, oversees the development of a diverse pipeline for succession and diversity, on which our policy is included in the Directors’ Report, and oversees the delivery of high standards of corporate governance.The Committee is actively involved in guiding the planning and selection process for Board roles and is consulted on all senior-level appointments and developments. In addition, the Committee draws up and regularly reviews long, medium and short-term succession plans for all key senior management positions within the Company. As well as having short-term contingency plans in place, the aim is to ensure that the Company identifies, develops and promotes candidates into appropriate positions of leadership. To this end, the internal promotion of our Dan Little to the Executive Committee as Managing Director of Commercial was a welcome development. NOMINATION AND GOVERNANCE COMMITTEE REPORTAs Chair of the Nomination and Governance Committee, I am pleased to present the Committee’s report for the year ended 2 October.”Darren ShaplandChair of the Nomination and Governance CommitteeOther Members:Diana BreezeKeith DownKari DanielsMeetings Held:2FY21 KEY ACHIEVEMENTS:• Board succession and development; supporting the successful induction of Stephen Hopson as Chief Financial Officer, Diana Breeze as Non-Executive Director and Chair of the Remuneration Committee, and Kari Daniels as Non-Executive Director and Employee Engagement Director, resulting in one-third of the Board being female.• Executive succession and development plans, including planning for the succession of the role of Managing Director of Commercial Director, with the appointment of Dan Little.• After making ESG an area of focus for FY21, continuing to support the development of the approach to ESG.• Oversight of the development of the Company’s Strategy on Diversity and Inclusion.• Executive and Non-Executive Directors’ succession and planning, reviewing the size, diversity, skills, and experience of the Board and considering the future needs of the Group.• Board and Committee evaluations; planning actions to respond to points raised in the evaluation feedback.AREA OF FOCUS FY22:• The Committee will continue to develop Board and Executive succession plans with a particular focus on ethnic and gender diversity, monitor developments in and delivery of each of the key ESG topics and review the approach to Board and Committee evaluation.66TOPPS TILES PLC ANNUAL REPORT AND ACCOUNTS FOR THE 53-WEEK PERIOD ENDED 2 OCTOBER 202130525-Topps-Tiles-AR2021-Governance.indd 6630525-Topps-Tiles-AR2021-Governance.indd 6610/12/2021 17:11:3910/12/2021 17:11:39 Board Evaluation
Each year there is a formal and rigorous annual evaluation of the performance of the Board, its Committees, the Chairman and individual
Directors. The evaluation provides an opportunity to highlight areas for further development. In FY19 we carried out an externally
facilitated evaluation, and we aim to do this every three years. This year, an internal evaluation was undertaken.
Last year’s evaluation found a positive approach to corporate responsibility, culture and values, strong retail knowledge and willingness
to ask challenging questions with the right balance between challenge and support. We noted improvements in the way the Board has
worked together, in particular, to address the challenges of Covid-19 while maintaining focus on the Company’s long-term strategy. The
evaluation highlighted some areas for attention in FY21, which we addressed, as reported below:
Key FY20 Board evaluation findings
Actions taken
Long-term strategy
Commercial market
Sustainability
Diversity
Induction
We reviewed and refreshed the approach to the Annual Strategy planning
session; placing much more emphasis on data analysis and external expertise
to inform the Board’s discussion of and decision making on strategy, supported
by a more rigorous approach to the ongoing review of progress.
The Managing Director of Commercial briefs the Board on developments twice
annually and has been supported in reviewing elements of the Commercial
strategy and strengthening the Commercial sales team with key hires.
We set a key target (carbon balanced) and strengthened our Governance with
Rob accountable at Board level and Chairing the Environmental Committee.
We achieved our aim of meeting the one-third target for female participation
on the Board and have identified ethnic diversity as an area for future attention
at the Board level.
Stephen, Diana and Kari were supported with a formal induction programme,
which received positive feedback.
This year’s evaluation followed significant changes in Board composition. I am pleased that the results reflected well on the actions we
had taken in response to last year’s evaluation and continued to reflect a positive view on the performance of the Board and Committees.
The evaluation did highlight for attention the need for additional focus on some areas, as reported overleaf.
1
Tarpley™ Grey
1
O
u
r
G
o
v
e
r
n
a
n
c
e
TOPPS TILES PLC ANNUAL REPORT AND ACCOUNTS FOR THE 53-WEEK PERIOD ENDED 2 OCTOBER 2021
67
30525-Topps-Tiles-AR2021-Governance.indd 67
30525-Topps-Tiles-AR2021-Governance.indd 67
Job number 10 December 2021 1:08 pm V0
10/12/2021 17:11:42
10/12/2021 17:11:42
CORPORATE GOVERNANCE REPORT
FY21 Key Findings and Actions
FY21 Board evaluation findings
Actions planned
Projects
We identified a need to build on recent
improvements in the way we review the effectiveness
of and learn from the outcomes of our major projects
and investments.
Board evaluation
We identified a need to have a better external
perspective in our Board evaluation process, with
better analysis and the capability to compare
ourselves vs our peer group.
Diversity and Inclusion
We identified a need to build on recent improvement
in our work on Diversity and Inclusion, to place more
emphasis on the whole senior management team
and on ethnic diversity.
We will review and strengthen the projects and investments review process.
We will review and strengthen the Board evaluation process.
We will review and strengthen the Board’s approach to ensuring diversity and
inclusion in the Board and senior management team.
1
Klarity™ Light Oak and Hartley™ White
2
Catania™ Violet
1
2
68
TOPPS TILES PLC ANNUAL REPORT AND ACCOUNTS FOR THE 53-WEEK PERIOD ENDED 2 OCTOBER 2021
30525-Topps-Tiles-AR2021-Governance.indd 68
30525-Topps-Tiles-AR2021-Governance.indd 68
Job number 10 December 2021 1:08 pm V0
10/12/2021 17:11:46
10/12/2021 17:11:46
Board Evaluation Process
STEP 1
Alistair Hodder, our Company Secretary, agrees on
the programme objectives and areas of focus with the
Board Chair and Committee Chairs. Questions are
benchmarked against the FRC Guidance to Board
Effectiveness, and Board members are consulted.
STEP 2
Board and Committee members complete the
questionnaires, with multi-choice questions and
comment boxes.
STEP 3
Alistair compiles the results and summarises the
comments, which are discussed with the relevant
Chair, together with proposed actions.
STEP 4
The results are presented to the Board and Committee
members, for discussion and agreement and the relevant
Chair follows up on the finding to agree on appropriate
actions.
1
O
u
r
G
o
v
e
r
n
a
n
c
e
1
Abrasio™ Steel
TOPPS TILES PLC ANNUAL REPORT AND ACCOUNTS FOR THE 53-WEEK PERIOD ENDED 2 OCTOBER 2021
69
30525-Topps-Tiles-AR2021-Governance.indd 69
30525-Topps-Tiles-AR2021-Governance.indd 69
Job number 10 December 2021 1:08 pm V0
10/12/2021 17:11:47
10/12/2021 17:11:47
DIRECTORS’ REPORT
The Directors of Topps Tiles Plc (the “Directors” or the “Board”)
present their Annual Report on the affairs of the Group (comprising
Topps Tiles Plc and its subsidiary companies) together with the
Financial Statements and Auditor’s Report, for the 53-week period
ended 2 October 2021(the “Period”). The Corporate Governance
Report forms part of this report.
Principal Activities
The principal activity of the Group is 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 period
ended 2 October 2021 and of the position of the Group at the end
of that period. The Company is also required to set out a description of
the principal risks and uncertainties facing the Group. This information
is in the Chairman’s Statement on page 04, the Strategic Report on
page 10, and the Corporate and Social Responsibility statement on
page 71, which form part of the Directors’ Report.
The future prospects of the Group are highlighted in both the
Chairman’s Statement and the Strategic Report.The Directors
monitor several financial and non-financial key performance
indicators for the Group. The most significant of these are detailed
on pages 26 and 27.
The Company conducts an annual strategic risk discussion with
the Chairman of the Audit Committee and senior managers, which
includes a wide range of risks including commercial, continuity,
environmental, social and governance risks.
Results and Dividends
The audited financial statements of the Group for the 53-week
period ended 2 October 2021 are set out on pages 100 to 135.
The Group’s profit for the period from continuing operations, after
taxation, was £10,904,000 (2020: loss of £8,018,000).
As a result of the challenges we have faced this year, we
announced at the interim stage that there would be no interim
dividend this year. Following careful consideration, and for
the reasons given in the Chairman’s Statement, the Board is
recommending the payment of a final dividend of 3.1 pence per
share, totalling £6,057,000 (2020: no dividend was paid).
Board of Directors
The Directors, who served
throughout the year, were
as follows:
D Shapland
Non-Executive Chairman
R Parker
Chief Executive
S Hopson
Chief Financial Officer
(appointed 2 November 2020)
K Down
Senior Independent
Non-Executive Director
A King
Non-Executive Director (stepped
down 20 January 2021)
D Breeze
Non-Executive Director
(appointed 1 February 2021)
K Daniels
Non-Executive Director
(appointed 1 April 2021)
C Tiney
Senior Independent
Non-Executive Director
(stepped down 16 June 2021)
Although not required by the Company’s Articles of Association,
in line with good Corporate Governance, all the Directors will all
retire voluntarily and offer themselves for re-election at the Annual
General Meeting in January 2022. For the Directors’ biographical
details, see pages 52 and 53.
The Board considers that the contribution of each of the Directors
standing for election is important to the Company’s long-
term sustainable success. For more on this, see the Corporate
Governance Report on pages 55 to 69.
Directors’ and Officers’ Insurance
The Company provides insurance against Directors’ and Officers’
liabilities to a maximum value of £15,000,000.
Articles of Association
The internal regulation of the Company is set out in its Articles
of Association. The Articles of Association can be amended by
a special resolution of the Company’s Shareholders. They cover
matters such as the rights of Shareholders, the appointment or
removal of Directors and the conduct of Board and general
meetings. Copies are available upon request and on the
Company’s website. In accordance with the Articles of Association,
Directors can be appointed or removed by the Board, or by
Shareholders in general meetings. 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.
The principal Board Committees are the Audit Committee, the
Nomination and Governance Committee and the Remuneration
Committee. Details of the work of these Committees can be found
in the Corporate Governance Report.
Voting at the Annual General Meeting
Given the uncertainty around whether Shareholders will be able to
attend the Annual General Meeting, this year the Board is again
encouraging Shareholders to vote online by proxy, appointing me,
as the Chair of the meeting, as their proxy regardless of whether
you plan to attend in person. This will ensure that your vote will be
counted even if attendance at the meeting is restricted or you are
unable to attend. Voting by proxy is a more transparent method of
voting as Shareholders’ votes are counted according to the number
of shares registered in their names, rather than according to the
votes of Shareholders who attend the Annual General Meeting.
Shareholders will be asked to consider and vote on the resolutions
set out in the Notice of Annual General Meeting. The results will
be published on our website www.toppstilesplc.com and they will
also be released to the London Stock Exchange via a Regulatory
Information Service. Please see the Notice of Annual General
Meeting and the notes on page 149 for information on when and
how to vote by proxy.
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 23 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 in a general meeting of the Company.
70
TOPPS TILES PLC ANNUAL REPORT AND ACCOUNTS FOR THE 53-WEEK PERIOD ENDED 2 OCTOBER 2021
30525-Topps-Tiles-AR2021-Governance.indd 70
30525-Topps-Tiles-AR2021-Governance.indd 70
Job number 10 December 2021 1:08 pm V0
10/12/2021 17:11:47
10/12/2021 17:11:47
The Company imposes no restrictions on the size of a holding or on
the transfer of shares, which are governed by the general provisions
of the Articles of Association and company law. 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
voting rights.
No person has any special rights of control over the Company’s
share capital. All issued shares are fully paid.
Substantial Shareholdings
In addition to the Directors’ shareholdings noted on page 80, as of
2 October 2021, 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.
Number
38,992,750
MS Galleon AG
21,469,861
Aberforth Partners LLP
18,093,950
Williams S K M Esq
19,213,670
AXA Investment Managers SA
Premier Miton Group plc
10,400,143
MI Chelverton UK Equity Growth Fund 10,000,000
9,790,934
Invesco Asset Management
9,591,601
Ninety One UK Limited
7,783,246
Standard Life
7,707,530
M&G Plc
% held
20.0
10.9
9.3
9.8
5.3
5.1
5.0
4.9
4.0
4.0
In accordance with Chapter 5 of the Disclosure Guidance and
Transparency Rules, between the end of the Period and the date of
the notice of the Annual General Meeting, we have been informed
on 12 October 2021, the holding of MS Galleon AG increased to
41,234,924 shares, 21.1%.
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 several
employees’ 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 10,367,859 (2020: 12,845,842).
As described in note 27, employee share purchase plans are open
to almost all employees and provide for employees to purchase
Ordinary Shares at a purchase price equal to the daily average
market price over the three days preceding the start of the offer
period, less 20%. The offer period fell between 11 and 25 January
2021 and the offer price to employees was 46.29 pence.
The Directors’ interests in the shares of the Company and details of
the Directors’ share options are given in the Directors’ Remuneration
Report on page 80.
Significant Agreements
The Group is a party to significant agreements, including
commercial contracts, financial and property agreements, and
employees’ share plans, which contain certain termination and
other rights for the counterparties in the event of a change of
control of the Company. Should any counterparties choose to
exercise their rights under such agreements on a change of control,
these arrangements may have to be renegotiated or replacement
suppliers, or premises, be found. None of these is considered
significant in terms of the likely impact on the business of the
Group as a whole. There are no agreements between any Group
company and any of its employees or a Director that 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 Corporate Social Responsibility statement, our
primary energy consumption is electricity used across our store
estate. Energy for in-store lighting is a significant source of carbon
emissions. We continue to invest in new technology, including low
energy lighting, to reduce our carbon emissions.
2021
2020
CO2
(Tonnes)
2,669
2,928
3,282
133
9,012
CO2
(Tonnes)/
Store
8.1
8.8
9.9
0.4
27.2
CO2
(Tonnes)
3,223
2,656
2,694
232
8,805
CO2
(Tonnes)/
Store
9.0
7.4
7.5
0.6
24.7
O
u
r
G
o
v
e
r
n
a
n
c
e
Electricity
Gas and oil
Commercial fleet
Company cars
Total
The above carbon emissions data covers the Period of this Annual
Report. It has been compiled from data from our energy suppliers
(based on the energy consumed multiplied by Environment Agency
approved emissions factors) and for vehicle emissions, from our
in-house transport team (based on mileage covered multiplied by
manufacturers’ published emissions data).
Charitable and Political Contributions
The Group has designated charitable partners; Macmillan Cancer
Support and Leicestershire Cares. Across the Group’s business,
colleagues engage in numerous fundraising activities, which are
documented in the Corporate Social Responsibility statement of this
report. During the period, the Group made no monetary charitable
donations and no political contributions.
Corporate Social Responsibility
The Company has a long-standing Corporate Social Responsibility
agenda covering Community, Charity, the Environment and Our
People. Details of our current Corporate Social Responsibility
activities are in the Corporate Social Responsibility statement.
We take the impact of our business on our environment extremely
seriously and have included a range of environmental metrics
above and we pay particular attention to labour standards and
factory conditions.
TOPPS TILES PLC ANNUAL REPORT AND ACCOUNTS FOR THE 53-WEEK PERIOD ENDED 2 OCTOBER 2021
71
30525-Topps-Tiles-AR2021-Governance.indd 71
30525-Topps-Tiles-AR2021-Governance.indd 71
Job number 10 December 2021 1:08 pm V0
10/12/2021 17:11:47
10/12/2021 17:11:47
DIRECTORS’ REPORT
Human Rights
All directly employed colleagues are based in the UK and covered
by UK employment law. The Modern Slavery Act 2015 came into
effect in 2015 and the Board is committed to ensuring that acts of
modern-day slavery and human trafficking do not occur in relation to
the Company, or its supply chain. For more on this, see page 62.
Diversity
The Nomination and Governance Committee reviews the balance
of skills, knowledge, and experience on the Board regularly. The
Board recognises the importance and benefits of diversity in our
organisation. We appoint on merit, against objective criteria
and with due regard for the benefits of diversity. As noted in the
Governance Report, this year diversity and inclusion continued to
be an area of focus and we are pleased that our Board is now one
third female.
Our workforce at the Period-end date comprises:
Directors
Senior managers
Other employees
Total employees
% of total
Male
4
12
1,254
1,270
75%
2021
Female
2
3
429
434
25%
Total
6
15
1,683
1,704
Male
5
10
1,374
1,389
74%
2020
Female
1
3
472
476
26%
Total
6
13
1,846
1,865
Equal Opportunities
The Board is committed to promoting equal opportunities and
ensuring that we hire on potential, promote talent and reward on
success. We aim to promote equality of opportunity in employment.
We welcome applications for employment from people of all
backgrounds, regardless of age, disability, gender reassignment,
marriage or civil partnership status, pregnancy, maternity,
race, religion or belief and sex. Should a colleague become
disabled, we aim to continue to support their training and career
development where we can do so, making reasonable adjustments.
Colleague Consultation
The Board values the views of employees and recognises the
importance of keeping employees informed of matters affecting
them and the Group. This is achieved through formal and informal
meetings, electronic announcements, the Company magazine
and “TeamTalk”, a Company-wide forum for colleagues to discuss
matters that affect them and the Company. Regular forums are held
at local and national levels to ensure that employee representatives
are consulted quarterly on matters affecting them.
Financial Risk Management, Objectives and Policies
The Group is exposed to interest rate risk, currency risk and credit
risk. Information regarding our approach to managing these risks
is contained in note 21 to the Financial Statements. The Group’s
approach to risk management is explained in the Strategic Report.
Employee and Stakeholder Engagement
The Company has several programmes of stakeholder engagement.
These are detailed in the Governance Report on page 55 and
Section 172 Statement on page 46.
Information Given to the Auditors
Each of the Directors at the date of approval of this Annual Report
confirms that:
• so far as they are aware, there is no relevant audit information
of which the Company’s Auditors are unaware; and
•
they have taken all the steps that they ought to have taken as a
Director in order to make themself aware of any relevant audit
information and to establish that the Company’s Auditors are
aware of that information.
This confirmation is given and should be interpreted in accordance
with the provisions of s418 of the Companies Act 2006.
Reappointment of the Company’s Auditors
A resolution to reappoint PricewaterhouseCoopers LLP as the
Company’s Auditors will be proposed at the forthcoming Annual
General Meeting.
72
TOPPS TILES PLC ANNUAL REPORT AND ACCOUNTS FOR THE 53-WEEK PERIOD ENDED 2 OCTOBER 2021
30525-Topps-Tiles-AR2021-Governance.indd 72
30525-Topps-Tiles-AR2021-Governance.indd 72
Job number 10 December 2021 1:08 pm V0
10/12/2021 17:11:48
10/12/2021 17:11:48
DIRECTORS’ RESPONSIBILITIES STATEMENT
Confirmation Statement
We confirm that to the best of our knowledge:
•
•
•
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 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.
On behalf of the Board
Rob Parker
Director
10 December 2021
O
u
r
G
o
v
e
r
n
a
n
c
e
The Directors are responsible for preparing the Annual Report and
the Financial Statements in accordance with applicable law and
regulation.
Company law requires the Directors to prepare financial statements
for each financial year. Under that law, the Directors have
prepared the Group financial statements in accordance with
International Financial Reporting Standards (“IFRSs”) as adopted
by the European Union and Company financial statements in
accordance with United Kingdom Generally Accepted Accounting
Practice (United Kingdom Accounting Standards, comprising FRS
101 “Reduced Disclosure Framework”, and applicable law).
Under company law, the Directors must not approve the financial
statements unless they are satisfied that they give a true and fair
view of the state of affairs of the Group and Company and of
the profit or loss of the Group and Company for that period. In
preparing the financial statements, the Directors are required to:
• select suitable accounting policies and then apply them
consistently;
• state whether applicable IFRSs as adopted by the European
Union have been followed for the Group financial statements,
and United Kingdom Accounting Standards, comprising
FRS 101, have been followed for the Company financial
statements, subject to any material departures disclosed and
explained in the financial statements;
• make judgements and accounting estimates that are reasonable
and prudent; and
• prepare the financial statements on the going concern basis
unless it is inappropriate to presume that the Group and
Company will continue in business.
The Directors are also responsible for safeguarding the assets of the
Group and Company and hence for taking reasonable steps for the
prevention and detection of fraud and other irregularities.
The Directors are responsible for keeping adequate accounting
records that are sufficient to show and explain the Group and
Company’s transactions and disclose with reasonable accuracy
at any time the financial position of the Group and Company
and enable them to ensure that the financial statements and the
Directors’ Remuneration Report comply with the Companies Act
2006 and, as regards the Group financial statements, Article 4 of
the IAS Regulation.
The Directors are responsible for the maintenance and integrity
of the Company’s website. Legislation in the United Kingdom
governing the preparation and dissemination of financial statements
may differ from legislation in other jurisdictions.
TOPPS TILES PLC ANNUAL REPORT AND ACCOUNTS FOR THE 53-WEEK PERIOD ENDED 2 OCTOBER 2021
73
30525-Topps-Tiles-AR2021-Governance.indd 73
30525-Topps-Tiles-AR2021-Governance.indd 73
Job number 10 December 2021 1:08 pm V0
10/12/2021 17:11:48
10/12/2021 17:11:48
Job number 10 December 2021 1:08 pm V0Remuneration CommitteeThe Committee held four scheduled meetings during the Period, based on an annual plan agreed with the Chair of the Committee. In addition, the Committee met to consider the impact of Covid-19 on remuneration.The Committee comprises three Independent Non-Executive Directors, Diana Breeze (Chair), Kari Daniels and Keith Down.Darren Shapland, Rob Parker and Linda Sleath attend by invitation and absent themselves from meetings when the Committee considers matters concerning their remuneration.Role and ResponsibilitiesThe role of the Remuneration Committee is set out in its Terms of Reference, which are available on the Group’s website. The Committee’s primary purpose is to develop and determine the Group’s remuneration policies for the Executive Directors, Chairman and senior management. For more on the role of the Committee, see below under ‘Consideration by the Directors of Matters Relating to Directors’ Remuneration’. The Committee also has responsibility for reviewing pay and conditions across the Group and the alignment of incentives and rewards with culture.Statement from the Chair of the Remuneration CommitteeDear ShareholderOn behalf of the Remuneration Committee, I am pleased to present the Directors’ Remuneration Report for the 53 weeks ended 2 October 2021 (the “Period”).This report has been prepared in accordance with the provisions of the Companies Act 2006 and Schedule 8 of the Large and Medium-sized Companies and Groups (Accounts and Reports) Regulations 2008 as amended, the UKLA Listing Rules and the 2018 UK Corporate Governance Code (the “Code”). The report is split into three parts:1. This annual statement, from the Chair of the Remuneration Committee.2. The annual Directors’ Remuneration Report, which sets out payments made to the Directors and details the link between Company performance and remuneration for the Period. The Chair’s statement and annual Remuneration Report (excluding the Directors’ Remuneration Policy) is subject to an advisory Shareholder vote at the AGM in January 2022. 3. The Directors’ Remuneration Policy (the “Policy”), which was approved by Shareholders in January 2020.Remuneration FrameworkOver the course of 2019, the Committee undertook a detailed review of the then current Policy to ensure it supported our remuneration principles, which are to:• attract and retain the best talent;• drive behaviours that support the Group’s Strategy and business objectives which are developed in the long-term interests of the Company and its Shareholders;• reward senior management appropriately for their personal and collective achievements;• provide incentives that help to maintain commitment over the longer term and align the interests of senior management with those of Shareholders; • ensure that a significant percentage of the overall package for the Executives and senior managers remains at risk dependent upon performance and that their pay and benefits adequately take account of reward versus risk; • ensure the overall remuneration structure is simple and clear, and that employees understand how their performance is linked to reward;• maintain appropriate proportions of fixed and performance-related pay, to help to drive performance over the short and longer term, maintain a flexible cost base, and avoid creating incentives for excessive risk taking; and• achieve consistency with the general remuneration philosophy applied to the Group’s employees as a whole.A number of small changes to reflect developing market best practice, the Code and investor expectations were approved by our Shareholders at the AGM in January 2020 with almost 99% of votes in favour. In line with best practice, we plan to review the Policy during 2022 and invite Shareholders to approve the Policy together with any proposed amendments, at the AGM in January 2023. On behalf of the Remuneration Committee, I am pleased to present the Directors’ Remuneration Report for the 53 weeks ended 2 October 2021.”Diana BreezeChair of the Remuneration CommitteeDIRECTORS’ REMUNERATION REPORT74TOPPS TILES PLC ANNUAL REPORT AND ACCOUNTS FOR THE 53-WEEK PERIOD ENDED 2 OCTOBER 202130525-Topps-Tiles-AR2021-Governance.indd 7430525-Topps-Tiles-AR2021-Governance.indd 7410/12/2021 17:11:5010/12/2021 17:11:50 Long-Term Incentive Plan
During FY22, the Committee intends to grant LTIPs to the Executive
Directors with a maximum opportunity of 100% of salary. These
levels are unchanged from previous years. Given the challenge
in setting targets for the LTIP in light of the ongoing economic
uncertainty around Covid-19, the Committee has determined that it
will again be appropriate for these awards, that the performance
condition will require target levels of EPS to be met at the end of the
performance period (i.e. 2023/24) rather than setting cumulative
EPS targets covering all three years. This change of practice was
introduced during 2020/21 and brought the approach in line
with that adopted by the vast majority of companies that set EPS
targets. In addition, the Committee has again determined that it will
be appropriate to set the threshold level of performance at 10% of
the LTIP awards, but with a higher Adjusted Profit threshold of £12
million. Full details of the performance targets are detailed on page
86. The Committee will monitor the performance over the three-year
vesting period and review the vesting outcome to ensure it is a true
reflection of the Company’s performance during the period and that
there is no windfall gain as a result of share price movement.
Committee Changes During the Period
As announced on 26 November 2020 and updated on 17 June
2021, Andy King stepped down on 20 January 2021, I joined
the Board and the Committee on 1 February 2021, Kari Daniels
joined the Board and the Committee on 1 April 2021, and on
16 June 2021, Claire Tiney stepped down from the Board and as
Chair of the Committee, and I succeeded her in that role.
Annual General Meeting
On behalf of the Committee, I would like to thank Shareholders
for their continued support. Arrangements for the Annual General
Meeting and how to ask questions are explained in the Notice of
Annual General Meeting. I will be pleased to any answer questions
proposed, concerning remuneration, and I am always pleased to
hear from the Company’s Shareholders. You can contact me via
the Company Secretary at other times, if you have any questions in
relation to the Company’s remuneration.
Diana Breeze
Chair of the Remuneration Committee
10 December 2021
O
u
r
G
o
v
e
r
n
a
n
c
e
Performance in FY21 and Remuneration Outcomes
As reported last year, given the ongoing Covid-19 pandemic
and the continued impact of local lockdowns, coupled with the
broader impact on the economy, for FY21 the Committee initially
only confirmed the annual bonus targets for the first half of the year.
Targets for the second half were subsequently confirmed, as the
outlook for the year became more certain.
No payments were made to the Executive Directors at the half year
point. The level of adjusted profit before tax to trigger payment of
a bonus was met. In view of this, and taking into account of the
resumption of dividend payments as announced on 10 December
2021, the Remuneration Committee considered it appropriate to
approve payment under the Annual Bonus Plan to the Executive
Directors at the end of the year of £220,000 to Rob Parker and
£106,563 to Stephen Hopson. This was based on, for H1, 5%
in respect of profit targets and 15% in respect of strategic targets
(total 20%) and for H2, 80% in respect of profit targets and 10% in
respect of strategic targets (total 90%) in each case a percentage
of the base salary earned over the applicable half-year period, as
reported in detail below under Annual Bonus.
Note: Stephen Hopson joined part way through the Period. His
payment for H1 was reduced pro-rata.
The Long-Term Incentive Plan (“LTIP”) awards granted in December
2018 were based upon performance over the three financial years
to September 2021. The awards required cumulative adjusted
earnings per share (“EPS”) over the period to be at least 22.04p
for 25% vesting, increasing to 23.76p for full vesting of the
awards. Actual cumulative EPS was 14.31p; therefore, the 2018
LTIP awards lapsed in full.
Remuneration Decisions for FY22
Salary/Fees
During the Period, the Committee reviewed the base salary level for
the CEO and CFO by reference to external benchmarks, facilitated
by its remuneration consultant. The Committee also considered the
remuneration of the wider workforce.
The Committee concluded that Executive Directors would generally
be awarded an increase in base salary from October 2021 of
3% in line with the wider workforce. Accordingly, the CEO’s salary
moved to £412,000. However, the benchmarking indicated
that the CFO’s salary was below the benchmark. Accordingly,
after noting that Stephen had made a strong start in his first year,
the Committee approved a phased increase in Stephen’s base
salary to £220,000 from 1 October 2021 and £240,000 from
1 October 2022 to bring his salary in line with the benchmark.
Annual Bonus
Given the continuing Covid-19 pandemic, which may have an
impact on the business’s ability to trade, coupled with the potential
impact it may still have on the economy, this year the Committee has
again only confirmed the targets for the first half of the year and will
confirm the targets for the second half once the outlook becomes
more certain. No payments will be made to Executive Directors
until the end of the year. The Committee will closely monitor the
situation through the year and reserves the right to make appropriate
adjustments to the targets. The strategic objectives for FY22 include
an ESG measure, based on increasing colleague engagement.
TOPPS TILES PLC ANNUAL REPORT AND ACCOUNTS FOR THE 53-WEEK PERIOD ENDED 2 OCTOBER 2021
75
30525-Topps-Tiles-AR2021-Governance.indd 75
30525-Topps-Tiles-AR2021-Governance.indd 75
Job number 10 December 2021 1:08 pm V0
10/12/2021 17:11:51
10/12/2021 17:11:51
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 53-week period ended 2 October 2021 and the
52-week period ended 26 September 2020.
2020/21
Executive Directors
R Parker, CEO, full year
S Hopson, CFO from
2 November 2020
Non-Executive Directors
D Shapland, full year
A King, to 20 January 2021
K Down, full year
C Tiney to 16 June 2021
D Breeze from 1 February
2021
K Daniels from 1 April 2021
2019/20
Executive Directors
R Parker
(for the full year as CFO
and then CEO)
M T M Williams
(as CEO to 29 November
2019)
Non-Executive Directors
D Shapland
A King
K Down
C Tiney
Salary and
fees
£’000
Benefits
£’000
Pension
£’000
408
187
132
15
49
34
30
22
31
15
1.5
–
–
–
–
–
23
9
–
–
–
–
–
–
Annual
bonus
£’000
220
107
–
–
–
–
–
–
LTIP
£’000
Other
£’000
Total
remuneration
£’000
Total fixed
remuneration
£’000
Total variable
remuneration
£’000
–
–
–
–
–
–
–
–
1
4
–
–
–
–
–
–
683
322
133.5
15
49
34
30
22
463
215
133.5
15
49
34
30
22
220
107
–
–
–
–
–
–
Salary and
fees
£’000
Benefits
£’000
Pension
£’000
Annual bonus
£’000
LTIP
£’000
Total
remuneration
£’000
Total fixed
remuneration
£’000
Total variable
remuneration
£’000
350
30
29
68
120
42
42
43
5
2
1
–
–
8
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
409
409
81
122
43
42
43
81
122
43
42
43
–
–
–
–
–
–
Note: for 2019/20, Rob Parker’s base salary and pension payments and the Non-Executive Directors fees were reduced by 20% for four months (April to July). As reported last
year, this was to align with the workforce subject to furlough.
Note: The figures for MTM Williams do not include payments between December 2019 and May 2020, after stepping down as a Director.
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 relevant period.
The taxable value of benefits received in the relevant 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 relevant period. The value attributable to Sharesave scheme options is calculated on the following basis: This represents
the total amount of the 20% discount applied to the SAYE grant made during the year: monthly contribution x 12 5 3 years 5
20%/80%. 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 Stephen Hopson as part of the
Company’s defined contribution scheme and the cash supplement taken in lieu of contributions to the pension plan in
respect of Rob Parker.
The annual bonus is the cash value of the bonus earned in respect of the period. A description of performance against
the objectives that applied for the relevant period is provided on page 78.
The LTIP figure for the period 2020/21 represents the awards granted in December 2018. The awards were based
on cumulative EPS performance over three financial years to 2 October 2021 and lapsed in full.
The LTIP figure for the period 2019/20 represents the awards granted in December 2017. The awards were based
on cumulative EPS performance over three financial years to 26 September 2020 and lapsed in full.
76
TOPPS TILES PLC ANNUAL REPORT AND ACCOUNTS FOR THE 53-WEEK PERIOD ENDED 2 OCTOBER 2021
30525-Topps-Tiles-AR2021-Governance.indd 76
30525-Topps-Tiles-AR2021-Governance.indd 76
Job number 10 December 2021 1:08 pm V0
10/12/2021 17:11:51
10/12/2021 17:11:51
Chief Executive Pay Ratio
The tables below compare the single total figure of remuneration for the Chief Executive with that of the Company’s employees who are
paid at the 25th percentile (lower quartile), 50th percentile (median) and 75th percentile (upper quartile) of its UK employee population,
giving the ratios and underlying remuneration levels at those percentiles that were used to calculate the ratios.
Year
FY21
FY20
Method
Option A
Option A
Salary
Total remuneration
25th percentile pay ratio
Median pay ratio
75th percentile pay ratio
36:1
23:1
25th percentile
£16,154.87
£19,194.99
32:1
21:1
50th percentile
£18,939.70
£21,343.76
23:1
16:1
75th percentile
£25,407.07
£29,365.05
The remuneration figures for the employee at each quartile were determined with reference to the financial year ended 2 October 2021
for FY21 (and for the financial year ended 26 September 2020 for FY20). The Company chose Option A as this provides the most
accurate method for calculating the CEO pay ratio. The increase in the percentage ratios is accounted for by the resumption in FY21 of
bonus payments to the CEO and wider management team and the lower ratio at the 75th percentile compared to the median and 25th
percentile, reflects the payment of bonus to management grade roles.
Individual Elements of Remuneration
(Audited Information)
Base Salary and Fees
Base salaries for individual Directors are reviewed annually by the Committee and the Committee considered the base salary levels by
reference to external benchmarks, facilitated by its remuneration consultant. In line with the Remuneration Policy, salaries are generally
increased in line with any increase awarded to the wider workforce, which was 3%, effective from 1 October. This was the case for Rob
Parker. However, the benchmarking indicated that the CFO’s salary was below the benchmark. Accordingly, after noting that Stephen had
made a strong start in his first year, the Committee approved a phased increase in Stephen’s base salary to £220,000 from 1 October
2021 and £240,000 from 1 October 2022 to bring his salary in line with the benchmark.
R Parker – CEO
S Hopson – CFO
Base salary 1 October 2020
Base salary 1 October 2021
£400,000
£200,000
£412,000
£220,000
% increase
3
10
During the Period, as part of the process for the appointment of two new NEDs, NEDs’ fees were reviewed in line with market
benchmarks. With effect from 1 February 2021, a small increase was applied to the base NED fee and the Committee Chair’s additional
fee, and the additional fees for the Senior Independent Director and Employee Engagement Director were set at half the level of the
Committee Chair’s additional fees. There was no change to Chairman’s fee.
The Non-Executive Directors’ fees are also reviewed annually and in line with the Director’s Remuneration Policy, they are generally
increased in line with any increase awarded to the wider workforce. Accordingly, an increase of 3% was applicable from 1 October
2021; however, this was applied to the base fees only.
Details of the current fee policy for the Non-Executive Directors are set out in the table below.
Fees 1 October 2020
Fees 1 February 2021
% increase
Fees 1 October 2021
% increase
Chairman’s fee
Non-Executive Directors’ basic fee
Additional fees
Senior Independent Director
Employee Engagement Director
Committee Chair
£129,254
£39,332
£129,254
£40,000
n/a
£5,493
£5,493
£3,000
£3,000
£6,000
–
1.7%
n/a
(55.5)
9.2
£133,132
£41,200
£3,000
£3,000
£6,000
3
3
–
–
–
Note: the Chairman waives the Committee Chair’s fee for the Nomination and Governance Committee.
Note: prior to 1 February, the Senior Independent Director’s additional fee had not been separated from other additional fees paid, therefore, the figure for Senior Independent
Director as of 1 October 2021 is not given.
Total Pension Entitlements
During the year, the Company pension benefit represented 5% of salary for the Executive Directors (taken as cash in lieu of contributions to
the pension plan in the case of the CEO).
O
u
r
G
o
v
e
r
n
a
n
c
e
TOPPS TILES PLC ANNUAL REPORT AND ACCOUNTS FOR THE 53-WEEK PERIOD ENDED 2 OCTOBER 2021
77
30525-Topps-Tiles-AR2021-Governance.indd 77
30525-Topps-Tiles-AR2021-Governance.indd 77
Job number 10 December 2021 1:08 pm V0
10/12/2021 17:11:51
10/12/2021 17:11:51
DIRECTORS’ REMUNERATION REPORT
Annual Bonus
For the Period, 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. Targets were split into H1 and H2
targets with payment based on a percentage of the base salary earned over the applicable half year period, as detailed below.
The following table sets out the bonus pay-out to the Executive Directors for 2020/21.
Weighting
Threshold
Stretch
Actual
performance
Executive Director
bonus earned as a
percentage of salary
H1
H1 Adjusted PBT
H1 Strategic objectives:
Customer satisfaction
Commercial sales (stretch target)
Group operating expenditure reduction (stretch target)
Delivery of new HR system
Total (as a % of base salary for H1)
H2
H2 Adjusted PBT
H2 Strategic objectives:
Customer satisfaction
Commercial sales (stretch target)
Group operating expenditure reduction (stretch target)
Tiles meterage sales
Total (as a % of base salary for H2)
80%
£4m
£10m
£5.1m
5%
5%
5%
5%
82.8%
–
–
n/a
90.0%
£1.32m
£1.0m
n/a
88%
£0.32m
£0.7m
Delivered
80%
£4m
£10m
£10.2m
5%
5%
5%
5%
85%
–
–
10%
92%
£1.79m
£1.5m
20%
89.9%
–
£0.4m
18.6%
5%
4%
2%
4%
5%
20%
80%
3
–
3
4
90%
Adjusted PBT as defined in the Financial Review section of this report.
The bonuses were paid in cash in November 2021. Note: Stephen Hopson joined part way through the Period. His payment for H1 was
reduced pro-rata to his base salary earned over H1.
Annual Bonus for FY22
The maximum annual bonus opportunity for FY22 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 FY22 are a mix of financial and non-financial measures, which act to bind the senior management
together to common objectives, based on improvements in various measures of sales performance and including an ESG measure, based
on increasing colleague engagement. As outlined in the Chair’s Annual Statement on page 04, for FY22, the Committee has finalised the
financial targets for first half of the year and will confirm those for the second half when the outlook becomes more certain. 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 Committee will continue to disclose how the bonus pay-out delivered relates to performance against the targets on a
retrospective basis.
Long-Term Incentives (Audited Information)
Awards Vesting in Respect of the Financial Year
The LTIP awards granted in December 2018 were based on cumulative adjusted EPS targets over the three financial years to
26 September 2021. The performance targets for the awards were as follows:
Cumulative Adjusted EPS for the period 2018/19 to 2020/21
Percentage of the award that will vest
22.04 pence
Greater than 22.04 pence but less than 23.76 pence
23.76 pence
25%
Determined on a straight-line basis between 25% and 100%
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 14.31 pence. This resulted in 0% of the award vesting.
78
TOPPS TILES PLC ANNUAL REPORT AND ACCOUNTS FOR THE 53-WEEK PERIOD ENDED 2 OCTOBER 2021
30525-Topps-Tiles-AR2021-Governance.indd 78
30525-Topps-Tiles-AR2021-Governance.indd 78
Job number 10 December 2021 1:08 pm V0
10/12/2021 17:11:51
10/12/2021 17:11:51
Awards Granted During the Financial Year
(Audited Information)
For the 53-week period ended 2 October 2021, the following awards were granted to Executive Directors in December 2020.
Type of award
Percentage of salary
Number of shares
Face value at grant1
R Parker
S Hopson
Nil-cost option
Nil-cost option
100%
100%
827,301
413,650
£400,000
£200,000
1. Valued using a share price of 48.35 pence based on the average three-day share price ending on 2 October 2020.
% of award vesting
at threshold
10%
10%
Performance
period
3 years
3 years
The vesting of these awards will be based on Adjusted EPS for the financial year 2022/23 (Adjusted EPS 2023):
Adjusted EPS 2023
3.16 pence
Greater than 3.16 pence but less than 7.89 pence
7.89 pence
Percentage of the award that will vest
10%
Determined between 10% and 100%
100%
These targets are based on PBT of between £8 and £20 million, excluding exceptional items and subject to such adjustments as the
Board in its discretion determines are fair and reasonable.
Notwithstanding the EPS 2023 target 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 EPS for 2023 achieved is not consistent with the Company’s overall 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.
Long-Term Incentives for FY22
LTIP Awards
The maximum LTIP opportunity will remain at 100% of salary; however, the proportion of the award vesting for threshold performance is set
at 10% of salary.
The vesting of these awards will be based on Adjusted EPS for the financial year 2023/24 (Adjusted EPS 2024):
The Remuneration Committee considers that the stretch target is challenging in the light of the growth environment and current business
expectation.
Adjusted EPS 2024
Percentage of the award that will vest
4.38 pence
Greater than 4.38 pence but less than 7.85 pence
7.85 pence
10%
Determined on a straight-line basis between 10% and 100%
100%
These targets are based on an Adjusted PBT of between £12 million and £21.5 million for the financial year 2023/24, excluding
exceptional items and subject to such adjustments as the Board in its discretion determines are fair and reasonable. The targets take
account of the planned increase in the rate of Corporation Tax to 25% from 19%, starting in 2023.
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.
Notwithstanding the EPS 2024 target 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 EPS for 2024 achieved is not consistent with the Company’s overall 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.
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 2 October 2021:
TOPPS TILES PLC ANNUAL REPORT AND ACCOUNTS FOR THE 53-WEEK PERIOD ENDED 2 OCTOBER 2021
79
O
u
r
G
o
v
e
r
n
a
n
c
e
30525-Topps-Tiles-AR2021-Governance.indd 79
30525-Topps-Tiles-AR2021-Governance.indd 79
Job number 10 December 2021 1:08 pm V0
10/12/2021 17:11:51
10/12/2021 17:11:51
DIRECTORS’ REMUNERATION REPORT
R Parker
S Hopson
Type of award1
Number of shares
Face value at grant2
3yr Discounted share option
3yr Discounted share option
7,776
38,880
£4,898
£24,494
1.
In accordance with the scheme rules, the options are granted with an exercise price set at a discount of 20% to the market value of a share when the invitations to acquire
the option are issued. For the awards granted in 2020/21, the share price at the date of invitation was 57.87 pence and the exercise price is 46.29p pence per share.
In accordance with the scheme rules, the exercise of the options is not subject to any performance condition.
2. 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 63 pence for these
options granted on 1 February 2021).
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 shareholding guidelines, effective from the 2017 AGM and revised effective from the 2020 AGM,
which required that Executive Directors build up a shareholding of 200% salary. The table below sets out the number of shares held or
potentially held (including by connected persons where relevant) as of 2 October 2021:
R Parker
S Hopson
Shareholding guidelines
Shareholding (as % of salary)
200%
200%
148%
12%
The interests of each Executive Director of the Company as of 2 October 2021 were as follows:
Shares
Options
Shares owned
(as at 26 Sept
2020)
Total shares
owned as of
2 October
2021
Options
exercised
during the year
Type
Vested options
Unvested
options, subject
to performance
conditions
Unvested
options, not
subject to
performance
conditions
Total options as
at 2 October
2021
Directors
Executive Directors
R Parker
S Hopson
Non-Executive Directors
D Shapland
K Down
D Breeze
K Daniels
502,893
n/a
n/a
–
n/a
n/a
140,000
n/a
n/a
n/a
552,893
n/a
n/a
–
n/a
n/a
200,000
n/a
n/a
n/a
LTIP
SAYE
LTIP
SAYE
–
n/a
–
n/a
n/a
n/a
n/a
n/a
616,063 1,831,113
n/a
n/a
n/a 2,447,176
40,542
40,542
–
n/a
n/a
n/a
n/a
n/a
413,650
n/a
n/a
38,880
413,650
38,880
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
Note: Directors’ shareholdings include shares held by their closely associated persons where relevant.
The following changes in the Directors’ shareholdings have occurred between 2 October 2021 and the date of this report:
Nil
Payments Made to Former Directors during the Period
(Audited Information)
No payments were made 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.
80
TOPPS TILES PLC ANNUAL REPORT AND ACCOUNTS FOR THE 53-WEEK PERIOD ENDED 2 OCTOBER 2021
30525-Topps-Tiles-AR2021-Governance.indd 80
30525-Topps-Tiles-AR2021-Governance.indd 80
Job number 10 December 2021 1:08 pm V0
10/12/2021 17:11:51
10/12/2021 17:11:51
Performance Graph
The graph below shows the TSR performance for the Company’s shares in comparison to the FTSE Small Cap Index for the ten years to
2 October 2021. For the purposes of the graph, TSR has been calculated as the percentage change during the ten-year period in the
market price of the shares, assuming that dividends are reinvested. The graph shows the value, by the end of the 2020/21 financial year,
of £100 invested in the Group over the last ten financial years compared with £100 invested in the FTSE Small Cap Index, which the
Directors believe is the most appropriate comparative index.
600
500
400
300
200
100
0
2011
2012
2013
2014
2015
2016
2017
2018
2019
2020
2021
TPT
FTSE Small Cap
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 ten financial years.
53-week period ended 2 October 2021
52-week period ended 26 September 2020
52-week period ended 28 September 2019
52-week period ended 29 September 2018
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
Total remuneration
£’000
Annual bonus as
a % of maximum
opportunity
LTIP as a %
of maximum
opportunity
683
403
541
538
765
1,180
2,027
849
564
579
55%
–
16%
14%
9%
67%
83%
99%
46.3%
35.2%
O
u
r
G
o
v
e
r
n
a
n
c
e
–
–
–
–
86.7%
100%
100%
n/a
n/a
n/a
Note: the figure for the period ended 26 September 2020 are aggregated for Rob Parker who succeeded Matthew Williams as CEO on 29 November 2019. Individually, their
total remuneration in the CEO role during the year ending 26 September 2020 was £81K (Matthew Williams) and £322K (Rob Parker).
Directors’ Pay Annual Change 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 all Directors
compared to the wider workforce. For these purposes, the wider workforce includes all employees in the Group.
Percentage change
Executive Directors
R Parker
S Hopson
Non-Executive Directors
D Shapland
K Down
D Breeze
K Daniels
Wider workforce
FY21 vs FY20
FY20 vs FY19
Salary
Taxable benefits
Annual bonus
Salary
Taxable benefits
Annual bonus
14.3%
n/a
7.5%
14.3%
n/a
n/a
19.4%
3.4%
n/a
(25)%
–
n/a
n/a
4.7%
n/a
n/a
n/a
n/a
n/a
n/a
89.1%
31.6%
n/a
(5.6)%
(4.6)%
n/a
n/a
(4.9)%
(11.2)%
n/a
(66.7)%
(100)%
n/a
n/a
12.8%
(100)%
n/a
n/a
n/a
n/a
n/a
(24.4)%
Note: for Darren Shapland, Rob Parker and Keith Down, the increase in FY21 compared to FY20, reflects a voluntary temporary reduction in salary for part of FY20 (April– July)
to align with members of the workforce subject to furlough. In addition, in FY20 Rob did not receive the CEO level salary for the full year (being appointed during the year). In
addition, Keith Down’s NED fees were increased during FY21 as noted and explained on page 77. For Stephen, Diana and Kari, as this is the first year of their appointment,
there is no comparative data.
TOPPS TILES PLC ANNUAL REPORT AND ACCOUNTS FOR THE 53-WEEK PERIOD ENDED 2 OCTOBER 2021
81
30525-Topps-Tiles-AR2021-Governance.indd 81
30525-Topps-Tiles-AR2021-Governance.indd 81
Job number 10 December 2021 1:08 pm V0
10/12/2021 17:11:52
10/12/2021 17:11:52
DIRECTORS’ REMUNERATION REPORT
Executive Directors’ Remuneration from External Non-Executive Roles
During the Period, neither Rob Parker nor Stephen Hopson received remuneration from Non-Executive roles.
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
53-week period ended
2 October 2021
3.1 pence per share
£57,955,000
52-week period ended
26 September 2020
0 pence per share
£49,638,000
Percentage change
n/a
16.75%
Note: the increase spend on pay reflects a resumption of bonus payments and National Living Wage increases.
Consideration by the Directors of Matters Relating to Directors’ Remuneration
The Committee is composed of the Company’s independent Non-Executive Directors, Diana Breeze (Chair), Keith Down and Kari Daniels. The
Company Secretary attends the meetings as secretary to the Committee. As noted in the Statement from the Chair of the Remuneration Committee,
Andy King stepped down on 20 January 2021, Diana Breeze joined the Board and the Committee on 1 February 2021, Kari Daniels joined the
Board and the Committee on 1 April 2021 and, on 16 June 2021, Claire Tiney stepped down from the Board and was succeeded as Chair of the
Committee by Diana Breeze (who has more than 12 months, experience as a member of the Remuneration Committee of HM Land Registry).
The role of the Committee is to:
• Set and keep under review the Remuneration Policy for the Executive Directors and Chairman;
• Determine the remuneration of the Executive Directors and Chairman, including short-term and long-term incentives, in line with the
Remuneration Policy;
• Recommend and monitor the level and structure of remuneration for senior management;
• Approve the design of and determine targets for performance-related pay schemes and approve the payments made under them;
• Review the design of all share incentive plans and for those in place and determine what awards will be made; and
• Oversee any major changes in employee benefits structures throughout the Company or Group.
Advisers
The Committee is assisted in its work by the CEO and CFO. The CEO is consulted on the remuneration of those who report directly to him
and of other senior management. No Executive Director or employee is present or takes part in discussions in respect of matters relating
directly to their own remuneration.
The executive compensation business of Aon plc (“Aon”) has acted as an independent adviser since March 2016. David Tuch, formerly
our principal adviser at Aon, moved to become a Managing Director at Alvarez & Marsal during the previous financial year and we have
continued to work with David following this change.
Adviser
Alvarez & Marsal
Details of appointment
Appointed by the Committee in
August 2020
Fees paid by the Company for advice to
the Committee and basis of charge
Other services provided to the Company
in the 53-week period ended
2 October 2021
£49,269 (excluding VAT)
Charged on a time/cost basis or
fixed fee dependent on the nature
of the project.
None
Alvarez & Marsal is a member of the Remuneration Consultants Group and adheres to its Code of Conduct. The Remuneration Committee
is therefore satisfied that the advice received from A&M 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 20 January 2021:
Resolution
Votes for
% of vote
Votes against
% of vote
Discretion
% of vote
Votes withheld
Approve Remuneration Report 149,428,977
98.2%
2,739,212
1.8%
0.0
0.0
15,031
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 22 January 2020:
Resolution
Approve Directors’
Remuneration Policy
Votes for
% of vote
Votes against
% of vote
Discretion
% of vote
Votes withheld
131,671,974
98.64%
1,716,113
1.29%
87,329
0.07%
43,952
82
TOPPS TILES PLC ANNUAL REPORT AND ACCOUNTS FOR THE 53-WEEK PERIOD ENDED 2 OCTOBER 2021
30525-Topps-Tiles-AR2021-Governance.indd 82
30525-Topps-Tiles-AR2021-Governance.indd 82
Job number 10 December 2021 1:08 pm V0
10/12/2021 17:11:52
10/12/2021 17:11:52
Directors’ Remuneration Policy
This part of the report sets out the Directors’ Remuneration Policy, which was approved by Shareholders at the Annual General Meeting on
22 January 2020 and remains in force for a three-year period from that date.
The Role of the Committee in Reviewing the Remuneration Policy
The Directors’ Remuneration Policy was approved by Shareholders at the AGM held in January 2020 (approximately 99% of votes
cast being in favour) and became effective from that date for a three-year period. The approved policy can be found in last year’s
annual report and on the Company’s website. The text set out below is included to assist with the understanding of the Annual Report on
Remuneration for the 53 weeks ended 2 October 2021. In addition, the scenario chart on page 86 has been updated to reflect current
remuneration levels. There are no proposals to amend the Directors’ Remuneration Policy at the 2022 AGM.
Executive Directors
Purpose and link to Strategy
Operation
Maximum opportunity
Performance measures
Not applicable.
Not applicable.
While there is no maximum salary,
increases will normally be no higher
than 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.
While 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.
O
u
r
G
o
v
e
r
n
a
n
c
e
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.
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.
TOPPS TILES PLC ANNUAL REPORT AND ACCOUNTS FOR THE 53-WEEK PERIOD ENDED 2 OCTOBER 2021
83
30525-Topps-Tiles-AR2021-Governance.indd 83
30525-Topps-Tiles-AR2021-Governance.indd 83
Job number 10 December 2021 1:08 pm V0
10/12/2021 17:11:52
10/12/2021 17:11:52
DIRECTORS’ REMUNERATION REPORT
Purpose and link to Strategy
Operation
Maximum opportunity
Performance measures
PENSIONS
Provides appropriate post-
employment benefits (or
cash equivalent).
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.
Contributions of up to the rate
available to the majority of the
workforce (currently 5% of salary).
Not applicable.
ALL EMPLOYEE SHARE SCHEMES
To create alignment with
the Group and promote a
sense of ownership.
Participation limits are those set by the
UK tax authorities from time to time.
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”) and any other HMRC-
approved plans that may be
introduced by the Company for
all employees.
The maximum bonus opportunity for
an Executive Director will not exceed
100% of salary.
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.
Not subject to performance
measures in line with HMRC
practice.
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.
84
TOPPS TILES PLC ANNUAL REPORT AND ACCOUNTS FOR THE 53-WEEK PERIOD ENDED 2 OCTOBER 2021
30525-Topps-Tiles-AR2021-Governance.indd 84
30525-Topps-Tiles-AR2021-Governance.indd 84
Job number 10 December 2021 1:08 pm V0
10/12/2021 17:11:52
10/12/2021 17:11:52
Purpose and link to Strategy
Operation
Maximum opportunity
Performance measures
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, such as 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 Quarter 4 trading
statement, unless the Committee
determines otherwise.
Relevant performance measures
are set that reflect business
performance. Specific disclosures
on the performance measures
that have been set in any given
year are provided in the relevant
Directors’ Remuneration Report for
that year.
The Committee retains discretion
to adjust the vesting outcome
of any LTIP award to reflect the
underlying financial performance
of the Company, notwithstanding
the extent to which the specific
performance targets applicable to
the award have been met.
Performance measures and
their weighting (where there is
more than one measure) are
reviewed annually to maintain
appropriateness and relevance.
For achievement of threshold, no
more than 10% of the maximum
opportunity will vest.
There will usually be straight-line
vesting between threshold and
maximum performance.
O
u
r
G
o
v
e
r
n
a
n
c
e
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.
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.
While there is no current
intention to do so, awards may
(technically) be settled in full or
in part in cash at the discretion
of the Committee (for example
in respect of shares that would
otherwise be sold to satisfy tax
withholding requirements or in
response to local law
constraints).
The vesting of awards will be
subject to the achievement of
specified performance conditions,
ordinarily measured over a
period of at least three years.
Dividend equivalents may be
paid on shares that vest in
connection with LTIP awards
by reference to the value of
dividends payable during the
award’s vesting period (and
holding period where relevant).
For awards granted from the
date of AGM in January 2020
onwards, a post-vesting holding
period will apply, which will
require Executives to ordinarily
retain any shares vesting (net of
tax) until the fifth anniversary of
grant.
Shareholding Requirement
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 Officer and the Chief Financial Officer.
Recovery and Withholding of Annual Bonuses and LTIP Awards
The Committee has the right to reduce, cancel or impose further conditions on unvested or unexercised LTIP awards, or to claw back
amounts from participants within a period of two years following the vesting of any LTIP 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. In respect of LTIP awards granted from the date of the AGM in
January 2020 onwards, clawback may also apply in instances of corporate failure, discovery of serious misconduct and/or error of
calculation. For up to two years following the payment of any annual bonus, the Committee may require the repayment of some or all of
the annual bonus 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.
TOPPS TILES PLC ANNUAL REPORT AND ACCOUNTS FOR THE 53-WEEK PERIOD ENDED 2 OCTOBER 2021
85
30525-Topps-Tiles-AR2021-Governance.indd 85
30525-Topps-Tiles-AR2021-Governance.indd 85
Job number 10 December 2021 1:08 pm V0
10/12/2021 17:11:52
10/12/2021 17:11:52
DIRECTORS’ REMUNERATION REPORT
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.
Bonuses are currently based on adjusted profit before tax and
strategic targets. The Committee considers that profit before tax is a
key performance metric for the annual bonus and specific strategic
objectives – which are aligned to delivering the overall business
strategy and encourage behaviours, which facilitate profitable
growth and the future development of the business – are also
included.
Illustrations of Application of Remuneration Policy for 2021/22
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 while not encouraging excessive risk-taking. LTIP
awards are currently based on challenging cumulative earnings
per share targets, providing an assessment of the overall financial
performance of the business and rewarding sustainable long-term
performance.
The Committee retains the ability to adjust the targets 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 original measures or targets 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 scheme.
R Parker
)
0
0
0
£
’
(
n
o
i
t
a
r
e
n
u
m
e
r
l
t
a
o
T
2,000
1,800
1,600
1,400
1,200
1,000
800
600
400
200
0
£1,493k
£1,287k
£875k
24%
24%
52%
32%
32%
36%
£463k
100%
41%
28%
31%
S Hopson
)
0
0
0
£
’
(
n
o
i
t
a
r
e
n
u
m
e
r
l
t
a
o
T
1,500
1,300
1,100
900
700
500
300
100
0
£247k
100%
£467k
24%
24%
52%
£687k
32%
32%
36%
£797k
41%
28%
31%
Minimum
Performance
Performance
in line with
expectations
Maximum
Performance
Max +50%
share price
Minimum
Performance
Performance
in line with
expectations
Maximum
Performance
Max +50%
share price
Base salary, benefits, pensions
Annual bonus
LTIP
In illustrating the potential reward, assumptions have been made as detailed below.
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 of 1 October 2021),
benefits as disclosed in the
single figure table on page 76
for the year 2020/21 and
pension of 5% of salary.
No bonus.
50% of salary awarded for
achieving target performance.
100% of salary awarded for
achieving maximum performance.
Maximum performance plus
share price growth
100% of salary awarded for
achieving maximum performance.
No LTIP vesting.
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.*
100% of maximum award
vesting for achieving maximum
performance plus an assumption
for share price growth (50%
increase).
* LTIP awards are included in these scenarios at face value with no share price movement included.
86
TOPPS TILES PLC ANNUAL REPORT AND ACCOUNTS FOR THE 53-WEEK PERIOD ENDED 2 OCTOBER 2021
30525-Topps-Tiles-AR2021-Governance.indd 86
30525-Topps-Tiles-AR2021-Governance.indd 86
Job number 10 December 2021 1:08 pm V0
10/12/2021 17:11:53
10/12/2021 17:11:53
Non-Executive Directors
Purpose and link to Strategy
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,
chairing the Board Committees, holding the office of Senior Independent Director, other
additional responsibilities or temporary increase in time commitment). 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 incentive
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.
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 appointing 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
that 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.
• Benefits will be provided in line with the above Policy.
The pension contribution (or cash allowance in lieu thereof) will be
set in line with the maximum rate provided to other below Board
employees (which is currently 5%).
Other 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; and
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 and
may include sums to cover the tax payable thereon.
O
u
r
G
o
v
e
r
n
a
n
c
e
The Committee may also alter the performance measures,
performance period and vesting period of the annual bonus, 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 that may be granted
(excluding “buyout” awards as referred to below) is 200% of salary.
The Committee may make payments or awards in respect of
appointing an employee to “Buy out” 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.
TOPPS TILES PLC ANNUAL REPORT AND ACCOUNTS FOR THE 53-WEEK PERIOD ENDED 2 OCTOBER 2021
87
30525-Topps-Tiles-AR2021-Governance.indd 87
30525-Topps-Tiles-AR2021-Governance.indd 87
Job number 10 December 2021 1:08 pm V0
10/12/2021 17:11:53
10/12/2021 17:11:53
DIRECTORS’ REMUNERATION REPORT
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, buyout 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.
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 Chair or Non-Executive Director will be in line
with the fee policy in place at the time of appointment.
Service Contracts
It is the Company’s policy that Executive Directors are offered
permanent contracts of employment with a 12-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:
Policy
Payment in lieu
of notice
Annual bonus
LTIP
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 and pension 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).
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 their employer or any other reason at the discretion of the Committee, any unvested
awards will continue to be capable of vesting at the normal vesting date (or, exceptionally and at the Committee’s
discretion, at cessation). 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,
subject to prorating by reference to the period of time elapsed from the start of the performance period to the date
of cessation relative to the full performance period (although the Committee may disapply (in full or in part) time
prorating if it considers it appropriate to do so). Where the Committee determines that awards shall vest at the
date of cessation, performance shall be assessed on such basis as the Committee considers appropriate over the
curtailed performance period.
Once vested, awards held by leavers may then be exercised during such period as the Committee determines.
The post-vesting holding period for LTIP awards granted from the date of the AGM in January 2020 onwards will
continue to apply irrespective of employment status unless the Committee, in exceptional circumstances, determines
otherwise.
Awards that have already vested at the date of cessation may be exercised for such period as the Committee determines.
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.
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.
LTIP awards granted after the AGM in January 2020 will be subject to their applicable post-vesting holding period
and awards (if any) retained on departure will not ordinarily be accelerated.
Shares purchased by the Executives through their own funds (or which have been acquired through the vesting
of earlier LTIP grants) will not be subject to a post-cessation shareholding requirement.
Mitigation
All employee
share plans
Post-cessation
shareholding
requirements
88
TOPPS TILES PLC ANNUAL REPORT AND ACCOUNTS FOR THE 53-WEEK PERIOD ENDED 2 OCTOBER 2021
30525-Topps-Tiles-AR2021-Governance.indd 88
30525-Topps-Tiles-AR2021-Governance.indd 88
Job number 10 December 2021 1:08 pm V0
10/12/2021 17:11:53
10/12/2021 17:11:53
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 contractual, statutory or 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. Where
applicable, the Committee may impose additional conditions on
the vesting or exercise of incentive awards as appropriate taking
into account the circumstances of the Executive’s departure.
There is no entitlement to any compensation in the event of a
Non-Executive Director’s appointment being terminated.
Treatment on a Change of Control or Other Corporate Events
The extent to which unvested LTIP awards will vest on a change of
control or other corporate events will be determined in accordance
with the rules of the LTIP scheme.
LTIP awards will vest early on a takeover, merger, winding-up
or other relevant corporate event. The Committee will determine
the level of vesting taking into account the extent to which the
performance conditions are satisfied over the curtailed performance
period (on such basis as the Committee determines appropriate)
and, unless the Committee determines otherwise, time pro rating to
reflect the period of time elapsed from the start of the performance
period to the date of the relevant corporate event relative to the full
performance period.
Alternatively, the Committee may provide that LTIP awards shall be
automatically exchanged for new awards over shares in another
company (for example, an award over shares in the new holding
company following an internal reorganisation).
The Committee may adjust the number of shares under any LTIP
award, or the performance conditions applicable to such awards,
in the event of a variation in the share capital of the Company or
on the occurrence of any other events (such as a demerger or rights
issues) that impact the Company’s share price.
A full or pro rata time-based bonus may be awarded on a change
of control, and this may be paid either at the time of the change of
control or on the normal payment date.
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;
• benefit and pension policies;
• overall spend on annual bonus; and
• participation levels in the annual bonus and share plans.
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.
Statement of Consideration of Shareholder Views
The Committee is committed to an ongoing dialogue with
Shareholders and welcomes feedback on Directors’ remuneration.
Prior to the current Policy being formally put to Shareholders at
the AGM in January 2020, the Committee engaged with major
Shareholders and institutional bodies setting out the proposals and
rationale for the changes.
Approval
This report was approved by the Board on 10 December 2021
and signed on its behalf by:
Diana Breeze
Chair of the Remuneration Committee
10 December 2021
O
u
r
G
o
v
e
r
n
a
n
c
e
TOPPS TILES PLC ANNUAL REPORT AND ACCOUNTS FOR THE 53-WEEK PERIOD ENDED 2 OCTOBER 2021
89
30525-Topps-Tiles-AR2021-Governance.indd 89
30525-Topps-Tiles-AR2021-Governance.indd 89
Job number 10 December 2021 1:08 pm V0
10/12/2021 17:11:53
10/12/2021 17:11:53
OUR
FINANCIALS
30525-Topps-Tiles-AR2021-Financials.indd 90
30525-Topps-Tiles-AR2021-Financials.indd 90
Job number 10 December 2021 5:09 pm V5
10/12/2021 17:09:53
10/12/2021 17:09:53
1
CONTENTS
Group Financial Statements
Independent Auditor’s Report
92
Consolidated Statement of Financial Performance
Consolidated Statement of Comprehensive Income 100
101
Consolidated Statement of Financial Position
100
Consolidated Statement of Changes in Equity
Consolidated Cash Flow Statement
Notes to the Financial Statements
Company Financial Statements
Company Balance Sheet
Company Statement of Changes in Equity
Notes to the Company Financial Statements
102
103
104
136
137
138
O
u
r
F
i
n
a
n
c
i
a
l
s
1
Harrods Luxury Rooms (Strata)
30525-Topps-Tiles-AR2021-Financials.indd 91
30525-Topps-Tiles-AR2021-Financials.indd 91
Job number 10 December 2021 5:09 pm V5
10/12/2021 17:09:53
10/12/2021 17:09:53
INDEPENDENT AUDITOR’S REPORT
TO THE MEMBERS OF TOPPS TILES PLC
REPORT ON THE AUDIT OF THE FINANCIAL STATEMENTS
Opinion
In our opinion:
• Topps Tiles Plc’s group financial statements and company financial statements (the “financial statements”) give a true and fair view of
the state of the group’s and of the company’s affairs as at 2 October 2021 and of the group’s profit and the group’s cash flows for the
53 week period then ended;
•
•
the group financial statements have been properly prepared in accordance with international accounting standards in conformity with
the requirements of the Companies Act 2006;
the company financial statements have been properly prepared in accordance with United Kingdom Generally Accepted Accounting
Practice (United Kingdom Accounting Standards, comprising FRS 101 “Reduced Disclosure Framework”, and applicable law); and
•
the financial statements have been prepared in accordance with the requirements of the Companies Act 2006.
We have audited the financial statements, included within the Annual report and accounts (the “Annual Report”), which comprise:
Consolidated statement of financial position and company balance sheet as at 2 October 2021; consolidated statement of financial
performance, consolidated statement of comprehensive income, consolidated statement of changes in equity, consolidated cash flow
statement and company statement of changes in equity for the period then ended; and the notes to the financial statements, which include
a description of the significant accounting policies.
Our opinion is consistent with our reporting to the Audit Committee.
Separate opinion in relation to international financial reporting standards adopted
pursuant to Regulation (EC) No 1606/2002 as it applies in the European Union
As explained in note 2 A) to the financial statements, the group, in addition to applying international accounting standards in conformity
with the requirements of the Companies Act 2006, has also applied international financial reporting standards adopted pursuant to
Regulation (EC) No 1606/2002 as it applies in the European Union.
In our opinion, the group financial statements have been properly prepared in accordance with international financial reporting standards
adopted pursuant to Regulation (EC) No 1606/2002 as it applies in the European Union.
Basis for opinion
We conducted our audit in accordance with International Standards on Auditing (UK) (“ISAs (UK)”) and applicable law. Our
responsibilities under ISAs (UK) are further described in the Auditors’ responsibilities for the audit of the financial statements section of our
report. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.
Independence
We remained independent of the group in accordance with the ethical requirements that are relevant to our audit of the financial
statements in the UK, which includes the FRC’s Ethical Standard, as applicable to listed public interest entities, and we have fulfilled our
other ethical responsibilities in accordance with these requirements.
To the best of our knowledge and belief, we declare that non-audit services prohibited by the FRC’s Ethical Standard were not provided.
We have provided no non-audit services to the company or its controlled undertakings in the period under audit.
92
TOPPS TILES PLC ANNUAL REPORT AND ACCOUNTS FOR THE 53-WEEK PERIOD ENDED 2 OCTOBER 2021
30525-Topps-Tiles-AR2021-Financials.indd 92
30525-Topps-Tiles-AR2021-Financials.indd 92
Job number 10 December 2021 5:09 pm V5
10/12/2021 17:09:53
10/12/2021 17:09:53
Our audit approach
Overview
Audit scope
• We conducted a full scope audit over Topps Tiles UK as the main trading entity within the group
• Where other entities contributed to a greater than 10% total of the financial statement line items, these balances were selected
to be in-scope
• All audit testing has been performed by the UK Group Engagement Team and with the same members of Topps Tiles management
• Our scoping resulted in coverage of 96% of revenue, and 96% of total assets
Key audit matters
•
Inventory carrying value (group)
• Modifications to lease agreements (group)
• Recoverability of the company’s investments in subsidiary undertakings (parent)
Materiality
• Overall group materiality: £680,000 (2020: £455,000) based on 5% of profit before tax.
• Overall company materiality: £620,000 (2020: £410,000) based on 1% of total assets.
• Performance materiality: £510,000 (group) and £465,000 (company).
The scope of our audit
As part of designing our audit, we determined materiality and assessed the risks of material misstatement in the financial statements.
Key audit matters
Key audit matters are those matters that, in the auditors’ professional judgement, were of most significance in the 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) identified
by the auditors, including 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, and any comments we make on the results of our procedures thereon, 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.
This is not a complete list of all risks identified by our audit.
Recoverability of the company’s investments in subsidiary undertakings is a new key audit matter this year. Impact of covid-19, which was a
key audit matter last year, is no longer included because of the reduced impact on the financial statements in the current year. Otherwise, the
key audit matters below are consistent with last year.
O
u
r
F
i
n
a
n
c
i
a
l
s
TOPPS TILES PLC ANNUAL REPORT AND ACCOUNTS FOR THE 53-WEEK PERIOD ENDED 2 OCTOBER 2021
93
30525-Topps-Tiles-AR2021-Financials.indd 93
30525-Topps-Tiles-AR2021-Financials.indd 93
Job number 10 December 2021 5:09 pm V5
10/12/2021 17:09:54
10/12/2021 17:09:54
INDEPENDENT AUDITOR’S REPORT
TO THE MEMBERS OF TOPPS TILES PLC
REPORT ON THE AUDIT OF THE FINANCIAL STATEMENTS
Key audit matter
How our audit addressed the key audit matter
Inventory carrying value (group)
Refer to matters considered by the Audit Committee within the
Corporate Governance Report on page 65 and the Critical
Accounting Judgements and Key Sources of Estimation Uncertainty
within the Group Accounting Policies.
The valuation of inventory involves estimate in recording provisions
for stock losses or obsolete inventory. The significant judgements
and assumptions as applied when calculating the provisions are:
•
•
•
•
the unidentified stock losses (shrinkage) at a store level;
slow moving stock, i.e. stock which has not been sold within
the last 13 months;
specific provisions recognised for stock classified as ‘to be
discontinued’ ie stock which is expected to be discontinued in
future periods and therefore require an estimate of expected
inventory write downs and realisable amounts; and
specific provisions recognised for stock classified as
‘discontinued’ inventory which require an estimate of expected
inventory write downs and realisable amounts.
Modifications to lease agreements (group)
Refer to matters considered by the Audit Committee within the
Corporate Governance Report on page 65 and the Critical
Accounting Judgements and Key Sources of Estimation Uncertainty
within the Group Accounting Policies.
The Group adopted IFRS 16 from 29 September 2019 utilising
the modified retrospective approach and so the prior year included
the first set of financial statements under this standard.
During the current year there has been a substantial number of
modifications made to existing leases resulting in a high number
of additions and disposals of leases and right of use assets.
Management have made certain estimates and judgements
including the assessment of lease term and discount rate applied
to the leases.
Recoverability of the company’s investments in subsidiary
undertakings (parent)
Refer to page 142 - Note 4 Investments.
Investments are tested for impairment if impairment indicators exist.
If such indicators exist, the recoverable amounts of the investments
in subsidiaries are estimated in order to determine the extent of the
impairment loss, if any.
Any such impairment loss is recognised in the income statement.
Judgement is required in this area, particularly in assessing:
(1) whether an event has occurred that may indicate that the
related asset values may not be recoverable;
(2) whether the carrying value of an asset can be supported by
the recoverable value, being the higher of fair value less cost of
disposal or the net present value of future cash flows which are
estimated based on the continued use of the asset in the business.
We examined inventory write-offs in the financial period to ensure they are consistent
with the key assumptions used in the inventory provision model at the year-end;
We tested the integrity of the provision model to ensure that it was using the
underlying data correctly and calculating provision amounts accurately;
We challenged the provision levels applied to ‘to be discontinued’ stock and verified
this to movements in the year;
We challenged management’s assumptions on identification of ‘discontinued’
inventory lines and corroborated that suppliers had been notified by the buying
team. We also independently challenged the completeness of the ‘at risk’ lines
based on our understanding of the nature of the group’s inventory; and
We tested the unsold report for stock lines not sold in the last 13 months and
performed a reasonableness check of the aged balance compared to the inventory
provision.
Misstatements identified from our work were largely corrected by management
leaving an immaterial uncorrected position. Overall we concluded that the key
estimates and judgements used by management to assess inventory carrying value
were supportable and no material exceptions arose from our work.
We have tested the completeness of management’s model by comparing the leases
to the listing maintained by the property team and also by performing testing over
the rent expense books and records to ensure modifications have been adequately
captured;
We have reviewed the accuracy of the underlying data by tracing a sample of
leases back to underlying lease agreements;
We have recalculated the accounting entries for a sample of leases and confirmed
management’s IT system is performing this calculation accurately;
We have considered other assumptions used by management to be appropriate,
including ensuring the leases meet the definition of a lease under IFRS 16 and that
the lease term is accurate; and
We have reviewed the disclosures in the financial statements, and we are satisfied
that they are consistent with the evidence obtained and compliant with IFRS 16.
Misstatements identified from our work were largely corrected by management
leaving an immaterial uncorrected position. Overall we concluded that the key
estimates and judgements used by management for lease liabilities and right of use
assets were supportable and material exceptions arising from our work have been
corrected.
We evaluated management’s determination of whether any indicators of impairment
existed by comparing the carrying value of investments in subsidiary undertakings
to the market capitalisation of the group at the period end date and post year-end
and by comparing the performance of the group in the year to previous budgets and
agreed that no impairment assessment is necessary.
We agreed the net assets of the underlying indirect investments, net of all
intercompany balances, to their respective statutory financial statements.
As the net asset value described above was sufficient to support the carrying value
of the investment, no impairment charge was required.
94
TOPPS TILES PLC ANNUAL REPORT AND ACCOUNTS FOR THE 53-WEEK PERIOD ENDED 2 OCTOBER 2021
30525-Topps-Tiles-AR2021-Financials.indd 94
30525-Topps-Tiles-AR2021-Financials.indd 94
Job number 10 December 2021 5:09 pm V5
10/12/2021 17:09:54
10/12/2021 17:09:54
How we tailored the audit scope
We tailored the scope of our audit to ensure that we performed enough work to be able to give an opinion on the financial statements as
a whole, taking into account the structure of the group and the company, the accounting processes and controls, and the industry in which
they operate.
The Group is structured with one segment. The Group financial statements are a consolidation of fourteen legal entities within this segment,
comprising the Group’s operating business and centralised business functions.
In establishing the overall approach to the Group audit, we identified one legal entity: Topps Tiles UK Limited, which, as the main trading
legal entity in the Group, required an audit of its complete financial information due to its financial significance to the Group.
Further specific audit procedures over central functions including the Group consolidation, share based payments, application of IFRS 16,
equity and taxes were performed.
All audit procedures were performed by the Group Engagement Team. The scoping above gave us the evidence we needed for our
opinion on the Group financial statements as a whole.
The parent company is comprised of one legal entity which was subject to a full scope audit for the purposes of the Parent Company
financial statements.
Materiality
The scope of our audit was influenced by our application of materiality. We set certain quantitative thresholds for materiality. These,
together with qualitative considerations, helped us to determine the scope of our audit and the nature, timing and extent of our audit
procedures on the individual financial statement line items and disclosures and in evaluating the effect of misstatements, both individually
and in aggregate on the financial statements as a whole.
Based on our professional judgement, we determined materiality for the financial statements as a whole as follows:
Financial statements – group
Financial statements – company
Overall materiality
£680,000 (2020: £455,000).
£620,000 (2020: £410,000).
How we
determined it
Rationale for
benchmark applied
5% of profit before tax
1% of total assets
Based on the benchmarks used in the
annual report, profit before tax is the
primary measure used by the shareholders
in assessing the performance of the group,
and is a generally accepted auditing
benchmark.
As the company does not trade, with its main operations being that
of a holding company, we believe that total assets is the primary
measure used by the shareholders in assessing the performance
of the entity,and is a generally accepted auditing benchmark.
Materiality level has been capped at the 90% of the group
materiality.
For each component in the scope of our group audit, we allocated a materiality that is less than our overall group materiality. The materiality
allocated across components was £465,000. Certain components were audited to a local statutory audit materiality that was also less than
our overall group materiality.
We use performance materiality to reduce to an appropriately low level the probability that the aggregate of uncorrected and undetected
misstatements exceeds overall materiality. Specifically, we use performance materiality in determining the scope of our audit and the nature
and extent of our testing of account balances, classes of transactions and disclosures, for example in determining sample sizes.
Our performance materiality was 75% of overall materiality, amounting to £510,000 for the group financial statements and £465,000 for
the company financial statements.
O
u
r
F
i
n
a
n
c
i
a
l
s
In determining the performance materiality, we considered a number of factors - the history of misstatements, risk assessment and aggregation
risk and the effectiveness of controls - and concluded that an amount at the upper end of our normal range was appropriate.
We agreed with the Audit Committee that we would report to them misstatements identified during our audit above £34,400 (group audit)
(2020: £22,750) and £34,400 (company audit) (2020: £20,000) as well as misstatements below those amounts that, in our view,
warranted reporting for qualitative reasons.
TOPPS TILES PLC ANNUAL REPORT AND ACCOUNTS FOR THE 53-WEEK PERIOD ENDED 2 OCTOBER 2021
95
30525-Topps-Tiles-AR2021-Financials.indd 95
30525-Topps-Tiles-AR2021-Financials.indd 95
Job number 10 December 2021 5:09 pm V5
10/12/2021 17:09:54
10/12/2021 17:09:54
INDEPENDENT AUDITOR’S REPORT
TO THE MEMBERS OF TOPPS TILES PLC
REPORT ON THE AUDIT OF THE FINANCIAL STATEMENTS
Conclusions relating to going concern
Our evaluation of the directors’ assessment of the group’s and the company’s ability to continue to adopt the going concern basis of
accounting included:
• We have evaluated management’s base case and a “severe but plausible” downside scenario going concern model, challenged
key assumptions included within the forecasted cash flows and assessed the appropriateness of the severity applied;
• We have agreed underlying assumptions to supporting data or market evidence and checked the integrity of managements model
by agreeing key underlying data to source documents and validating the group and company’s continuing liquidity;
• We have performed a full review and recalculaton of all debt covenants to ensure that these will not be breached during
the forecast period;
• We have provided a challenge to management, in relation to forecast growth rates within the forecasts in particular
the commercial market;
• We have understood the other potential cost saving/cash-preserving options which are available to management to utilise,
should they be required; and
• We have reviewed the disclosure included within the financial statements to verify that this provides adequate detail of the
scenarios considered and draws out the conclusions in order to support the use of the going concern basis
Based on the work we have performed, we have not identified any material uncertainties relating to events or conditions that, individually
or collectively, may cast significant doubt on the group’s and the company’s ability to continue as a going concern for a period of at least
twelve months from when the financial statements are authorised for issue.
In auditing the financial statements, we have concluded that the directors’ use of the going concern basis of accounting in the preparation
of the financial statements is appropriate.
However, because not all future events or conditions can be predicted, this conclusion is not a guarantee as to the group’s and the
company’s ability to continue as a going concern.
In relation to the directors’ reporting on how they have applied the UK Corporate Governance Code, we have nothing material to add or
draw attention to in relation to the directors’ statement in the financial statements about whether the directors considered it appropriate to
adopt the going concern basis of accounting.
Our responsibilities and the responsibilities of the directors with respect to going concern are described in the relevant sections of this
report.
Reporting on other information
The other information comprises all of the information in the Annual Report other than the financial statements and our auditors’ report
thereon. The directors are responsible for the other information. Our opinion on the financial statements does not cover the other
information and, accordingly, we do not express an audit opinion or, except to the extent otherwise explicitly stated in this report, any form
of assurance 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 an apparent material inconsistency or material misstatement, we are required to perform
procedures to conclude whether there is a material misstatement of 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. We have nothing to report based on these responsibilities.
With respect to the Strategic report and Directors’ Report, we also considered whether the disclosures required by the UK Companies Act
2006 have been included.
Based on our work undertaken in the course of the audit, the Companies Act 2006 requires us also to report certain opinions and matters
as described below.
Strategic report and Directors’ Report
In our opinion, based on the work undertaken in the course of the audit, the information given in the Strategic report and Directors’ Report
for the period ended 2 October 2021 is consistent with the financial statements and has been prepared in accordance with applicable
legal requirements.
In light of the knowledge and understanding of the group and company and their environment obtained in the course of the audit, we did
not identify any material misstatements in the Strategic report and Directors’ Report.
Directors’ Remuneration
In our opinion, the part of the Directors’ Remuneration Report to be audited has been properly prepared in accordance with the
Companies Act 2006.
96
TOPPS TILES PLC ANNUAL REPORT AND ACCOUNTS FOR THE 53-WEEK PERIOD ENDED 2 OCTOBER 2021
30525-Topps-Tiles-AR2021-Financials.indd 96
30525-Topps-Tiles-AR2021-Financials.indd 96
Job number 10 December 2021 5:09 pm V5
10/12/2021 17:09:54
10/12/2021 17:09:54
Corporate governance statement
The Listing Rules require us to review the directors’ statements in relation to going concern, longer-term viability and that part of the
corporate governance statement relating to the company’s compliance with the provisions of the UK Corporate Governance Code
specified for our review. Our additional responsibilities with respect to the corporate governance statement as other information are
described in the Reporting on other information section of this report.
Based on the work undertaken as part of our audit, we have concluded that each of the following elements of the corporate governance
statement is materially consistent with the financial statements and our knowledge obtained during the audit, and we have nothing material
to add or draw attention to in relation to:
• The directors’ confirmation that they have carried out a robust assessment of the emerging and principal risks;
• The disclosures in the Annual Report that describe those principal risks, what procedures are in place to identify emerging risks and an
explanation of how these are being managed or mitigated;
• The directors’ statement in 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’s and company’s ability to continue to
do so over a period of at least twelve months from the date of approval of the financial statements;
• The directors’ explanation as to their assessment of the group’s and company’s prospects, the period this assessment covers and why
the period is appropriate; and
• The directors’ statement as to whether they have a reasonable expectation that the company will be able to continue in operation
and meet its liabilities as they fall due over the period of its assessment, including any related disclosures drawing attention to any
necessary qualifications or assumptions.
Our review of the directors’ statement regarding the longer-term viability of the group was substantially less in scope than an audit and only
consisted of making inquiries and considering the directors’ process supporting their statement; checking that the statement is in alignment
with the relevant provisions of the UK Corporate Governance Code; and considering whether the statement is consistent with the financial
statements and our knowledge and understanding of the group and company and their environment obtained in the course of the audit.
In addition, based on the work undertaken as part of our audit, we have concluded that each of the following elements of the corporate
governance statement is materially consistent with the financial statements and our knowledge obtained during the audit:
• The directors’ statement that they consider the Annual Report, taken as a whole, is fair, balanced and understandable, and provides
the information necessary for the members to assess the group’s and company’s position, performance, business model and strategy;
• The section of the Annual Report that describes the review of effectiveness of risk management and internal control systems; and
• The section of the Annual Report describing the work of the Audit Committee.
We have nothing to report in respect of our responsibility to report when the directors’ statement relating to the company’s compliance with the
Code does not properly disclose a departure from a relevant provision of the Code specified under the Listing Rules for review by the auditors.
O
u
r
F
i
n
a
n
c
i
a
l
s
TOPPS TILES PLC ANNUAL REPORT AND ACCOUNTS FOR THE 53-WEEK PERIOD ENDED 2 OCTOBER 2021
97
30525-Topps-Tiles-AR2021-Financials.indd 97
30525-Topps-Tiles-AR2021-Financials.indd 97
Job number 10 December 2021 5:09 pm V5
10/12/2021 17:09:54
10/12/2021 17:09:54
INDEPENDENT AUDITOR’S REPORT
TO THE MEMBERS OF TOPPS TILES PLC
REPORT ON THE AUDIT OF THE FINANCIAL STATEMENTS
Responsibilities for the financial statements and the audit
Responsibilities of the directors for the financial statements
As explained more fully in the Directors’ Responsibilities Statement, the directors are responsible for the preparation of the financial
statements in accordance with the applicable framework and for being satisfied that they give a true and fair view. The directors are also
responsible for such internal control as they 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 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 company or to cease operations, or have no realistic alternative but to do so.
Auditors’ 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 auditors’ 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.
Irregularities, including fraud, are instances of non-compliance with laws and regulations. We design procedures in line with our
responsibilities, outlined above, to detect material misstatements in respect of irregularities, including fraud. The extent to which our
procedures are capable of detecting irregularities, including fraud, is detailed below.
Based on our understanding of the group and industry, we identified that the principal risks of non-compliance with laws and regulations
related to employment regulations, and relevant tax legislation, and we considered the extent to which non-compliance might have a
material effect on the financial statements. We also considered those laws and regulations that have a direct impact on the financial
statements such as the Companies Act 2006. We evaluated management’s incentives and opportunities for fraudulent manipulation of the
financial statements (including the risk of override of controls), and determined that the principal risks were related to the posting of journals
with unexpected account combinations and management bias in significant accounting estimates and judgements.. Audit procedures
performed by the engagement team included:
• Discussions with management, including internal legal counsel, over consideration of known or suspected instances of non-compliance
with laws , regulations and fraud;
• Challenging assumptions and judgements made by management in their significant accounting estimates and judgements, in particular
in relation to inventory provisioning; and
•
Identifying and testing higher risk journal entries, in particular any journal entries posted with unexpected account combinations.
• Considerations of any impact on the financial statements on the climate change strategy being implemented by management.
There are inherent limitations in the audit procedures described above. We are less likely to become aware of instances of non-
compliance with laws and regulations that are not closely related to events and transactions reflected in the financial statements. Also,
the risk of not detecting a material misstatement due to fraud is higher than the risk of not detecting one resulting from error, as fraud may
involve deliberate concealment by, for example, forgery or intentional misrepresentations, or through collusion.
Our audit testing might include testing complete populations of certain transactions and balances, possibly using data auditing techniques.
However, it typically involves selecting a limited number of items for testing, rather than testing complete populations. We will often seek to
target particular items for testing based on their size or risk characteristics. In other cases, we will use audit sampling to enable us to draw
a conclusion about the population from which the sample is selected.
A further description of our responsibilities for the audit of the financial statements is located on the FRC’s website at:
www.frc.org.uk/auditorsresponsibilities. This description forms part of our auditors’ report.
Use of this report
This report, including the opinions, has been prepared for and only for the company’s members as a body in accordance with Chapter 3
of Part 16 of the Companies Act 2006 and for no other purpose. We do not, in giving these opinions, accept or assume responsibility for
any other purpose or to any other person to whom this report is shown or into whose hands it may come save where expressly agreed by
our prior consent in writing.
98
TOPPS TILES PLC ANNUAL REPORT AND ACCOUNTS FOR THE 53-WEEK PERIOD ENDED 2 OCTOBER 2021
30525-Topps-Tiles-AR2021-Financials.indd 98
30525-Topps-Tiles-AR2021-Financials.indd 98
Job number 10 December 2021 5:09 pm V5
10/12/2021 17:09:54
10/12/2021 17:09:54
OTHER REQUIRED REPORTING
Companies Act 2006 exception reporting
Under the Companies Act 2006 we are required to report to you if, in our opinion:
• we have not obtained all the information and explanations we require for our audit; or
• adequate accounting records have not been kept by the company, or returns adequate for our audit have not been received from
branches not visited by us; or
• certain disclosures of directors’ remuneration specified by law are not made; or
•
the company financial statements and the part of the Directors’ Remuneration Report to be audited are not in agreement with the
accounting records and returns.
We have no exceptions to report arising from this responsibility
Appointment
Following the recommendation of the Audit Committee, we were appointed by the members on 30 January 2019 to audit the financial
statements for the year ended 28 September 2019 and subsequent financial periods. The period of total uninterrupted engagement is
3 years, covering the years ended 28 September 2019 to 2 October 2021.
Andrew Lyon
(Senior Statutory Auditor)
for and on behalf of PricewaterhouseCoopers LLP
Chartered Accountants and Statutory Auditors
East Midlands
10 December 2021
O
u
r
F
i
n
a
n
c
i
a
l
s
TOPPS TILES PLC ANNUAL REPORT AND ACCOUNTS FOR THE 53-WEEK PERIOD ENDED 2 OCTOBER 2021
99
30525-Topps-Tiles-AR2021-Financials.indd 99
30525-Topps-Tiles-AR2021-Financials.indd 99
Job number 10 December 2021 5:09 pm V5
10/12/2021 17:09:54
10/12/2021 17:09:54
CONSOLIDATED STATEMENT OF FINANCIAL PERFORMANCE
FOR THE 53 WEEKS ENDED 2 OCTOBER 2021
Group revenue
Cost of sales
Gross profit
Distribution and selling costs
Other operating expenses
Administrative costs
Sales and marketing costs
Group operating profit/(loss)
Finance income
Finance costs
Profit/(loss) before taxation
Taxation
Profit/(loss) for the period
Profit/(loss) is attributable to:
Owners of Topps Tiles Plc
Non-controlling interests
All results relate to continuing operations of the Group.
Earnings per ordinary share:
– Basic
– Diluted
Notes
3
6
6
4
7
53 weeks
ended
2 October
2021
£’000
227,997
(97,297)
130,700
(83,591)
(6,100)
(18,100)
(4,564)
18,345
87
(4,158)
14,274
(3,370)
10,904
52 weeks
ended
26 September
2020
£’000
192,813
(80,001)
112,812
(80,971)
(10,105)
(23,178)
(4,587)
(6,029)
101
(3,901)
(9,829)
1,811
(8,018)
10,876
28
10,904
(7,966)
(52)
(8,018)
9
9
5.59p
5.52p
(4.11)p
(4.11)p
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
FOR THE 53 WEEKS ENDED 2 OCTOBER 2021
Profit/(loss) for the period
Total comprehensive income/(expense) for the period is attributable to:
Owners of Topps Tiles Plc
Non-controlling interests
53 weeks
ended
2 October
2021
£’000
10,904
52 weeks
ended
26 September
2020
£’000
(8,018)
10,876
28
10,904
(7,966)
(52)
(8,018)
100
TOPPS TILES PLC ANNUAL REPORT AND ACCOUNTS FOR THE 53-WEEK PERIOD ENDED 2 OCTOBER 2021
30525-Topps-Tiles-AR2021-Financials.indd 100
30525-Topps-Tiles-AR2021-Financials.indd 100
Job number 10 December 2021 5:09 pm V5
10/12/2021 17:09:54
10/12/2021 17:09:54
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
AS AT 2 OCTOBER 2021
Non-current assets
Goodwill
Intangible assets
Property, plant and equipment
Investment properties
Other financial assets
Deferred tax assets
Right-of-use assets
Current assets
Assets classified as held for sale
Inventories
Other financial assets
Trade and other receivables
Cash and cash equivalents
Total assets
Current liabilities
Bank loans
Trade and other payables
Lease liabilities
Current tax liabilities
Provisions
Net current liabilities
Non-current liabilities
Lease liabilities
Provisions
Total liabilities
Net assets
Equity
Share capital
Share premium
Own shares
Merger reserve
Share-based payment reserve
Capital redemption reserve
Accumulated losses
Capital and reserves attributable to owners of Topps Tiles Plc
Non-controlling interests
Total equity
Notes
10
11
12a
12b
14
15
14
12c
16
14
17
18
19
20
14
22
14
22
23
24
25
2021
£’000
2020
£’000
–
1,243
23,680
–
2,335
407
95,418
123,483
–
32,758
518
4,538
27,789
65,603
188,686
–
(47,425)
(19,521)
(2,027)
(353)
(69,326)
(3,723)
–
916
27,170
–
2,749
1,406
106,258
138,499
1,786
29,337
873
3,567
31,018
66,581
205,080
(4,981)
(58,446)
(25,520)
(1,114)
(462)
(90,523)
(23,942)
(91,817)
(1,969)
(163,112)
25,574
(98,636)
(1,867)
(191,026)
14,054
6,555
2,625
(1,216)
(399)
4,642
20,359
(6,992)
25,574
–
25,574
6,548
2,492
(1,483)
(399)
3,965
20,359
(17,400)
14,082
(28)
14,054
O
u
r
F
i
n
a
n
c
i
a
l
s
The accompanying notes are an integral part of these financial statements.
The financial statements of Topps Tiles Plc, registered number 3213782, on pages 100 to 135 were approved by the Board of Directors
and authorised for issue on 10 December 2021. They were signed on its behalf by:
Rob Parker
Stephen Hopson
Directors
TOPPS TILES PLC ANNUAL REPORT AND ACCOUNTS FOR THE 53-WEEK PERIOD ENDED 2 OCTOBER 2021
101
30525-Topps-Tiles-AR2021-Financials.indd 101
30525-Topps-Tiles-AR2021-Financials.indd 101
Job number 10 December 2021 5:09 pm V5
10/12/2021 17:09:54
10/12/2021 17:09:54
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
FOR THE 53 WEEKS ENDED 2 OCTOBER 2021
Balance at
29 September 2019
Loss and total
comprehensive expense
for the period
Dividends
Issue of share capital
Own shares issued
in the period
Credit to equity for
equity-settled share-based
payments
Deferred tax on share-based
payment transactions
Acquisition of non-
controlling interest on
business combination
Balance at
26 September 2020
Profit and total
comprehensive income
for the period
Dividends
Issue of share capital
Own shares issued
in the period
Credit to equity for
equity-settled share-based
payments
Deferred tax on share-based
payment transactions
Acquisition of non-
controlling interest on
business combination
Balance at
2 October 2021
Share
capital
£’000
Share
premium
£’000
Own
shares
£’000
Merger
reserve
£’000
Share-based
payment
reserve
£’000
Capital
redemption
reserve
£’000
Accumulated
losses
£’000
Non-
controlling
interest
£’000
Total
equity
£’000
6,548
2,490
(1,548)
(399)
3,962
20,359
(4,783)
(2)
26,627
–
–
–
–
–
–
–
–
–
2
–
–
–
–
–
–
–
65
–
–
–
–
–
–
–
–
–
–
–
–
–
–
3
–
–
–
–
–
–
–
–
–
(7,966)
(4,484)
–
(65)
–
(2)
(52)
–
–
(8,018)
(4,484)
2
–
–
–
–
3
(2)
(100)
26
(74)
6,548
2,492
(1,483)
(399)
3,965
20,359
(17,400)
(28)
14,054
–
–
7
–
–
–
–
–
–
133
–
–
–
–
–
–
–
267
–
–
–
–
–
–
–
–
–
–
–
–
–
–
677
–
–
–
–
–
–
–
–
–
10,876
–
–
(267)
–
(47)
(154)
6,555
2,625
(1,216)
(399)
4,642
20,359
(6,992)
28
–
–
–
–
10,904
–
140
–
677
– (47)
–
–
(154)
25,574
102
TOPPS TILES PLC ANNUAL REPORT AND ACCOUNTS FOR THE 53-WEEK PERIOD ENDED 2 OCTOBER 2021
30525-Topps-Tiles-AR2021-Financials.indd 102
30525-Topps-Tiles-AR2021-Financials.indd 102
Job number 10 December 2021 5:09 pm V5
10/12/2021 17:09:55
10/12/2021 17:09:55
CONSOLIDATED CASH FLOW STATEMENT
FOR THE 53 WEEKS ENDED 2 OCTOBER 2021
Cash flow from operating activities
Profit/(loss) for the period
Taxation
Finance costs
Finance income
Group operating profit/(loss)
Adjustments for:
Depreciation of property, plant and equipment
Depreciation of right-of-use assets
Amortisation of intangible assets
Loss on disposal of property, plant and equipment
Loss/(gain) on sublease
Impairment (reversal)/charge of property, plant and equipment
Fair value adjustment for asset held for sale
Impairment of right-of-use assets
Impairment of goodwill
Impairment of intangible assets
Gain on lease disposal
Receipt of lease incentives
Loss on disposal of investment properties
Share option charge
Decrease in trade and other receivables
(Increase)/decrease in inventories
(Decrease)/increase in payables
Cash generated by operations
Interest paid
Interest element of lease liabilities paid
Taxation paid
Net cash from operating activities
Investing activities
Interest received
Interest received on sublease assets
Receipt of capital element of sublease assets
Purchase of property, plant and equipment
Purchase of intangibles
Proceeds on disposal of property, plant and equipment
Acquisition of subsidiary, net of cash acquired
Net cash (used in)/generated from investment activities
Financing activities
Payment of capital element of lease liabilities
Dividends paid
Proceeds from issue of share capital
Drawdown of bank loans
Repayment of bank loans
Net cash used in financing activities
Net (decrease)/increase in cash and cash equivalents
Cash and cash equivalents at beginning of period
Cash and cash equivalents at end of period
53 weeks
ended
2 October
2021
£’000
52 weeks
ended
26 September
2020
£’000
10,904
3,370
4,158
(87)
18,345
6,268
20,508
186
1,736
134
(604)
–
2,402
–
–
(2,563)
–
–
677
7
(3,421)
(11,209)
32,466
(468)
(3,728)
(1,535)
26,735
11
76
629
(4,221)
(513)
2,096
(154)
(2,076)
(23,026)
–
133
–
(4,995)
(27,888)
(3,229)
31,018
27,789
(8,018)
(1,811)
3,901
(101)
(6,029)
7,145
21,080
477
338
(150)
1,155
558
5,411
3,104
1,687
(388)
173
483
3
252
1,589
18,990
55,878
(856)
(3,033)
(999)
50,990
20
81
343
(6,290)
(417)
18,552
(74)
12,215
(21,452)
(4,484)
2
20,000
(45,000)
(50,934)
12,271
18,747
31,018
O
u
r
F
i
n
a
n
c
i
a
l
s
TOPPS TILES PLC ANNUAL REPORT AND ACCOUNTS FOR THE 53-WEEK PERIOD ENDED 2 OCTOBER 2021
103
30525-Topps-Tiles-AR2021-Financials.indd 103
30525-Topps-Tiles-AR2021-Financials.indd 103
Job number 10 December 2021 5:09 pm V5
10/12/2021 17:09:55
10/12/2021 17:09:55
NOTES TO THE FINANCIAL STATEMENTS
FOR THE 53 WEEKS ENDED 2 OCTOBER 2021
1 General Information
Topps Tiles Plc is a public company, limited by shares, incorporated and domiciled in the United Kingdom under the Companies Act
2006. The address of the registered office is given on page 53. The nature of the Group’s operations and its principal activity are
set out in the Directors’ Report on page 70.
These audited 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. The Group has not early adopted any other standard, interpretation or amendment that has been issued but is not yet effective.
Standards Adopted in Current Period
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 References to the Conceptual Framework in IFRS Standards
Amendments to IFRS 9, IAS 39 and IFRS 7 – Interest rate benchmark reform
Amendments to IFRS 16 – Covid-19 concessions
2 Accounting Policies
The principal accounting policies adopted are set out below.
A) Basis of Accounting
These financial statements have been prepared in accordance with international accounting standards in conformity with the requirements
of the Companies Act 2006 (‘IFRS’) and the applicable legal requirements of the Companies Act 2006. In addition to complying with
international accounting standards in conformity with the requirements of the Companies Act 2006, the consolidated financial statements
also comply with international financial reporting standards adopted pursuant to Regulation (EC) No 1606/2002 as it applies in the
European Union. The financial statements have been prepared on the historical cost basis, except for the revaluation of derivative financial
instruments and investment property. Historical cost is generally based on the fair value of the consideration given in exchange for goods
and services.
The accounting policies set out below have, unless otherwise stated, been applied consistently to all periods presented in these Group
financial statements.
B) Going Concern
When considering the going concern assertion, the Board reviews several factors including a review of risks and uncertainties, the ability
of the Group to meet its banking covenants and operate within its banking facilities based on current financial plans, along with a detailed
review of a more pessimistic trading scenario that was deemed severe but plausible. The more pessimistic trading scenario was based
on a further national lockdown related to the Covid-19 pandemic during quarter 2 of FY22 that would see our Retail stores closed to
homeowners for a further three months.
The Group has already taken a number of actions to strengthen its liquidity during the Covid-19 pandemic, including the sale and
leaseback of the Group’s head office and central warehouse buildings in Enderby in June 2020. The going concern review also outlined
a range of other mitigating actions that could be taken in a severe but plausible trading scenario. These included, but were not limited
to, savings on store employee costs, savings on central support costs, reduced marketing activity, a reduction of capital expenditure,
management of working capital and suspension of the dividend.
The Group’s cash headroom and covenant compliance was reviewed against current lending facilities in both the base case and
the severe but plausible downside scenario. The current lending facility was refinanced in July 2018 and expires in July 2023. In all
scenarios, the Board have concluded that there is sufficient available liquidity and covenant headroom for the Group to continue to meet
all of its financial commitments as they fall due for the foreseeable future, a period of not less than 12 months from the date of this report.
Accordingly, the Board continue to adopt the going concern basis in preparing the financial statements.
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 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 profit or loss as incurred.
104
TOPPS TILES PLC ANNUAL REPORT AND ACCOUNTS FOR THE 53-WEEK PERIOD ENDED 2 OCTOBER 2021
30525-Topps-Tiles-AR2021-Financials.indd 104
30525-Topps-Tiles-AR2021-Financials.indd 104
Job number 10 December 2021 5:09 pm V5
10/12/2021 17:09:55
10/12/2021 17:09:55
2 Accounting Policies continued
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
IFRS 9 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.
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 is drawn up to a Saturday within seven days of 30 September resulting in financial periods of either 52 or
53 weeks.
Throughout the financial statements, Directors’ Report and Strategic Report, references to 2021 mean “at 2 October 2021” or the 53
weeks then ended; references to 2020 mean “at 26 September 2020” 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 transaction price received or receivable and represents amounts receivable for goods 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 satisfied its performance obligations to external customers, being the date goods are collected from store or received
by the customers; and
•
the customer has obtained control of the goods being transferred.
These conditions are met, predominantly, at the point of sale. The exceptions to this are for: goods ordered in advance of collection,
where revenue is recognised at the point that the goods are collected; sales of goods that result in award credits for customers (see
below); and web sales, where revenue is recognised at the point of delivery.
O
u
r
F
i
n
a
n
c
i
a
l
s
TOPPS TILES PLC ANNUAL REPORT AND ACCOUNTS FOR THE 53-WEEK PERIOD ENDED 2 OCTOBER 2021
105
30525-Topps-Tiles-AR2021-Financials.indd 105
30525-Topps-Tiles-AR2021-Financials.indd 105
Job number 10 December 2021 5:09 pm V5
10/12/2021 17:09:55
10/12/2021 17:09:55
NOTES TO THE FINANCIAL STATEMENTS
FOR THE 53 WEEKS ENDED 2 OCTOBER 2021
2 Accounting Policies continued
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 could 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 performance
obligations have been satisfied.
The level of sales returns is closely monitored by management and, as such, the Group holds a sales return provision in the Consolidated
Statement of Financial Position to provide for the expected level of returns. The sales value of the expected returns is recognised within
accruals, with the cost value of the goods expected to be returned recognised as a current asset within inventories.
H) Intangible Assets
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 amortisation.
Costs that are directly associated with identifiable software products controlled by the Group, and that will generate economic benefits
beyond one year, are recognised as intangible assets. These intangible assets are stated at cost less accumulated amortisation and
impairment losses, and are amortised over four years.
I) Property, Plant and Equipment
Property, plant and equipment is 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 and long leasehold buildings 2% per annum on cost on a straight-line basis
Short leasehold land and buildings
Fixtures and fittings
over the period of the lease, up to 50 years on a straight-line basis
over 10 years, except for the following: four years for computer equipment or five years for
display stands, as appropriate
25% per annum on a reducing balance basis
Motor vehicles
Freehold land is not depreciated.
The assets’ residual values and useful lives are reviewed, and adjusted if appropriate, at the end of each reporting period.
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 Consolidated Statement of Financial Performance.
Non-current assets are classified as held for sale if the assets are available for immediate sale in their present condition and the sale is
highly probable. After reclassified as held for sale, the assets are measured at the lower of their carrying value and fair value less costs
to sell.
J) Impairment of Tangible, Intangible and Right-of-Use Assets
At each period end, the Group reviews the carrying amounts of its tangible, intangible, and right-of-use 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 pre-tax cash
flows are discounted to their present value using a pre-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.
106
TOPPS TILES PLC ANNUAL REPORT AND ACCOUNTS FOR THE 53-WEEK PERIOD ENDED 2 OCTOBER 2021
30525-Topps-Tiles-AR2021-Financials.indd 106
30525-Topps-Tiles-AR2021-Financials.indd 106
Job number 10 December 2021 5:09 pm V5
10/12/2021 17:09:55
10/12/2021 17:09:55
2 Accounting Policies continued
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 is derived using the average cost method and includes an attributable proportion of distribution overheads based on normal levels of
activity. 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.
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, 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.
O
u
r
F
i
n
a
n
c
i
a
l
s
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.
N) Leases
The following policies apply subsequent to the date of initial application of IFRS 16, 29 September 2019.
Leases in which the Group is a Lessee
The Group leases assets which consist of properties, vehicles and equipment. Rental contracts are typically made for fixed periods but may
have extension options or break options to maximise operational flexibility. Lease terms are negotiated on an individual basis and contain
a wide range of different terms and conditions.
The Group assesses whether a contract is or contains a lease based on the new definition of a lease. Under IFRS 16, a contract is, or
contains, a lease if the contract conveys a right to control the use of an identified asset for a period of time in exchange for consideration.
TOPPS TILES PLC ANNUAL REPORT AND ACCOUNTS FOR THE 53-WEEK PERIOD ENDED 2 OCTOBER 2021
107
30525-Topps-Tiles-AR2021-Financials.indd 107
30525-Topps-Tiles-AR2021-Financials.indd 107
Job number 10 December 2021 5:09 pm V5
10/12/2021 17:09:55
10/12/2021 17:09:55
NOTES TO THE FINANCIAL STATEMENTS
FOR THE 53 WEEKS ENDED 2 OCTOBER 2021
2 Accounting Policies continued
At the commencement date of property leases the Group determines the lease term to be the full term of the lease, assuming that any
option to break or extend the lease is unlikely to be exercised. The Group considers the lease term to be the non-cancellable period
and in assessing this applies the definition of a contract and determines the period for which the contract is enforceable.
Under IFRS 16, the Group recognises right-of-use assets and lease liabilities for most leases.
The Group has elected to take advantage of the following recognition exemptions and account for lease payments as an expense on
a straight-line basis over the lease term or another systematic basis for the following two types of leases:
•
•
leases with a lease term of 12 months or less and containing no purchase options – this election is made by class of underlying asset; and
leases where the underlying asset has a low value when new – this election can be made on a lease-by-lease basis.
For leases where the Group has taken short-term lease recognition exemption and there are any changes to the lease term or the lease is
modified, the Group accounts for the lease as a new lease.
From 29 September 2019, leases are recognised as a right-of-use asset with a corresponding liability at the date at which the leased
asset is available for use by the Group. Each lease payment comprises an element of capital and finance cost. The finance cost is
charged to profit or loss over the lease period so as to produce a constant periodic rate of interest on the remaining balance of the liability
for each period. The right-of-use asset is depreciated over the shorter of the asset’s useful life and the lease term on a straight-line basis.
Assets and liabilities arising from a lease are initially measured on a present value basis. Lease liabilities include the net present value of
the following lease payments:
•
fixed payments (including in-substance fixed payments), less any lease incentives receivable;
• variable lease payments that are based on an index or a rate;
• amounts expected to be payable by the lessee under residual value guarantees;
•
the exercise price of a purchase option if the lessee is reasonably certain to exercise that option; and
• payments of penalties for terminating the lease if the lease term reflects the lessee exercising that option.
The lease payments are discounted using the interest rate implicit in the lease. If that rate cannot be determined, the lessee’s incremental
borrowing rate is used, being the rate that the lessee would have to pay to borrow the funds necessary to obtain an asset of similar value
in a similar economic environment with similar terms and conditions.
Right-of-use assets are measured at cost comprising the following:
•
the amount of the initial measurement of lease liability;
• any lease payments made at or before the commencement date less any lease incentives received;
• any initial direct costs; and
•
restoration costs.
After lease commencement, the Group measures right-of-use assets using a cost model. Under the cost model a right-of-use asset is
measured at cost less accumulated depreciation and accumulated impairment.
Subsequent to initial measurement, lease liabilities increase as a result of interest charged at a constant rate on the balance outstanding
and are reduced for lease payments made. The lease liability is also remeasured to reflect changes in:
•
•
•
•
the lease term (using a revised discount rate);
the assessment of a purchase option (using a revised discount rate);
the amounts expected to be payable under residual value guarantees (using an unchanged discount rate); and
future lease payments resulting from a change in an index or a rate used to determine those payments (using an unchanged
discount rate).
The remeasurements are matched by adjustments to the right-of-use asset.
Lease modifications may also prompt remeasurement of the lease liability unless they are determined to be separate leases.
The right-of-use asset is subsequently depreciated using the straight-line method from the commencement date to the earlier of the end of
the useful life of the right-of-use asset or the end of lease term. The estimated useful lives of right-of-use assets are determined on the same
basis as those of property, plant and equipment. In addition, the right-of-use asset is reduced by impairment losses, if any, and adjusted for
certain remeasurements of the lease liability.
The capital element of payments related to leases are presented under cash flow from financing activities in the Consolidated Cash Flow
Statement, and the interest element of payments presented under cash flow from operating activities.
108
TOPPS TILES PLC ANNUAL REPORT AND ACCOUNTS FOR THE 53-WEEK PERIOD ENDED 2 OCTOBER 2021
30525-Topps-Tiles-AR2021-Financials.indd 108
30525-Topps-Tiles-AR2021-Financials.indd 108
Job number 10 December 2021 5:09 pm V5
10/12/2021 17:09:55
10/12/2021 17:09:55
2 Accounting Policies continued
Leases in which the Group is a Lessor
At lease inception, lessors will determine whether each lease is a finance lease or an operating lease. To classify each lease, the
Group makes an overall assessment of whether the lease transfers substantially all of the risks and rewards incidental to ownership of
the underlying asset. If this is considered to be the case, then the lease is recognised as a finance lease, if not then it is recognised as
an operating lease. As part of this assessment, the Group considers certain factors such as whether the lease is for the major part of the
economic life of the asset.
When the Group is an intermediate lessor, it accounts for its interests in the head lease and the sub-lease separately. It assesses the
lease classification of a sub-lease with reference to the right-of-use asset arising from the head lease, not with reference to the underlying
asset. If a head lease is a short-term lease to which the Group applies the recognition exemption, then it classifies the sub-lease as an
operating lease.
On transition to IFRS 16 on 29 September 2019, the Group has reclassified a small number of sub-leases as finance leases, resulting in
recognition of a finance lease receivable, being equal to the net investment in the lease. The Group recognises finance income over the
lease term of a finance lease, based on a pattern reflecting a constant periodic rate of return on the net investment.
There will be no change to the accounting for the remaining sub-leases, which continue to be accounted for as operating leases, and
income from these leases will continue to be recognised on a straight-line basis over the term of the lease.
Sale and Leaseback
A sale and leaseback transaction is where the Group sells an asset and immediately reacquires the use of the asset by entering into a
lease with the buyer. On entering into a sale and leaseback transaction, the Group determines whether the transfer of the assets qualifies
as a sale (satisfying a performance obligation in IFRS 15 “Revenue from Contracts with Customers”). Where the transfer is a sale and
providing the transaction is on market terms than the previous carrying amount of the underlying asset is split between:
• a right-of-use asset arising from the leaseback (being the proportion of the previous carrying amount of the asset that relates to the
rights retained); and
•
the rights in the underlying asset retained by the buyer/lessor at the end of the leaseback.
The Group recognises a portion of the total gain or loss on the sale. The amount recognised is calculated by splitting the total gain
or loss into:
• an unrecognised amount relating to the rights retained by the seller/lessee; and
• a recognised amount relating to the buyer/lessor’s rights in the underlying asset at the end of the leaseback.
The leaseback itself is then accounted for under IFRS 16.
O) Retirement Benefit Costs
For defined contribution schemes, the amount charged to the statement of financial performance in respect of pension costs is the
contributions payable in the period. Differences between contributions payable in the period and contributions actually paid are
shown as either accruals or prepayments in the statement of financial position.
P) 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.
Q) Financial Instruments
Financial assets and financial liabilities are recognised in the Group’s statement of financial position when the Group becomes a party
to the contractual provisions of the instrument.
All financial assets are recognised and derecognised on a trade date where the purchase or sale of a financial asset is under a contract
whose terms require delivery of the financial asset within the timeframe established by the market concerned, and are initially measured
at fair value plus transaction costs, except for those financial assets classified as at fair value through profit or loss, which are initially
measured at fair value.
Financial assets are classified into the following specified categories: financial assets “at fair value through profit or loss” (FVTPL), financial
assets “at fair value through other comprehensive income” (FVOCI), and financial assets carried at “amortised cost”. The classification of
financial assets under IFRS 9 is generally based on the business model in which a financial asset is managed and its contractual cash flow
characteristics.
O
u
r
F
i
n
a
n
c
i
a
l
s
TOPPS TILES PLC ANNUAL REPORT AND ACCOUNTS FOR THE 53-WEEK PERIOD ENDED 2 OCTOBER 2021
109
30525-Topps-Tiles-AR2021-Financials.indd 109
30525-Topps-Tiles-AR2021-Financials.indd 109
Job number 10 December 2021 5:09 pm V5
10/12/2021 17:09:55
10/12/2021 17:09:55
NOTES TO THE FINANCIAL STATEMENTS
FOR THE 53 WEEKS ENDED 2 OCTOBER 2021
2 Accounting Policies continued
Financial Assets at FVTPL
Financial assets at FVTPL are stated at fair value, with any resultant gain or loss recognised in profit or loss. Transactional costs of financial
assets carried at FVTPL are expensed in the Consolidated Statement of Financial Performance. 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. Financial assets at FVTPL
are subsequently measured at fair value, with net gains and losses, including any interest or dividend income being recognised in profit
of loss.
Trade and Other Receivables
Trade and other receivables that have fixed or determinable payments that are not quoted in an active market are initially recognised at
fair value and then carried 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. The Group assesses on a forward-looking basis the
expected credit losses associated with its financial assets carried at amortised cost.
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, as well as observable changes in national or local economic conditions that correlate with default on receivables. The
Group applies the IFRS 9 simplified approach to measuring expected credit losses which uses a lifetime expected loss allowance for
financial assets.
For all other 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. The Group will write off, either
partially or in full, the gross carrying amount of a financial asset when there is no realistic prospect of recovery. This is usually the case
when it is determined that the debtor does not have the assets or sources of income that could generate sufficient cash flows to repay the
amounts subject to the write-off.
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 of cash balances including credit card receipts and deposits, less bank overdrafts, which are
repayable on demand where there is a right of offset. All cash equivalents have an original maturity of three months or less.
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 that are classified as FVTPL relate to derivatives that are 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.
110
TOPPS TILES PLC ANNUAL REPORT AND ACCOUNTS FOR THE 53-WEEK PERIOD ENDED 2 OCTOBER 2021
30525-Topps-Tiles-AR2021-Financials.indd 110
30525-Topps-Tiles-AR2021-Financials.indd 110
Job number 10 December 2021 5:09 pm V5
10/12/2021 17:09:55
10/12/2021 17:09:55
2 Accounting Policies continued
Other Financial Liabilities
Other financial liabilities, including borrowings, are initially measured at fair value, net of transaction costs. Other financial liabilities are
subsequently measured at amortised cost using the effective interest method, with interest expense recognised on an effective yield basis.
The effective interest method is a method of calculating the amortised cost of a financial liability and of allocating interest expense over the
relevant period. The effective interest rate is the rate that exactly discounts estimated future cash payments through the expected life of the
financial liability or, where appropriate, a shorter period, to the net carrying amount on initial recognition.
Derecognition of Financial Liabilities
The Group derecognises financial liabilities when, and only when, the Group’s obligations are discharged, cancelled or they expire.
Derivative Financial Instruments
The Group’s activities expose it to the financial risks of changes in foreign currency exchange rates.
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. The fair values are determined
by reference to the market prices available from the market on which the instruments involved are traded.
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.
R) Share-Based Payments
The Group has applied the requirements of IFRS 2 “Share-based Payments”.
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.
S) Trade Payables
Trade payables are initially measured at fair value and are subsequently measured at amortised cost, using the effective interest
rate method.
T) Operating Costs
Restructuring costs relate to Board-approved decisions such as business closures or major organisational changes. Operating profit is
stated after charging/(crediting) restructuring costs but before investment income and finance costs.
Employee profit sharing costs are classified as distribution and selling costs and administrative costs.
U) Provisions
Provisions are recognised when the Group has a present obligation (legal or constructive) as a result of a past event, and it is probable
that the Group will be required to settle that obligation and a reliable estimate can be made of the amount of that obligation. Provisions
are measured at the Directors’ best estimate of the expenditure required to settle the obligation at the balance sheet date, and are
discounted to present value where the effect is material.
V) 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.
W) Investment Properties
Investment properties are measured initially at cost, including transaction costs. Subsequent to initial recognition, investment properties
are stated at fair value, which reflects market conditions at the reporting date. Gains or losses arising from changes in the fair values of
investment properties are included in profit or loss in the period in which they arise, including the corresponding tax effect. Investment
properties are not depreciated.
O
u
r
F
i
n
a
n
c
i
a
l
s
TOPPS TILES PLC ANNUAL REPORT AND ACCOUNTS FOR THE 53-WEEK PERIOD ENDED 2 OCTOBER 2021
111
30525-Topps-Tiles-AR2021-Financials.indd 111
30525-Topps-Tiles-AR2021-Financials.indd 111
Job number 10 December 2021 5:09 pm V5
10/12/2021 17:09:55
10/12/2021 17:09:55
NOTES TO THE FINANCIAL STATEMENTS
FOR THE 53 WEEKS ENDED 2 OCTOBER 2021
2 Accounting Policies continued
The Group obtains independent valuations for its investment properties and, at the end of the reporting period, the fair value of each
property is updated, taking into account the most recent independent valuation. The best evidence of fair value is current prices in an
active market for similar properties. Where such information is not available, the Directors consider information for properties of different
nature or recent prices of similar properties in less active markets, adjusted to reflect those differences.
Investment properties are derecognised either when they have been disposed of or when they are permanently withdrawn from use and no
future economic benefit is expected from their disposal. The difference between the net disposal proceeds and the carrying amount of the
asset is recognised in profit or loss in the period of derecognition.
The Group has no restrictions on the realisability of its investment properties and no contractual obligations to purchase, construct or
develop investment properties or for repairs, maintenance and enhancements.
X) Government Grants
The Group applies IAS 20 “Accounting for Government Grants and Disclosures of Government Assistance” when accounting for
government grants. A government grant is not recognised until there is reasonable assurance that the Group will comply with the conditions
attaching to it, and that the grant will be received. Government grants are recognised in the Consolidated Statement of Financial
Performance on a systematic basis over the periods in which the Group recognises as expenses the related costs for which the grants are
intended to compensate. The Group has chosen to present government grants netted off against the related expense.
Y) Reserves
The merger reserve arose on pre-2006 acquisitions. The Directors do not consider this to be distributable as at 2 October 2021 (2020:
same).
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 2 October 2021 (2020: same).
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 2 October 2021 (2020: same).
Z) 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.
Critical Accounting Judgements
The key accounting judgements used in the financial statements are as follows:
Lease Terms
IFRS 16 defines the lease term as the non-cancellable period of a lease together with the options to extend or terminate a lease, if the
lessee were reasonably certain to exercise that option. The Group has applied judgement to determine the lease term for some lease
contracts in which it is a lessee that includes renewal options and break clauses, which can significantly affect the amount of lease
liabilities and right-of-use assets recognised.
At the commencement date of a property lease the Group normally determines the lease term to be the full term of the lease, assuming
that any option to break or extend the lease is unlikely to be exercised and it is not reasonably certain that the Group will continue in
occupation for any period beyond the lease term.
For property leases the key factors that are normally the most relevant are the profitability of the leased store, the future plans of the
business, and whether there are any penalties associated with exercising an option.
Leases are regularly reviewed on a lease-by-lease basis and will be revalued if it becomes likely that a break clause or option to extend
the lease is exercised.
112
TOPPS TILES PLC ANNUAL REPORT AND ACCOUNTS FOR THE 53-WEEK PERIOD ENDED 2 OCTOBER 2021
30525-Topps-Tiles-AR2021-Financials.indd 112
30525-Topps-Tiles-AR2021-Financials.indd 112
Job number 10 December 2021 5:09 pm V5
10/12/2021 17:09:55
10/12/2021 17:09:55
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:
Incremental Borrowing Rate
Under IFRS 16, the Group recognises a right-of-use asset representing its right to use the underlying asset and a lease liability representing
its obligation to make lease payments. The discount rate used to calculate the lease liability is the rate implicit in the lease, if it can be
readily determined, or the lessee’s incremental borrowing rate if not. The lease liability is initially measured at the present value of the
remaining lease payments, discounted using the Group’s incremental borrowing rate, adjusted to take into account the risk associated with
the length of the lease that ranges between 1 and 20 years. The Group uses the lessee’s incremental borrowing rate for all property and
equipment leases.
Due to the size of the Group’s lease portfolio, the discount rate is considered to be a significant judgement with estimation, ranging
between 2.17% and 3.09% dependent on the length of the lease term.
Store Impairment
During the period, the Group has continued to review the performance of its store portfolio. Each store is tested for impairment in line with
IAS 36, and the key estimates involved relate to the pre-tax discount rate, long-term growth rate, and cash flow forecasts – see note 14 for
further details.
Inventory Provision
The Group provides against the carrying value of the inventories held where it is anticipated that net realisable value (NRV) will be
below cost. The key estimate involves an assessment of discontinued lines and lines in the process of being discontinued, and the level
of expected clearance before lines are removed from sale. A 10% change in the level of provision against these lines would lead to a
change in the provision of £255,000.
Climate Change
Climate change is a global challenge and an emerging risk to businesses, people and the environment across the world. We have a role
to play in limiting warming by improving our energy management, reducing our carbon emissions and by helping our customers do the
same. Growing awareness of climate change and changing customer demands will provide impetus for business growth as we provide
more environmentally sustainable products that use higher levels of recycled materials in production and reduce carbon emissions. As a
result, in our view climate change does not represent a material estimation uncertainty. For further detail see the Sustainability section of the
Strategic Report.
3 Revenue
An analysis of Group revenue is as follows:
Revenue from the sale of goods
Total revenue
53 weeks
ended
2 October
2021
£’000
227,997
227,997
52 weeks
ended
26 September
2020
£’000
192,813
192,813
The Group has one reportable segment in accordance with IFRS 8 “Operating Segments”, which encompasses the Topps Tiles Group
revenue generated instore and online from retail and commercial customers. The Board receives monthly financial information at this level
and uses this information to monitor performance, allocate resources and make operational decisions. All revenue is derived from sales
in the UK.
The Group’s revenue is driven by the consolidation of individual small value transactions and, as a result, Group revenue is not reliant
on a major customer or group of customers.
O
u
r
F
i
n
a
n
c
i
a
l
s
TOPPS TILES PLC ANNUAL REPORT AND ACCOUNTS FOR THE 53-WEEK PERIOD ENDED 2 OCTOBER 2021
113
30525-Topps-Tiles-AR2021-Financials.indd 113
30525-Topps-Tiles-AR2021-Financials.indd 113
Job number 10 December 2021 5:09 pm V5
10/12/2021 17:09:55
10/12/2021 17:09:55
NOTES TO THE FINANCIAL STATEMENTS
FOR THE 53 WEEKS ENDED 2 OCTOBER 2021
4 Profit/(Loss) Before Taxation
Profit/ (loss) before taxation for the period has been arrived at after charging/(crediting):
Depreciation of property, plant and equipment
Depreciation of right-of-use assets
Impairment (reversal)/charge of property, plant and equipment
Fair value adjustment for asset held for sale
Impairment of right-of-use assets
Loss on disposal of property, plant and equipment
Amortisation of intangibles
Impairment of intangibles
Impairment of goodwill
Loss on disposal of investment properties
Staff costs (see note 5)
Furlough income received
Government grants received
Exchange losses recognised in profit or loss
Write-down of inventories recognised as an expense
Cost of inventories recognised as an expense
During the year, the business disposed of three freehold properties (2020: three freehold properties).
Analysis of the Auditor’s remuneration is provided below:
Fees payable to the Company’s Auditors with respect to the Company’s annual accounts
Fees payable to the Company’s Auditors and their associates for other audit services to the Group:
Audit of the Company’s subsidiaries pursuant to legislation
Total audit fees
Total non-audit fees
Total fees payable to the Company’s Auditors
53 weeks
ended
2 October
2021
£’000
6,268
20,508
(604)
–
2,402
1,736
186
–
–
–
57,955
–
–
145
4,598
92,554
52 weeks
ended
26 September
2020
£’000
7,145
21,080
1,155
558
5,411
338
477
1,687
3,104
483
49,638
(5,228)
(700)
94
4,331
75,573
53 weeks
ended
2 October
2021
£’000
52 weeks
ended
26 September
2020
£’000
74
229
303
–
303
49
184
233
–
233
A description of the work of the Audit Committee is set out on page 64 and includes an explanation of how Auditor’s objectivity and
independence is safeguarded when non-audit services are provided by the Auditors.
114
TOPPS TILES PLC ANNUAL REPORT AND ACCOUNTS FOR THE 53-WEEK PERIOD ENDED 2 OCTOBER 2021
30525-Topps-Tiles-AR2021-Financials.indd 114
30525-Topps-Tiles-AR2021-Financials.indd 114
Job number 10 December 2021 5:09 pm V5
10/12/2021 17:09:56
10/12/2021 17:09:56
5 Staff Costs
The average monthly number of persons employed by the Group in the UK during the accounting period (including Executive
Directors) was:
Selling
Administration
53 weeks
ended
2 October
2021
Number
employed
1,533
314
1,847
52 weeks
ended
26 September
2020
Number
employed
1,661
340
2,001
The average monthly number of persons (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 27)
Social security costs
Other pension costs (see note 26b)
53 weeks
ended
2 October
2021
Number
employed
52 weeks
ended
26 September
2020
Number
employed
1,455
283
1,738
2021
£’000
52,348
4,498
1,109
57,955
1,573
332
1,905
2020
£’000
44,865
3,779
994
49,638
Details of Directors’ emoluments are disclosed on pages 76 to 82. The Group considers key management to be the Directors only.
Employee profit sharing of £8.3 million (2020: £4.3 million) is included in the above and comprises sales commission and bonuses.
6 Finance Income and Finance Costs
Finance income
Bank interest receivable
Interest income from finance lease receivables
Finance costs
Interest on bank loans and overdrafts
Interest payable on lease liabilities
O
u
r
F
i
n
a
n
c
i
a
l
s
53 weeks
ended
2 October
2021
£’000
52 weeks
ended
26 September
2020
£’000
11
76
87
20
81
101
(430)
(3,728)
(4,158)
(868)
(3,033)
(3,901)
No finance costs have been 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.
TOPPS TILES PLC ANNUAL REPORT AND ACCOUNTS FOR THE 53-WEEK PERIOD ENDED 2 OCTOBER 2021
115
30525-Topps-Tiles-AR2021-Financials.indd 115
30525-Topps-Tiles-AR2021-Financials.indd 115
Job number 10 December 2021 5:09 pm V5
10/12/2021 17:09:56
10/12/2021 17:09:56
NOTES TO THE FINANCIAL STATEMENTS
FOR THE 53 WEEKS ENDED 2 OCTOBER 2021
7 Taxation
Current tax – debit/(credit) for the period
Current tax – adjustment in respect of previous periods
Deferred tax – debit/(credit) for the period (note 15)
Deferred tax – adjustment in respect of previous periods (note 15)
Effect of tax rate change on opening balance (note 15)
53 weeks
ended
2 October
2021
£’000
52 weeks
ended
26 September
2020
£’000
2,418
–
1,234
145
(427)
3,370
(48)
134
(2,028)
42
89
(1,811)
The charge for the period can be reconciled to the profit/(loss) per the statement of financial performance as follows:
Continuing operations:
Profit/(loss) before taxation
Tax at the UK corporation tax rate of 19.0% (2020: 19.0%)
Expenses that are not deductible in determining taxable profit
Other movements
Fixed asset timing differences
Difference between IFRS 2 and corporation tax relief
(Reduction)/increase in UK corporation tax rate
Non-taxable income
Tax effect of adjustment in respect of prior periods
Tax expense for the period
53 weeks
ended
2 October
2021
£’000
52 weeks
ended
26 September
2020
£’000
14,274
2,712
11
(36)
739
–
(29)
(172)
145
3,370
(9,829)
(1,868)
966
(49)
(1,104)
(7)
91
(17)
177
(1,811)
In the period, the Group has recognised a corporation tax credit directly to equity of £nil (2020: £nil) and a deferred tax charge to equity
of £46,701 (2020: £1,622) in relation to the Group’s share option schemes.
The Group continue to fully provide within current tax liabilities for a historic tax claim relating to EU loss relief in relation to the closed
Dutch business of £988,000 (2020: £957,000).
8 Dividends
Amounts recognised as distributions to equity holders in the period:
Final dividend for the period ended 26 September 2020 of £nil (2019: £0.023) per share
Interim dividend for the period ended 2 October 2021 of £nil (2020: £nil) per share
53 weeks
ended
2 October
2021
£’000
52 weeks
ended
26 September
2020
£’000
–
–
–
4,484
–
4,484
Proposed final dividend for the period ended 2 October 2021 of £0.031 (2020: £nil) per share
6,057
–
The proposed final dividend for the period ended 2 October 2021 is subject to approval by Shareholders at the Annual General Meeting
and has not been included as a liability in these financial statements.
116
TOPPS TILES PLC ANNUAL REPORT AND ACCOUNTS FOR THE 53-WEEK PERIOD ENDED 2 OCTOBER 2021
30525-Topps-Tiles-AR2021-Financials.indd 116
30525-Topps-Tiles-AR2021-Financials.indd 116
Job number 10 December 2021 5:09 pm V5
10/12/2021 17:09:56
10/12/2021 17:09:56
9 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.
53 weeks
ended
2 October
2021
Number
52 weeks
ended
26 September
2020
Number
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
Profit/(loss) for the period
Adjusting items
Adjusted profit for the period
Earnings per ordinary share – basic
Earnings per ordinary share – diluted
Earnings per ordinary share – adjusted
(1,344,844)
196,508,867 196,443,323
(1,472,264)
195,164,023 194,971,059
–
197,438,736 194,971,059
2,274,713
53 weeks
ended
2 October
2021
£’000
10,904
1,067
11,971
5.59p
5.52p
6.13p
52 weeks
ended
26 September
2020
£’000
(8,018)
11,076
3,058
(4.11)p
(4.11)p
1.57p
The calculation of the basic and diluted earnings per share used the denominators as shown above for both basic and diluted earnings
per share. The number of potentially exercisable shares is 2,274,713 (2020: 1,758,101 anti-dilutive shares).
Adjusted earnings per share were calculated after adjusting for the post-tax impact of the following items: rates relief from April 2020 to
September 2021 £1,839,000 benefit (2020: £nil), impairment of property, plant, equipment and movement in onerous lease provision
of £1,202,000 (2020: £1,781,000), vacant property costs for stores closed as part of store reduction programme of £1,704,000
(2020: £771,000), IFRS 16 one-off changes including the impairment of closure programme stores of £nil (2020: £2,474,000),
commercial impairment £nil (2020: £5,618,000) and restructuring costs £nil (2020: £432,000).
10 Goodwill
Cost
At 29 September 2019
At 26 September 2020
At 2 October 2021
Accumulated impairment losses
At 29 September 2019
Impairment losses in the period
At 26 September 2020
At 2 October 2021
Carrying amount
At 2 October 2021
At 26 September 2020
O
u
r
F
i
n
a
n
c
i
a
l
s
£’000
3,349
3,349
3,349
245
3,104
3,349
3,349
–
–
The balance of goodwill remaining was written down to £nil in the prior period. The carrying value previously held arose on the
acquisition of Parkside Ceramics Limited in 2017 and Strata Tiles Limited in 2019. The balance related to two cash-generating units
(CGUs). Goodwill of £1,216,000 (Parkside Ceramics Limited) related to one CGU, with the balance of £1,888,000 (Strata Tiles
Limited) relating to another CGU.
Where a balance exists, the Group tests goodwill annually for impairment or more frequently if there are indications that goodwill might
be impaired.
TOPPS TILES PLC ANNUAL REPORT AND ACCOUNTS FOR THE 53-WEEK PERIOD ENDED 2 OCTOBER 2021
117
30525-Topps-Tiles-AR2021-Financials.indd 117
30525-Topps-Tiles-AR2021-Financials.indd 117
Job number 10 December 2021 5:09 pm V5
10/12/2021 17:09:56
10/12/2021 17:09:56
NOTES TO THE FINANCIAL STATEMENTS
FOR THE 53 WEEKS ENDED 2 OCTOBER 2021
10 Goodwill continued
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.
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 of 1.5% 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. In the
prior period, discounted cash flows were calculated using a pre-tax rate of 16.5%.
11 Intangible Assets
Cost
At 29 September 2019
Additions
At 26 September 2020
Additions
At 2 October 2021
Accumulated amortisation and impairment
At 29 September 2019
Amortisation charge for the period
Impairment charge in the period
At 26 September 2020
Amortisation charge for the period
At 2 October 2021
Carrying amount
At 2 October 2021
At 26 September 2020
Brand
£’000
Customer
relationships
£’000
Software
£’000
Total
£’000
1,064
–
1,064
–
1,064
87
106
871
1,064
–
1,064
–
–
1,042
–
1,042
–
1,042
184
167
691
1,042
–
1,042
1,020
417
1,437
513
1,950
192
204
125
521
186
707
–
–
1,243
916
3,126
417
3,543
513
4,056
463
477
1,687
2,627
186
2,813
1,243
916
The brand and customer relationships additions occurred on the acquisition of Parkside Ceramics Limited on 31 August 2017 and the
acquisition of Strata Tiles Limited on 18 April 2019. These balances were written down to £nil in the prior period.
Software is amortised over its estimated useful life of four years. Amortisation is included within administrative costs within the Consolidated
Statement of Financial Performance.
118
TOPPS TILES PLC ANNUAL REPORT AND ACCOUNTS FOR THE 53-WEEK PERIOD ENDED 2 OCTOBER 2021
30525-Topps-Tiles-AR2021-Financials.indd 118
30525-Topps-Tiles-AR2021-Financials.indd 118
Job number 10 December 2021 5:09 pm V5
10/12/2021 17:09:56
10/12/2021 17:09:56
12a Property, Plant and Equipment
Cost
At 29 September 2019
Additions
Disposals
Reclassified to assets held for sale (note 12c)
At 26 September 2020
Additions
Disposals
At 2 October 2021
Accumulated depreciation
At 29 September 2019
Charge for the period
Provision of impairment
Eliminated on disposals
At 26 September 2020
Charge for the period
Reversal of impairment
Eliminated on disposals
At 2 October 2021
Carrying amount
At 2 October 2021
At 26 September 2020
Land and buildings
Freehold and
long leasehold
£’000
Short
leasehold
£’000
Fixtures and
fittings
£’000
Motor
vehicles
£’000
15,352
2,651
(14,047)
(2,344)
1,612
–
(308)
1,304
2,761
164
–
(2,657)
268
31
–
(10)
289
1,015
1,344
1,823
57
(314)
–
1,566
174
(187)
1,553
1,128
113
109
(263)
1,087
111
(84)
(109)
1,005
91,997
3,433
(8,627)
–
86,803
4,020
(4,414)
86,409
58,428
6,865
1,046
(4,876)
61,463
6,120
(520)
(2,748)
64,315
548
479
22,094
25,340
74
–
(2)
–
72
27
(63)
36
64
3
–
(2)
65
6
–
(58)
13
23
7
Total
£’000
109,246
6,141
(22,990)
(2,344)
90,053
4,221
(4,972)
89,302
62,381
7,145
1,155
(7,798)
62,883
6,268
(604)
(2,925)
65,622
23,680
27,170
Cumulative finance costs capitalised in the cost of tangible fixed assets amount to £nil (2020: £nil). Contractual commitments for the
acquisition of property, plant and equipment are detailed in note 26.
During the period, the Group has continued to review the performance of its store portfolio and as the fixtures and fittings within these
stores cannot be reused in other locations, the Group have provided for the net book value of the assets in relation to the seven stores
(2020: 16) that are impaired. The carrying value of these assets has been fully provided for in the period, with a decrease in the
provision of £604,000 in the period (2020: £1,155,000 increase in the provision) included within other operating expenses.
All assets classified as property, plant and equipment are UK based.
12b Investment Properties
At fair value
At 29 September 2019
Disposal
At 26 September 2020
At 2 October 2021
£’000
1,233
(1,233)
–
–
On 11 May 2020, the Group completed the sale of its only investment property to support the ongoing liquidity of the Group as the
Covid-19 pandemic unfolded.
O
u
r
F
i
n
a
n
c
i
a
l
s
TOPPS TILES PLC ANNUAL REPORT AND ACCOUNTS FOR THE 53-WEEK PERIOD ENDED 2 OCTOBER 2021
119
30525-Topps-Tiles-AR2021-Financials.indd 119
30525-Topps-Tiles-AR2021-Financials.indd 119
Job number 10 December 2021 5:09 pm V5
10/12/2021 17:09:56
10/12/2021 17:09:56
NOTES TO THE FINANCIAL STATEMENTS
FOR THE 53 WEEKS ENDED 2 OCTOBER 2021
12c Assets Classified as Held for Sale
Freehold properties reclassified from property, plant and equipment
Fair value adjustment for asset held for sale
Assets classified as held for sale
2021
£’000
–
–
–
2020
£’000
2,344
(558)
1,786
Two freehold properties were purchased in the prior year and subsequently reclassified as held for sale on 1 August 2020 in
accordance with IFRS 5 “Non-current Assets Held For Sale and Discontinued Operations”. The sale of both properties was completed
in October 2020. There was no gain or loss on disposal of these assets.
13 Subsidiaries
A list of all subsidiaries, including the name, country of incorporation and proportion of ownership interest is given in note 4 to the
Company only financial statements.
14 Leases
As a Lessee
Right-of-use assets included in the Consolidated Statement of Financial Position were as follows:
At transition: 29 September 2019
Additions
Disposals
Depreciation
Impairment
At 26 September 2020
Additions
Disposals
Depreciation
Impairment
At 2 October 2021
Lease liabilities included in the Consolidated Statement of Financial Position were as follows:
At transition: 29 September 2019
Additions
Disposals
Interest
Repayment of lease liabilities
At 26 September 2020
Additions
Disposals
Interest
Repayment of lease liabilities
At 2 October 2021
Land and
buildings
£’000
113,878
17,779
(3,267)
(19,591)
(5,411)
103,388
14,876
(3,010)
(19,018)
(2,402)
93,834
Land and
buildings
£’000
(124,414)
(20,803)
3,934
(2,960)
22,958
(121,285)
(15,220)
5,213
(3,678)
25,192
(109,778)
Equipment
£’000
3,818
541
–
(1,489)
–
2,870
204
–
(1,490)
–
1,584
Equipment
£’000
(3,831)
(528)
35
(73)
1,526
(2,871)
(201)
–
(50)
1,562
(1,560)
Total
£’000
117,696
18,320
(3,267)
(21,080)
(5,411)
106,258
15,080
(3,010)
(20,508)
(2,402)
95,418
Total
£’000
(128,245)
(21,331)
3,969
(3,033)
24,484
(124,156)
(15,421)
5,213
(3,728)
26,754
(111,338)
120
TOPPS TILES PLC ANNUAL REPORT AND ACCOUNTS FOR THE 53-WEEK PERIOD ENDED 2 OCTOBER 2021
30525-Topps-Tiles-AR2021-Financials.indd 120
30525-Topps-Tiles-AR2021-Financials.indd 120
Job number 10 December 2021 5:09 pm V5
10/12/2021 17:09:56
10/12/2021 17:09:56
14 Leases continued
The maturity analysis of the lease liabilities is as follows:
Current
Non-current
The remaining contractual maturities of the lease liabilities, which are gross and undiscounted, are as follows:
Less than one year
One to five years
More than five years
Total undiscounted lease liability
The following amounts have been recognised in the Consolidated Statement of Financial Performance:
2021
£’000
(19,521)
(91,817)
(111,338)
2020
£’000
(25,520)
(98,636)
(124,156)
2021
£’000
22,912
64,116
47,582
134,610
2020
£’000
26,810
68,449
52,274
147,533
Depreciation of right-of-use assets
Impairment of right-of-use assets
Interest expense
Expenses relating to short-term leases
Holdover lease expense
Depreciation of right-of-use assets
Impairment of right-of-use assets
Interest expense
Expenses relating to short-term leases
Holdover lease expense
Gain from sale and leaseback
Land and
buildings
2021
£’000
19,018
2,402
3,678
96
857
Land and
buildings
2020
£’000
19,591
5,411
2,960
93
928
(1,134)
Equipment
2021
£’000
1,490
–
50
–
–
Equipment
2020
£’000
1,489
–
73
98
–
-–
Total
2021
£’000
20,508
2,402
3,728
96
857
Total
2020
£’000
21,080
5,411
3,033
191
928
(1,134)
The total cash outflow for leases during the financial period was £26.8 million (2020: £24.5 million).
As a Lessor
Lease income from lease contracts in which the Group acts as a lessor is as below:
Lease income (from operating leases)
Finance income (from finance leases)
2021
£’000
413
76
2020
£’000
193
81
The Group leases out a small number of properties, some of which are classified as operating leases, as they do not transfer substantially
all of the risks and rewards incidental to the ownership of the assets.
O
u
r
F
i
n
a
n
c
i
a
l
s
TOPPS TILES PLC ANNUAL REPORT AND ACCOUNTS FOR THE 53-WEEK PERIOD ENDED 2 OCTOBER 2021
121
30525-Topps-Tiles-AR2021-Financials.indd 121
30525-Topps-Tiles-AR2021-Financials.indd 121
Job number 10 December 2021 5:09 pm V5
10/12/2021 17:09:57
10/12/2021 17:09:57
NOTES TO THE FINANCIAL STATEMENTS
FOR THE 53 WEEKS ENDED 2 OCTOBER 2021
14 Leases continued
The following table sets out a maturity analysis of lease payments, showing the undiscounted lease payments to be received after the
reporting date:
Less than one year
One to five years
More than five years
Total undiscounted lease payments receivable
2021
£’000
214
300
–
514
2020
£’000
111
82
–
193
Some of the properties that the Group leases out are classified as finance leases. These are shown as other financial assets on the
Consolidated Statement of Financial Position.
The following table sets out a maturity analysis of lease receivables, showing the undiscounted lease payments to be received after the
reporting date:
Less than one year
One to five years
More than five years
Total undiscounted lease payments receivable
Less: unearned finance income
Present value of minimum lease payments receivable
Current
Non-current
2021
£’000
582
1,511
1,048
3,141
(288)
2,853
518
2,335
2,853
2020
£’000
948
1,686
1,350
3,984
(362)
3,622
873
2,749
3,622
Impairment
At the end of the financial year the carrying value of assets, including right-of-use lease assets, was assessed against their recoverable
amount determined by reference to their value-in-use. Assets and expected cashflows were assessed at the lowest identifiable level of
cash-generating unit (‘CGU’) where the expected cash inflows and outflows of each CGU were expected to be independent of those
incurred by other CGUs. Individual retail stores are considered to be separate CGUs.
The value-in-use calculations require the application of a number of assumptions.
The key assumptions used in the estimation of recoverable amounts are set out below:
Assumption
Value
Sensitivity
Pre-tax discount rate
This is calculated by reference to the weighted
average cost of capital of the Group. At the year-end,
the pre-tax discount rate applied to forecast cashflows
was 14.8%.
An increase in pre-tax discount rate of 500bps at year-
end would result in an increase in value of impairments
of £0.3 million.
Long-term growth rate This is the average growth rate used to extrapolate
cash flows beyond the budget period. At the year-end,
a long-term growth rate of 1.5% was applied.
A decrease in the long-term growth rate of 150bps
at year-end would result in an increase in value of
impairments of £0.1 million.
Cash flow forecast
Cash flows are derived from extrapolation of trading
performance of identified CGUs. Key assumptions
include:
− expected year-on-year growth in cash contributions
CGU cash flows are expected to grow in each year
up to perpetuity. A reduction of 200bps to the forecast
cash flow growth rates would lead to an increase in
impairment for the year of £0.3 million.
for stores; and
− expected cashflows associated with the
replacement of leased assets expected to be
incurred on the maturity of lease terms for existing
leases.
A 10% increase in expected cash flows associated
with the replacement of leased assets at the end of
lease terms would increase impairments for the period
by £0.3 million.
122
TOPPS TILES PLC ANNUAL REPORT AND ACCOUNTS FOR THE 53-WEEK PERIOD ENDED 2 OCTOBER 2021
30525-Topps-Tiles-AR2021-Financials.indd 122
30525-Topps-Tiles-AR2021-Financials.indd 122
Job number 10 December 2021 5:09 pm V5
10/12/2021 17:09:57
10/12/2021 17:09:57
15 Deferred Tax Liabilities/(Assets)
The following are the deferred tax liabilities/(assets) recognised by the Group and movements thereon during the current and prior
reporting period:
Property
related items
£’000
Accelerated
tax depreciation
£’000
Share-based
payments
£’000
Stock
provisions
£’000
Intangible
assets
£’000
At 29 September 2019
(Credit)/charge to income
Charge in respect of previous periods
Effect of tax rate change on opening balance
Charge to equity
At 26 September 2020
(Credit)/charge to income
Charge in respect of previous periods
Effect of tax rate change on opening balance
Charge to equity
At 2 October 2021
(706)
(70)
107
–
(669)
149
48
(196)
–
(668)
1,018
(1,646)
42
(56)
–
(642)
1,340
97
(203)
–
592
(124)
34
–
–
2
(88)
(262)
–
(28)
47
(331)
(7)
–
–
–
–
(7)
7
–
–
–
–
310
(348)
–
38
–
–
–
–
–
–
–
Total
£’000
491
(2,030)
42
89
2
(1,406)
1,234
145
(427)
47
(407)
A UK corporation rate of 25% (effective 1 April 2025) was substantively enacted on 24 May 2021. This will increase the Company’s
future current tax charge accordingly. The deferred tax (asset)/liability at 2 October 2021 has been calculated at 25% (2020: 19%).
16 Inventories
Goods for resale
2021
£’000
2020
£’000
32,758
29,337
Goods for resale includes a net realisable value provision of £1,575,000 (2020: £2,261,000). Write-downs of inventories to net
realisable value amounted to £4,598,000 (2020: £4,332,000) and were recognised as an expense during the period, included within
cost of sales in the Consolidated Statement of Financial Performance.
17 Trade and Other Receivables
Amounts falling due within one year:
Amounts receivable for the sale of goods
Allowance for expected credit losses
Other debtors and prepayments
– Rent and rates
– Other
2021
£’000
1,829
(279)
1,089
1,899
4,538
2020
£’000
2,139
(155)
124
1,459
3,567
O
u
r
F
i
n
a
n
c
i
a
l
s
The Directors consider that the carrying amount of trade and other receivables at 2 October 2021 and 26 September 2020 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 expected credit losses/doubtful debts) held by the Group at 2 October 2021 amounted to £1.3 million
(2020: £2.0 million). These amounts mainly relate to sundry trade account generated sales. In relation to these sales, the average credit
period taken is 55 days (2020: 58 days) and no interest is charged on the receivables.
TOPPS TILES PLC ANNUAL REPORT AND ACCOUNTS FOR THE 53-WEEK PERIOD ENDED 2 OCTOBER 2021
123
30525-Topps-Tiles-AR2021-Financials.indd 123
30525-Topps-Tiles-AR2021-Financials.indd 123
Job number 10 December 2021 5:09 pm V5
10/12/2021 17:09:57
10/12/2021 17:09:57
NOTES TO THE FINANCIAL STATEMENTS
FOR THE 53 WEEKS ENDED 2 OCTOBER 2021
17 Trade and Other Receivables continued
The Group will write off, either partially or in full, the gross carrying amount of a financial asset when there is no realistic prospect of
recovery. This is usually the case when it is determined that the debtor does not have the assets or sources of income that could generate
sufficient cash flows to repay the amounts subject to the write-off.
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 £nil (2020: £nil), which are past due at the
reporting date for which the Group has not provided provisions for impairment as there has not been a significant change in credit quality
and the amounts are still considered recoverable. The Group does not hold any collateral over these balances.
The allowance for expected credit losses/allowance for doubtful debts was £279,000 by the end of the period (2020: £155,000).
Given the minimal receivable balance, the Directors believe that there is no further credit provision required in excess of the allowance for
expected credit losses/allowance for doubtful debts.
The Group applies the IFRS 9 simplified approach to measuring expected credit losses which uses a lifetime expected loss allowance for
all trade and other receivables and accrued income.
18 Cash and Cash Equivalents
Cash and cash equivalents comprise cash held by the Group and short-term bank deposits net of bank overdrafts, where there is a right of
offset, 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
2021
£’000
27,064
495
230
27,789
2020
£’000
28,862
1,701
456
31,018
Cash and cash equivalents are in the scope of the expected credit loss model under IFRS 9; however, balances are held with recognised
financial institutions and therefore the expected impairment loss is considered to be minimal.
19 Bank Loans
Bank loans (all sterling)
The borrowings are repayable as follows:
On demand or within one year
Less: total unamortised issue costs
Issue costs to be amortised within 12 months
Amount due for settlement within 12 months
2021
£’000
(106)
2021
£’000
2020
£’000
4,866
2020
£’000
–
5,000
(106)
(106)
36
–
(134)
4,866
115
4,981
124
TOPPS TILES PLC ANNUAL REPORT AND ACCOUNTS FOR THE 53-WEEK PERIOD ENDED 2 OCTOBER 2021
30525-Topps-Tiles-AR2021-Financials.indd 124
30525-Topps-Tiles-AR2021-Financials.indd 124
Job number 10 December 2021 5:09 pm V5
10/12/2021 17:09:57
10/12/2021 17:09:57
19 Bank Loans continued
The Directors consider that the carrying amount of the bank loan at 2 October 2021 and 26 September 2020 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
The Group borrowings are arranged at floating rates, thus exposing the Group to cash flow interest rate risk.
The following is a reconciliation of changes in financial liabilities to movement in cash from financing activities:
2021
%
–
2020
%
2.11
As at 29 September 2019
Repayment of bank loan
Drawdown of bank loan
Repayment of lease liabilities
Additions/disposals of lease liabilities
Interest accrued on lease liabilities
Issue costs incurred in the year
Amortisation of issue costs
As at 26 September 2020
Repayment of bank loan
Drawdown of bank loan
Repayment of lease liabilities
Additions/disposals of lease liabilities
Interest accrued on lease liabilities
Issue costs incurred in the year
Amortisation of issue costs
As at 2 October 2021
Lease
liabilities
£’000
128,245
–
–
(24,484)
17,362
3,033
–
–
124,156
–
–
(26,754)
10,208
3,728
–
–
111,338
Current
borrowings
£’000
Non-current
borrowings
£’000
Unamortised
issue costs
£’000
–
(1,000)
6,000
–
–
–
–
–
5,000
(5,000)
–
–
–
–
–
–
–
30,000
(44,000)
14,000
–
–
–
–
–
–
–
–
–
–
–
–
–
–
(238)
–
–
–
–
–
(22)
126
(134)
–
–
–
–
–
(98)
126
(106)
The Group has a revolving credit facility to June 2023 of £39.0 million. As at the financial period end, £nil of this was drawn
(2020: £nil). The loan facility contains financial covenants, which are tested on a bi-annual basis. The Group did not breach
any covenants in the period.
During the year, the Group repaid the remaining £5.0 million loan relating to the Coronavirus Large Business Interruption Loan Scheme
(‘CLBILS’), which facilitated access to finance for medium-sized and larger businesses affected by the coronavirus outbreak. The Group
had a credit facility to June 2021 of £10.0 million, which has now expired.
At 2 October 2021, the Group had available £39.0 million (2020: £44.0 million) of undrawn committed banking facilities.
O
u
r
F
i
n
a
n
c
i
a
l
s
TOPPS TILES PLC ANNUAL REPORT AND ACCOUNTS FOR THE 53-WEEK PERIOD ENDED 2 OCTOBER 2021
125
30525-Topps-Tiles-AR2021-Financials.indd 125
30525-Topps-Tiles-AR2021-Financials.indd 125
Job number 10 December 2021 5:09 pm V5
10/12/2021 17:09:57
10/12/2021 17:09:57
NOTES TO THE FINANCIAL STATEMENTS
FOR THE 53 WEEKS ENDED 2 OCTOBER 2021
20 Trade and Other Payables
Amounts falling due within one year
Trade payables
Other payables
Accruals
Deferred income
Contract liabilities
2021
£’000
2020
£’000
17,439
8,823
15,840
956
4,367
47,425
22,450
15,537
15,543
1,039
3,877
58,446
The 2020 contract liabilities have been restated by £776,000 to reallocate VAT to other payables.
Trade payables and accruals principally comprise amounts outstanding for trade purchases and ongoing costs. The average credit period
taken for trade purchases is 47 days (2020: 63 days). No interest is charged on these payables.
The Directors consider that the carrying amount of trade payables at 2 October 2021 and 26 September 2020 approximates to their fair
value on the basis of discounted cash flow analysis.
Accruals includes provisions for customer returns of £1,105,000 (2020: £1,129,000).
Deferred income relates to consideration for trader loyalty points earned but not yet redeemed. The value of deferred income as at
26 September 2020 that was recognised as revenue for the 53 weeks ended 2 October 2021 was £620,000.
Contract liabilities relate to deposits received from customers for orders not yet fulfilled. The value of contract liabilities as at
26 September 2020 that was recognised as revenue for the 53 weeks ended 2 October 2021 was £3,458,000.
21 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 2020. The
capital structure of the Group consists of debt, which includes the borrowings disclosed in note 19, cash and cash equivalents disclosed in
note 18 and equity attributable to equity holders of the parent, comprising issued capital, reserves and accumulated losses as disclosed in
notes 23 to 25 and in the Consolidated Statement of Changes in Equity.
The Group is not subject to any externally imposed capital requirements.
Significant Accounting Policies
Details of the significant accounting policies and methods adopted, including the criteria for recognition, the basis of measurement and the
basis on which income and expenses are recognised, in respect of each class of financial asset, financial liability and equity instrument,
are disclosed in note 2Q to the financial statements.
Categories of Financial Instruments
Financial assets
Amortised cost (including cash and cash equivalents)
Fair value through profit and loss
Financial liabilities
Amortised cost
Financial assets
Amortised cost (including cash and cash equivalents)
Fair value through profit and loss
Financial liabilities
Amortised cost
Carrying value
and fair value
2021
£’000
32,192
63
153,440
Carrying value
and fair value
Restated 2020
£’000
36,624
23
182,787
The 2020 financial liabiltiies have been restated by £776,000 to include VAT from contract liabilities.
126
TOPPS TILES PLC ANNUAL REPORT AND ACCOUNTS FOR THE 53-WEEK PERIOD ENDED 2 OCTOBER 2021
30525-Topps-Tiles-AR2021-Financials.indd 126
30525-Topps-Tiles-AR2021-Financials.indd 126
Job number 10 December 2021 5:09 pm V5
10/12/2021 17:09:57
10/12/2021 17:09:57
21 Financial Instruments continued
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
2021
£’000
238
495
2020
£’000
456
1,701
2021
£’000
2,876
155
2020
£’000
5,891
608
Foreign Currency Sensitivity Analysis
The Group is mainly exposed to the currency of China, India 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, based on historic volatility. 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
2021
£’000
240
31
(293)
(38)
2020
£’000
494
99
(604)
(121)
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
2021
£’000
10,867
2020
£’000
3,575
These arrangements are designed to address significant exchange exposures for the first half of 2022 and are renewed on a revolving
basis as required.
At 2 October 2021, the fair value of the Group’s currency derivatives is a gain of £63,006 within other debtors and prepayments (note
17) (2020: gain of £23,417 within other debtors and prepayments (note 17)).
Gains of £39,589 have been included in cost of sales during the period (2020: £65,097 gain).
O
u
r
F
i
n
a
n
c
i
a
l
s
TOPPS TILES PLC ANNUAL REPORT AND ACCOUNTS FOR THE 53-WEEK PERIOD ENDED 2 OCTOBER 2021
127
30525-Topps-Tiles-AR2021-Financials.indd 127
30525-Topps-Tiles-AR2021-Financials.indd 127
Job number 10 December 2021 5:09 pm V5
10/12/2021 17:09:57
10/12/2021 17:09:57
NOTES TO THE FINANCIAL STATEMENTS
FOR THE 53 WEEKS ENDED 2 OCTOBER 2021
21 Financial Instruments continued
Interest Rate Risk Management
The Group is exposed to interest rate risk as entities in the Group borrow funds at floating interest rates. 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.
During the year, no bank interest was due on the Group revolving credit facility, the interest payable on note 6 is relating to the unutilised
commitment fee on the facility.
(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
2021
£’000
–
2020
£’000
(146)
2021
£’000
–
2020
£’000
146
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. 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. Trade receivables are minimal, consisting of a number of sundry trade accounts;
further information is provided in note 17.
The carrying amount of financial assets recorded in the financial statements, which is net of expected credit 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
nil (2020: 2.11%) 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.
2021
Non-interest bearing
Lease liabilities
Variable interest rate instruments
2020
Non-interest bearing
Lease liabilities
Variable interest rate instruments
Less than
1 month
£’000
42,102
1,956
–
Less than
1 month
£’000
53,530
2,134
22
1–3
months
£’000
–
4,844
–
1–3
months
£’000
–
6,541
44
3 months
to 1 year
£’000
–
16,112
–
3 months
to 1 year
£’000
–
18,134
5,182
1–5
years
£’000
–
64,116
–
1–5
years
£’000
–
68,449
149
5+
years
£’000
–
47,582
–
5+
years
£’000
–
52,274
–
Total
£’000
42,102
134,610
–
Total
£’000
53,530
147,532
5,397
The 2020 non-interest bearing liabilities have been restated by £776,000 to include VAT from contract liabilities
128
TOPPS TILES PLC ANNUAL REPORT AND ACCOUNTS FOR THE 53-WEEK PERIOD ENDED 2 OCTOBER 2021
30525-Topps-Tiles-AR2021-Financials.indd 128
30525-Topps-Tiles-AR2021-Financials.indd 128
Job number 10 December 2021 5:09 pm V5
10/12/2021 17:09:57
10/12/2021 17:09:57
21 Financial Instruments continued
Fair Value of Financial Instruments
The Group is financed through a £39.0 million (2020: £39.0 million) revolving credit facility, of which £nil (2020: £nil) was utilised.
At the balance sheet date, the total unused amount of financing facilities was £39.0 million (2020: £39.0 million).
The Group expects to meet its other obligations from operating cash flows and proceeds of maturing financial assets.
The following table details the Group’s liquidity analysis for its derivative financial instruments. The table has been drawn up based on
the undiscounted net cash inflows/(outflows) on the derivative instruments that settle on a net basis and the undiscounted gross inflows
and (outflows) on those derivatives that require gross settlement. When the amount payable or receivable is not fixed, the amount
disclosed has been determined by reference to the projected interest and foreign currency rates as illustrated by the yield curves existing at
the reporting date.
2021
Foreign exchange forward contracts payments
Foreign exchange forward contracts receipts
2020
Foreign exchange forward contracts payments
Foreign exchange forward contracts receipts
Less than
1 month
£’000
(2,099)
2,094
Less than
1 month
£’000
(1,091)
1,098
1–3
months
£’000
(1,862)
1,875
1–3
months
£’000
(1,436)
1,441
3 months
to 1 year
£’000
(6,906)
6,962
3 months
to 1 year
£’000
(1,048)
1,059
1–5
years
£’000
–
–
1–5
years
£’000
–
–
5+
years
£’000
–
–
5+
years
£’000
–
–
Total
£’000
(10,867)
10,931
Total
£’000
(3,575)
3,598
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 (2020: 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).
22 Provisions
Dilapidations provision
Redemption liability
Current
Non-current
At 27 September 2020
Created in the year
Utilisation of provision
Release of provision in the period
At 2 October 2021
2021
£’000
2,322
–
2,322
353
1,969
2,322
Dilapidations
provision
£’000
Redemption
liability
£’000
2,209
517
(379)
(25)
2,322
120
40
(160)
–
–
O
u
r
F
i
n
a
n
c
i
a
l
s
2020
£’000
2,209
120
2,329
462
1,867
2,329
Total
£’000
2,329
557
(539)
(25)
2,322
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 lease term of the various properties (average of ten years, which includes an
estimation of future renewals after the current leases end).
The discount rate used to calculate the present value of property provisions is 5.5% (2020: 6.0%). A 10% reduction in discount rate would
lead to an increase in property provisions of £54,000 (2020: £53,000).
The Group purchased the remaining shares of Strata Tiles Limited during the period, therefore the redemption liability provision has been
fully utilised.
TOPPS TILES PLC ANNUAL REPORT AND ACCOUNTS FOR THE 53-WEEK PERIOD ENDED 2 OCTOBER 2021
129
30525-Topps-Tiles-AR2021-Financials.indd 129
30525-Topps-Tiles-AR2021-Financials.indd 129
Job number 10 December 2021 5:09 pm V5
10/12/2021 17:09:58
10/12/2021 17:09:58
NOTES TO THE FINANCIAL STATEMENTS
FOR THE 53 WEEKS ENDED 2 OCTOBER 2021
23 Share Capital
Allotted, issued and fully paid ordinary shares of 3.33p (2020: 3.33p)
At the start of the period
Issued in the period
At the end of the period
196,443,323 196,440,971
2,352
196,662,131 196,443,323
218,808
2021
Shares
2020
Shares
2021
£’000
6,548
7
6,555
2020
£’000
6,548
–
6,548
During the period, the Group issued 218,808 (2020: 2,352) ordinary shares with a nominal value of £7,294 (2020: £78) under share
option schemes for an aggregate cash consideration of £140,037 (2020: £2,100).
The authorised share capital of the Group is £8,000,000 (2020: £8,000,000), which consists of 240,000,000 ordinary shares
(2020: 240,000,000).
The holders of ordinary shares are entitled to receive dividends as declared from time to time and are entitled to one vote per share at
meetings of the Company. All shares rank equally with regard to the Company’s residual assets.
24 Share Premium
At start of the period
Premium on issue of new shares
At end of the period
25 Own Shares
At start of the period
Disposed of on issue in the period
At end of the period
2021
£’000
2,492
133
2,625
2021
£’000
(1,483)
267
(1,216)
2020
£’000
2,490
2
2,492
2020
£’000
(1,548)
65
(1,483)
A subsidiary of the Group holds 1,259,275 (2020: 1,470,517) shares with a nominal value of £1,216,479 acquired for an average
price of £0.97 per share (2020: £1,482,487 acquired for an average price of £1.01 per share) and therefore these have been classed
as own shares. These shares are held in an employee benefit trust.
26 Financial Commitments
a) Capital Commitments
At the end of the period, there were capital commitments contracted of £nil (2020: £nil).
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 £1,109,000 (2020: £994,000). At the period end, the Group holds outstanding contributions of £203,595
(2020: £216,673).
c) Lease Commitments
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
2021
2020
Land and
buildings
£’000
–
–
–
–
Other
£’000
–
–
–
–
Land and
buildings
£’000
23
–
–
23
Other
£’000
–
–
–
–
130
TOPPS TILES PLC ANNUAL REPORT AND ACCOUNTS FOR THE 53-WEEK PERIOD ENDED 2 OCTOBER 2021
30525-Topps-Tiles-AR2021-Financials.indd 130
30525-Topps-Tiles-AR2021-Financials.indd 130
Job number 10 December 2021 5:09 pm V5
10/12/2021 17:09:58
10/12/2021 17:09:58
27 Share-Based Payments
The Group operates four (2020: three) share option schemes in relation to Group employees; these are the employee share purchase
plans, the 2013 Long Term Incentive Plan, the 2020 Long Term Incentive Plan and the 2020 Restricted Stock Unit Plan.
Employee Share Purchase Plans
Employee share purchase plans are open to almost all employees and there no specific vesting conditions other than the requirement for
continued employee service. The share plans 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 purchased are
generally placed in the employee share savings plan for a three or five year period.
Movements in share-based payment plan options are summarised as follows:
Outstanding at beginning of the period
Issued during the period
Expired during the period
Forfeited during the period
Exercised during the period
Outstanding at end of the period
Exercisable at end of the period
2021
2020
Number
of share
options
Weighted
average
exercise price
£
Number
of share
options
Weighted
average
exercise price
£
4,339,091
3,058,326
(749,549)
(1,451,424)
(256,001)
4,940,443
–
0.59
4,752,154
0.46 1,634,712
0.74
(169,344)
0.55
(1,878,431)
0.62
–
0.50
4,339,091
–
440,975
0.61
0.60
1.27
0.59
–
0.59
0.70
During the financial period, the Group granted 3,058,326 share options under the existing share option scheme due to vest in April 2024
with a fair value of £603,132.
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
— %
— %
63.00
46.30
40.48
3.0
–0.0703
3.65
Expected volatility was determined by calculating the historical volatility of the Group’s share price over the previous three years
(2020: three years).
The weighted average remaining contractual life of the share options outstanding at the end of the period is 2.23 years
(2020: 1.93 years).
The exercise price for share options under the share save scheme range from 43 pence to 127 pence.
O
u
r
F
i
n
a
n
c
i
a
l
s
The weighted average share price at the date of exercise of options exercised during the year ended 2 October 2021 is 13.67 pence
(2020: nil pence).
TOPPS TILES PLC ANNUAL REPORT AND ACCOUNTS FOR THE 53-WEEK PERIOD ENDED 2 OCTOBER 2021
131
30525-Topps-Tiles-AR2021-Financials.indd 131
30525-Topps-Tiles-AR2021-Financials.indd 131
Job number 10 December 2021 5:09 pm V5
10/12/2021 17:09:58
10/12/2021 17:09:58
NOTES TO THE FINANCIAL STATEMENTS
FOR THE 53 WEEKS ENDED 2 OCTOBER 2021
27 Share-Based Payments continued
2013 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 which are detailed in the Remuneration Report.
Movements in the 2013 Long Term Incentive Plan options are summarised as follows:
Outstanding at beginning of the period
Issued during the period
Forfeited during the period
Exercised during the period
Outstanding at end of the period
Exercisable at end of the period
2021
2020
Number
of share
options
Weighted
average
exercise price
£
Number
of share
options
Weighted
average
exercise price
£
6,617,309
2,949,924
(2,822,392)
(179,674)
6,565,167
723,513
–
7,791,387
–
2,110,791
– (3,236,692)
–
–
–
(48,177)
6,617,309
903,188
–
–
–
–
–
–
During the financial period, the Group granted 2,949,924 share options under the existing share option scheme due to vest in December
2023 with a fair value of £1,431,156.
The inputs to the Black–Scholes model are as follows:
— pence
Weighted average share price
Weighted average exercise price — pence
Expected volatility
Expected life
Risk-free rate of interest
Dividend yield
— %
— years
— %
— %
55
Nil
41.29
3.00
–0.05
4.18
Expected volatility for the additional share options was determined by calculating the historical volatility of the Group’s share price over the
previous one, two and three years (2020: one, two and three years).
The weighted average remaining contractual life of share options outstanding at the end of the period is 7.72 years (2020: 7.64 years).
The weighted average share price at the date of exercise of options exercised during the year ended 2 October 2021 is 64.75 pence
(2020: 67.09 pence).
2020 Long Term Incentive Plan
Under the plan, a number of share options were granted to management level employees across the Group. These options were due to
vest in December 2020 subject to the achievement of certain performance criteria; however, these have not been met.
Movements in 2020 Long Term Incentive Plan options are summarised as follows:
Outstanding at beginning of the period
Forfeited during the period
Outstanding at end of the period
2021
2020
Number
of share
options
Weighted
average
exercise price
£
Number
of share
options
Weighted
average
exercise price
£
1,889,443
(1,889,443)
–
–
–
–
2,402,648
(513,205)
1,889,443
–
–
–
The weighted average remaining contractual life of share options outstanding at the end of the period is nil years (2020: 5.62 years)
132
TOPPS TILES PLC ANNUAL REPORT AND ACCOUNTS FOR THE 53-WEEK PERIOD ENDED 2 OCTOBER 2021
30525-Topps-Tiles-AR2021-Financials.indd 132
30525-Topps-Tiles-AR2021-Financials.indd 132
Job number 10 December 2021 5:09 pm V5
10/12/2021 17:09:58
10/12/2021 17:09:58
27 Share-Based Payments continued
2020 Restricted Stock Plan
Under the plan, a number of share options were granted to management level employees across the Group. There are three sets of
options that are due to vest in December 2021, December 2022 and December 2023.
Movements in 2020 Restricted Stock Plan options due to vest in December 2021 are summarised as follows:
Outstanding at beginning of the period
Issued during the period
Outstanding at end of the period
2021
2020
Weighted
average
exercise price
£
Number
of share
options
Weighted
average
exercise price
£
–
–
–
–
–
–
–
–
–
Number
of share
options
–
76,628
76,628
During the financial period, the Group granted 76,628 share options under the new share option scheme due to vest in December 2021
with a fair value of £40,419.
The inputs to the Black–Scholes model are as follows:
Weighted average share price
— pence
Weighted average exercise price — pence
Expected volatility
Expected life
Risk-free rate of interest
Dividend yield
— %
— years
— %
— %
55
Nil
57.54
1.00
–0.07
4.18
Expected volatility for the additional share options was determined by calculating the historical volatility of the Group’s share price over the
previous one, two and three years.
Movements in 2020 Restricted Stock Plan options due to vest in December 2022 are summarised as follows:
Outstanding at beginning of the period
Issued during the period
Outstanding at end of the period
2021
2020
Weighted
average
exercise price
£
Number
of share
options
Weighted
average
exercise price
£
–
–
–
–
–
–
–
–
–
Number
of share
options
–
153,329
153,329
During the financial period, the Group granted 153,329 share options under the new share option scheme due to vest in December 2022
with a fair value of £77,565.
The inputs to the Black–Scholes model are as follows:
Weighted average share price
— pence
Weighted average exercise price — pence
Expected volatility
Expected life
Risk-free rate of interest
Dividend yield
— %
— years
— %
— %
55
Nil
46.34
2.00
–0.06
4.18
Expected volatility for the additional share options was determined by calculating the historical volatility of the Group’s share price over the
previous one, two and three years.
O
u
r
F
i
n
a
n
c
i
a
l
s
TOPPS TILES PLC ANNUAL REPORT AND ACCOUNTS FOR THE 53-WEEK PERIOD ENDED 2 OCTOBER 2021
133
30525-Topps-Tiles-AR2021-Financials.indd 133
30525-Topps-Tiles-AR2021-Financials.indd 133
Job number 10 December 2021 5:09 pm V5
10/12/2021 17:09:58
10/12/2021 17:09:58
NOTES TO THE FINANCIAL STATEMENTS
FOR THE 53 WEEKS ENDED 2 OCTOBER 2021
27 Share-Based Payments continued
Movements in 2020 Restricted Stock Plan options due to vest in December 2023 are summarised as follows:
Outstanding at beginning of the period
Issued during the period
Outstanding at end of the period
2021
2020
Weighted
average
exercise price
£
Number
of share
options
Weighted
average
exercise price
£
–
–
–
–
–
–
–
–
–
Number
of share
options
–
229,888
229,888
During the financial period, the Group granted 229,888 share options under the new share option scheme due to vest in December
2023 with a fair value of £111,530.
The inputs to the Black–Scholes model are as follows:
Weighted average share price
— pence
Weighted average exercise price — pence
Expected volatility
Expected life
Risk-free rate of interest
Dividend yield
— %
— years
— %
— %
55
Nil
41.29
3.00
–0.05
4.18
Expected volatility for the additional share options was determined by calculating the historical volatility of the Group’s share price over the
previous one, two and three years.
The weighted average remaining contractual life of share options outstanding at the end of the period is 9.21 years (2020: 5.62 years),
In total, the Group recognised a total expense of £677,287 (2020: £3,290 expense) relating to share-based payments.
134
TOPPS TILES PLC ANNUAL REPORT AND ACCOUNTS FOR THE 53-WEEK PERIOD ENDED 2 OCTOBER 2021
30525-Topps-Tiles-AR2021-Financials.indd 134
30525-Topps-Tiles-AR2021-Financials.indd 134
Job number 10 December 2021 5:09 pm V5
10/12/2021 17:09:58
10/12/2021 17:09:58
28 Related Party Transactions
MS Galleon AG is a related party by virtue of their 20.0% shareholding (38,992,750 ordinary shares) in the Group’s issued share
capital (2020: 18.9% shareholding of 36,926,580 ordinary shares).
At 2 October 2021, MS Galleon AG is the owner of Cersanit, a supplier of ceramic tiles with whom the Group made purchases of
£460,000 during the year, which is 0.5% of cost of goods sold (2020: purchases of £142,000 during year, which is 0.2% of cost of
goods sold).
An amount of £60,000 was outstanding with Cersanit at 2 October 2021 (2020: £nil). All transactions were conducted on commercial
arm’s length terms.
S.K.M Williams is a related party by virtue of his close family relationship with key management in the prior year. In 2021 S.K.M.
Williams had a 9.3% shareholding of 18,160,278 ordinary shares in the Group’s issued share capital (2020: 10.1% shareholding of
19,660,278 ordinary shares).
At 2 October 2021 S.K.M. Williams was the landlord of one property leased to Multi Tile Limited, a trading subsidiary of Topps Tiles Plc,
for £61,000 (2020: one property for £59,000 per annum).
No amounts were outsanding with S.K.M. Williams at 2 October 2021 (2020: £nil). The lease agreement 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 £1.2 million
(2020: £1.0 million) including share-based payments of £nil (2020: £nil). Further information about the remuneration of the individual
Directors is provided in the Remuneration Report on pages 76 to 82.
O
u
r
F
i
n
a
n
c
i
a
l
s
TOPPS TILES PLC ANNUAL REPORT AND ACCOUNTS FOR THE 53-WEEK PERIOD ENDED 2 OCTOBER 2021
135
30525-Topps-Tiles-AR2021-Financials.indd 135
30525-Topps-Tiles-AR2021-Financials.indd 135
Job number 10 December 2021 5:09 pm V5
10/12/2021 17:09:58
10/12/2021 17:09:58
COMPANY BALANCE SHEET
AS AT 2 OCTOBER 2021
Notes
2021
£’000
Non-current assets
Investments
Right-of-use assets
Current assets
Debtors
Cash at bank and in hand
Creditors: amounts falling due within one year
Provisions
Net current assets
Non-current liabilities
Lease liabilities
Provisions
Total liabilities
Net assets
Capital and reserves
Called-up share capital
Share premium account
Share-based payment reserve
Capital redemption reserve
Other reserve
Profit and loss account
Equity Shareholders’ funds
4
8
5
6
7
8
7
9
10
2020
£’000
2,005
647
2,682
–
137,275
19,479
142,814
11,618
(88,936)
–
67,818
–
–
(88,936)
70,500
6,555
2,625
5,176
20,359
6,200
29,585
70,500
(89,013)
(120)
65,299
(169)
–
(89,302)
67,782
6,548
2,492
4,499
20,359
6,200
27,684
67,782
The Company made a profit after tax for the financial period ended 2 October 2021 of £1,901,000 (2020: £5,287,000).
The financial statements of the company, on pages 136 to 145, were approved by the Board of Directors on 10 December 2021 and
signed on its behalf by:
Rob Parker
Stephen Hopson
Directors
136
TOPPS TILES PLC ANNUAL REPORT AND ACCOUNTS FOR THE 53-WEEK PERIOD ENDED 2 OCTOBER 2021
30525-Topps-Tiles-AR2021-Financials.indd 136
30525-Topps-Tiles-AR2021-Financials.indd 136
Job number 10 December 2021 5:09 pm V5
10/12/2021 17:09:58
10/12/2021 17:09:58
COMPANY STATEMENT OF CHANGES IN EQUITY
FOR THE 53 WEEKS ENDED 2 OCTOBER 2021
Share
premium
account
£’000
2,490
–
–
2
–
2,492
–
–
133
Called-up
share
capital
£’000
6,548
–
–
–
–
6,548
–
–
7
–
Share-based
payment
reserve
£’000
Capital
redemption
reserve
£’000
4,496
–
20,359
–
–
–
3
–
–
–
Other
reserves
£’000
6,200
–
–
–
–
Profit
and loss
account
£’000
26,881
5,287
(4,484)
–
Total
£’000
66,974
5,287
(4,484)
2
–
3
4,499
–
20,359
–
6,200
–
27,684
1,901
67,782
1,901
–
–
–
677
–
–
–
–
–
–
–
–
–
–
140
677
Company
Balance at
29 September 2019
Profit for the period
Dividend paid to equity
Shareholders
Issue of new shares
Credit to equity for equity-settled
share-based payments
Balance at
26 September 2020
Profit for the period
Dividend paid to equity
Shareholders
Issue of new shares
Credit to equity for equity-settled
share-based payments
Balance at
2 October 2021
6,555
2,625
5,176
20,359
6,200
29,585
70,500
The other reserves comprise an unrealised gain arising on the disposal of certain trademarks to a subsidiary company. At 2 October 2021,
the Directors consider the other reserves of £6,200,000 to remain non-distributable.
O
u
r
F
i
n
a
n
c
i
a
l
s
TOPPS TILES PLC ANNUAL REPORT AND ACCOUNTS FOR THE 53-WEEK PERIOD ENDED 2 OCTOBER 2021
137
30525-Topps-Tiles-AR2021-Financials.indd 137
30525-Topps-Tiles-AR2021-Financials.indd 137
Job number 10 December 2021 5:09 pm V5
10/12/2021 17:09:58
10/12/2021 17:09:58
NOTES TO THE COMPANY FINANCIAL STATEMENTS
FOR THE 53 WEEKS ENDED 2 OCTOBER 2021
1 General Information and Basis of Accounting
Topps Tiles Plc is a private limited company, limited by shares, incorporated and domiciled in the United Kingdom under the Companies
Act 2006. The address of the registered office is given on page 53.
The financial statements of Topps Tiles Plc have been prepared in accordance with Financial Reporting Standard 101 Reduced Disclosure
Framework (‘FRS 101’) issued by the Financial Reporting Council (‘FRC’). These financial statements have also been prepared in
accordance with the Companies Act 2006 as applicable to companies using 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”
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 that 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 financial statements 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
26 September 2020.
2 Accounting Policies
The principal accounting policies adopted are set out below. These policies have been applied consistently, other than where new policies
have been adopted.
A) Going Concern
When considering the going concern assertion, the Board reviews several factors including a review of risks and uncertainties, the ability
of the Group to meet its banking covenants and operate within its banking facilities based on current financial plans, along with a detailed
review of a more pessimistic trading scenario that was deemed severe but plausible. The more pessimistic trading scenario was based
on a further national lockdown related to the Covid-19 pandemic during quarter 2 of FY22 that would see our Retail stores closed to
homeowners for a further three months.
The Group has already taken a number of actions to strengthen its liquidity during the Covid-19 pandemic, including the sale and
leaseback of the Group’s head office and central warehouse buildings in Enderby in June 2020. The going concern review also outlined
a range of other mitigating actions that could be taken in a severe but plausible trading scenario. These included, but were not limited
to, savings on store employee costs, savings on central support costs, reduced marketing activity, a reduction of capital expenditure,
management of working capital and suspension of the dividend.
The Group’s cash headroom and covenant compliance was reviewed against current lending facilities in both the base case and
the severe but plausible downside scenario. The current lending facility was refinanced in July 2018 and expires in July 2023. In all
scenarios, the Board have concluded that there is sufficient available liquidity and covenant headroom for the Company to continue to
meet all of its financial commitments as they fall due for the foreseeable future, a period of not less than 12 months from the date of this
report. Accordingly, the Board continue to adopt the going concern basis in preparing the financial statements.
B) Financial Period
The accounting period is drawn up to a Saturday within seven days of 30 September resulting in financial periods of either 52 or 53
weeks.
Throughout the financial statements, Directors’ Report and Strategic Report, references to 2021 mean “at 2 October 2021” or the 53
weeks then ended; references to 2020 mean “at 26 September 2020” or the 52 weeks then ended.
C) Taxation
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 Company intends to settle its current tax
assets and liabilities on a net basis.
D) Investments
Fixed asset investments are shown at cost less provision for impairment.
138
TOPPS TILES PLC ANNUAL REPORT AND ACCOUNTS FOR THE 53-WEEK PERIOD ENDED 2 OCTOBER 2021
30525-Topps-Tiles-AR2021-Financials.indd 138
30525-Topps-Tiles-AR2021-Financials.indd 138
Job number 10 December 2021 5:09 pm V5
10/12/2021 17:09:58
10/12/2021 17:09:58
2 Accounting Policies continued
E) Financial Instruments
Financial assets and financial liabilities are recognised in the Company’s statement of financial position when the Company 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’), financial
assets “at fair value through other comprehensive income” (‘FVOCI’), and financial assets carried at “amortised cost”. The classification of
financial assets under IFRS 9 is generally based on the business model in which a financial asset is managed and its contractual cash flow
characteristics.
Trade and Other Receivables
Trade and other receivables that have fixed or determinable payments that are not quoted in an active market are initially recognised at
fair value and then carried 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. The Company assesses on a forward-looking basis
the expected credit losses associated with its financial assets carried at amortised cost.
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 Company’s past experience of collecting payments, an increase in the number of delayed payments in the portfolio past the average
credit period, as well as observable changes in national or local economic conditions that correlate with default on receivables. The
Company applies the IFRS 9 simplified approach to measuring expected credit losses, which uses a lifetime expected loss allowance for
financial assets.
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. The Company will write off,
either partially or in full, the gross carrying amount of a financial asset when there is no realistic prospect of recovery. This is usually the
case when it is determined that the debtor does not have the assets or sources of income that could generate sufficient cash flows to repay
the amounts subject to the write-off.
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 Company 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 Company neither transfers nor
retains substantially all the risks and rewards of ownership and continues to control the transferred asset, the Company recognises its
retained interest in the asset and an associated liability for amounts it may have to pay. If the Company retains substantially all the risks
and rewards of ownership of a transferred financial asset, the Company continues to recognise the financial asset and also recognises
a collateralised borrowing for the proceeds received.
O
u
r
F
i
n
a
n
c
i
a
l
s
TOPPS TILES PLC ANNUAL REPORT AND ACCOUNTS FOR THE 53-WEEK PERIOD ENDED 2 OCTOBER 2021
139
30525-Topps-Tiles-AR2021-Financials.indd 139
30525-Topps-Tiles-AR2021-Financials.indd 139
Job number 10 December 2021 5:09 pm V5
10/12/2021 17:09:59
10/12/2021 17:09:59
NOTES TO THE COMPANY FINANCIAL STATEMENTS
FOR THE 53 WEEKS ENDED 2 OCTOBER 2021
2 Accounting Policies continued
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 Company after deducting all of its liabilities. Equity
instruments issued by the Company are recorded at the proceeds received, net of direct issue costs.
Financial liabilities that are classified as FVTPL relate to derivatives that is not designated and effective as a hedging instrument. Financial
liabilities at FVTPL are stated at fair value, with any resultant gain or loss recognised in profit or loss.
Other Financial Liabilities
Other financial liabilities, including borrowings, are initially measured at fair value, net of transaction costs. Other financial liabilities are
subsequently measured at amortised cost using the effective interest method, with interest expense recognised on an effective yield basis.
The effective interest method is a method of calculating the amortised cost of a financial liability and of allocating interest expense over the
relevant period. The effective interest rate is the rate that exactly discounts estimated future cash payments through the expected life of the
financial liability or, where appropriate, a shorter period, to the net carrying amount on initial recognition.
Derecognition of Financial Liabilities
The Company derecognises financial liabilities when, and only when, the Company’s obligations are discharged, cancelled or
they expire.
F) Dividends
Dividends payable are recorded in the financial statements in the year in which they are approved by the Company’s Shareholders.
G) Finance Income and Finance Costs
Interest receivable or payable is recognised on accrual basis.
H) Share-Based Payments
The Company has applied the requirements of IFRS 2 “Share-based Payments”.
The Company 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 Company’s estimate of shares that will
eventually vest. Fair value is measured by use of the Black–Scholes model.
The Company provides employees with the ability to purchase the Company’s ordinary shares at 80% of the current market value through
the operation of its Sharesave scheme. The Company 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.
I) Leases
The following policies apply subsequent to the date of initial application of IFRS 16, 29 September 2019.
Leases in which the Company is a Lessee
The Company leases assets that consist of properties, vehicles and equipment. Rental contracts are typically made for fixed periods but
may have extension options or break options to maximise operational flexibility. Lease terms are negotiated on an individual basis and
contain a wide range of different terms and conditions.
The Company assesses whether a contract is or contains a lease based on the new definition of a lease. Under IFRS 16, a contract is, or
contains, a lease if the contract conveys a right to control the use of an identified asset for a period of time in exchange for consideration.
At the commencement date of property leases the Company determines the lease term to be the full term of the lease, assuming that any
option to break or extend the lease is unlikely to be exercised. The Company considers the lease term to be the non-cancellable period
and in assessing this applies the definition of a contract and determines the period for which the contract is enforceable.
Under IFRS 16, the Company recognises right-of-use assets and lease liabilities for most leases.
The Company has elected to take advantage of the following recognition exemptions and account for lease payments as an expense on a
straight-line basis over the lease term or another systematic basis for the following two types of leases:
•
leases with a lease term of 12 months or less and containing no purchase options – this election is made by class of underlying asset;
and
•
leases where the underlying asset has a low value when new – this election can be made on a lease-by-lease basis.
For leases where the Company has taken short-term lease recognition exemption and there are any changes to the lease term or the lease
is modified, the Company accounts for the lease as a new lease.
140
TOPPS TILES PLC ANNUAL REPORT AND ACCOUNTS FOR THE 53-WEEK PERIOD ENDED 2 OCTOBER 2021
30525-Topps-Tiles-AR2021-Financials.indd 140
30525-Topps-Tiles-AR2021-Financials.indd 140
Job number 10 December 2021 5:09 pm V5
10/12/2021 17:09:59
10/12/2021 17:09:59
2 Accounting Policies continued
From 29 September 2019, leases are recognised as a right-of-use asset with a corresponding liability at the date at which the leased
asset is available for use by the Company. Each lease payment comprises an element of capital and finance cost. The finance cost is
charged to profit or loss over the lease period so as to produce a constant periodic rate of interest on the remaining balance of the liability
for each period. The right-of-use asset is depreciated over the shorter of the asset’s useful life and the lease term on a straight-line basis.
Assets and liabilities arising from a lease are initially measured on a present value basis. Lease liabilities include the net present value of
the following lease payments:
•
fixed payments (including in-substance fixed payments), less any lease incentives receivable;
• variable lease payments that are based on an index or a rate;
• amounts expected to be payable by the lessee under residual value guarantees;
•
the exercise price of a purchase option if the lessee is reasonably certain to exercise that option; and
• payments of penalties for terminating the lease if the lease term reflects the lessee exercising that option.
The lease payments are discounted using the interest rate implicit in the lease. If that rate cannot be determined, the lessee’s incremental
borrowing rate is used, being the rate that the lessee would have to pay to borrow the funds necessary to obtain an asset of similar value
in a similar economic environment with similar terms and conditions.
Right-of-use assets are measured at cost comprising the following:
•
the amount of the initial measurement of lease liability;
• any lease payments made at or before the commencement date less any lease incentives received;
• any initial direct costs; and
•
restoration costs.
After lease commencement, the Company measures right-of-use assets using a cost model. Under the cost model, a right-of-use asset is
measured at cost less accumulated depreciation and accumulated impairment.
Subsequent to initial measurement, lease liabilities increase as a result of interest charged at a constant rate on the balance outstanding
and are reduced for lease payments made. The lease liability is also remeasured to reflect changes in:
•
•
•
•
the lease term (using a revised discount rate);
the assessment of a purchase option (using a revised discount rate);
the amounts expected to be payable under residual value guarantees (using an unchanged discount rate); and
future lease payments resulting from a change in an index or a rate used to determine those payments (using an unchanged
discount rate).
The remeasurements are matched by adjustments to the right-of-use asset.
Lease modifications may also prompt remeasurement of the lease liability unless they are determined to be separate leases.
The right-of-use asset is subsequently depreciated using the straight-line method from the commencement date to the earlier of the end of
the useful life of the right-of-use asset or the end of lease term. The estimated useful lives of right-of-use assets are determined on the same
basis as those of property, plant and equipment. In addition, the right-of-use asset is reduced by impairment losses, if any, and adjusted for
certain remeasurements of the lease liability.
O
u
r
F
i
n
a
n
c
i
a
l
s
J) Critical Accounting Judgements and Key Sources of Estimation Uncertainty
In the application of the Company’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.
Critical Judgements in Applying the Company’s Accounting Policies
The Directors have concluded that there are no critical areas of accounting judgement in the application of the Company’s accounting
policies in the current period.
TOPPS TILES PLC ANNUAL REPORT AND ACCOUNTS FOR THE 53-WEEK PERIOD ENDED 2 OCTOBER 2021
141
30525-Topps-Tiles-AR2021-Financials.indd 141
30525-Topps-Tiles-AR2021-Financials.indd 141
Job number 10 December 2021 5:09 pm V5
10/12/2021 17:09:59
10/12/2021 17:09:59
NOTES TO THE COMPANY FINANCIAL STATEMENTS
FOR THE 53 WEEKS ENDED 2 OCTOBER 2021
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:
Incremental Borrowing Rate
Under IFRS 16, the Company recognises a right-of-use asset representing its right to use the underlying asset and a lease liability
representing its obligation to make lease payments. The lease liability is initially measured at the present value of the remaining lease
payments, discounted using the Company’s incremental borrowing rate, adjusted to take into account the risk associated with the length
of the lease. The incremental borrowing rate used by the Company is therefore considered to be a significant judgement.
Recoverability of Intercompany Balances
The Directors consider that the recoverability of intercompany balances is a key source of estimation uncertainty. The Company makes an
estimate of the recoverable amount of amounts receivable to group undertakings by performing an annual review of net assets and cash
flows for those group companies and have concluded all intercompany receivables remain recoverable at the period end.
The Company considers whether investments in subsidiary undertakings are impaired. Where an indication of impairment is identified
the estimation of recoverable value requires estimation of the recoverable value of the cash-generating units (‘CGUs’).
Climate Change
Climate change is a global challenge and an emerging risk to businesses, people and the environment across the world. We have a role
to play in limiting warming by improving our energy management, reducing our carbon emissions and by helping our customers do the
same. Growing awareness of climate change and changing customer demands will provide impetus for business growth as we provide
more environmentally sustainable products that use higher levels of recycled materials in production and reduce carbon emissions. As a
result, in our view climate change does not represent a material estimation uncertainty. For further detail see the Sustainability section of the
Strategic Report.
3 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 2 October 2021 of £1,901,000 (2020: £5,287,000).
The Auditor’s remuneration for services to the Company was £73,750 for audit-related work (2020: £49,000 for audit-related work).
Fees relating to non-audit work totalled £nil (2020: £nil); see note 4 to the Group financial statements for further details.
The Company had no employees other than the Directors (2020: same), whose remuneration is detailed on page 76.
4 Investments
Cost at 29 September 2019
Acquisition of subsidiary
Movement in share options granted to employees
Impairment of investments in subsidiaries
Cost at 26 September 2020
Acquisition of subsidiary
Movement in share options granted to employees
Impairment of investments in subsidiaries
Cost at 2 October 2021
£’000
7,154
75
3
(5,227)
2,005
154
677
(154)
2,682
142
TOPPS TILES PLC ANNUAL REPORT AND ACCOUNTS FOR THE 53-WEEK PERIOD ENDED 2 OCTOBER 2021
30525-Topps-Tiles-AR2021-Financials.indd 142
30525-Topps-Tiles-AR2021-Financials.indd 142
Job number 10 December 2021 5:09 pm V5
10/12/2021 17:09:59
10/12/2021 17:09:59
4 Investments continued
The following were subsidiaries that the Company has investments in, both as at 2 October 2021 and 26 September 2020:
Subsidiary undertaking
% of issued
shares held
Principal activity
100%
Topalpha Limited*
100%
Topalpha (Warehouse) Limited
100%
Topalpha (Stoke) Limited
100%
Tiles4less Limited*
100%
Topps Tiles (UK) Limited
100%
Topps Tiles Holdings Limited*
100%
Topps Tile Kingdom Limited
100%
Multi Tile Limited
100%
Topps Tiles Distribution Limited
100%
Multi-Tile Distribution Limited
Topps Tiles I.P Company Limited
100%
Topps Tiles Employee Benefit Trust* 100%
100%
Strata Tiles Limited*
100%
Parkside Ceramics Limited*
* Held directly by Topps Tiles Plc
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
Wholesale and distribution of ceramic tiles, wood flooring and related products
Intermediate holding company
Ownership and management of Group intellectual property
Employee benefit trust
Architectural ceramic sales and distribution
Commercial distribution of ceramic and porcelain tiles, natural stone and related products
The investments are represented by ordinary shares.
All undertakings are incorporated in Great Britain and are registered and operate in England and Wales.
The registered address of all of the above entities (excluding Strata Tiles Limited and Parkside Ceramics Limited) is Thorpe Way,
Grove Park, Enderby, Leicestershire, LE19 1SU, United Kingdom.
The registered address of Strata Tiles Limited and Parkside Ceramics Limited is Barnsdale Way, Enderby, Leicestershire, LE19 1SN,
United Kingdom.
For the year ended 2 October 2021, the subsidiary companies listed below are exempt from the requirements of the Companies
Act 2006 relating to the audit of individual financial statements by virtue of section 479A. As a result, the Company guarantees all
outstanding liabilities to which the subsidiary companies are subject.
Subsidiary undertaking
Topalpha Limited
Topalpha (Stoke) Limited
Tiles4less Limited
Topps Tiles Holdings Limited
Topps Tile Kingdom Limited
Topps Tiles Distribution Limited
Multi-Tile Distribution Limited
Topps Tiles I.P Company Limited
5 Debtors
Amounts owed by subsidiary undertakings
Prepayments
Other debtors
Company registration number
03150850
03714868
04123146
05840669
01697061
05236219
05008512
05235969
O
u
r
F
i
n
a
n
c
i
a
l
s
2021
£’000
135,844
22
1,409
137,275
2020
£’000
140,418
48
2,348
142,814
Amounts owed by subsidiary undertakings are interest free, repayable on demand and not subject to any security.
TOPPS TILES PLC ANNUAL REPORT AND ACCOUNTS FOR THE 53-WEEK PERIOD ENDED 2 OCTOBER 2021
143
30525-Topps-Tiles-AR2021-Financials.indd 143
30525-Topps-Tiles-AR2021-Financials.indd 143
Job number 10 December 2021 5:09 pm V5
10/12/2021 17:09:59
10/12/2021 17:09:59
NOTES TO THE COMPANY FINANCIAL STATEMENTS
FOR THE 53 WEEKS ENDED 2 OCTOBER 2021
6 Creditors: Amounts Falling Due Within One Year
Trade and other creditors
Amounts owed to subsidiary undertakings
Accruals
Lease liabilities
2021
£’001
550
85,448
2,938
–
88,936
2020
£’000
9,393
76,188
2,952
480
89,013
Amounts owed to subsidiary undertakings are interest free, repayable on demand and not subject to any security.
7 Provisions
The Company purchased the remaining shares of Strata Tiles Limited during the period, therefore the redemption liability provision has
been fully utilised.
8 Leases
As a Lessee
Right-of-use assets included in the Balance Sheet were as follows:
At transition: 29 September 2019
Additions
Depreciation
At 26 September 2020
Disposals
Depreciation
At 2 October 2021
Lease liabilities included in the Balance Sheet were as follows:
At transition: 29 September 2019
Additions
Interest
Repayment of lease liabilities
At 26 September 2020
Disposals
Interest
Repayment of lease liabilities
At 2 October 2021
The maturity analysis of the lease liabilities is as follows:
Current
Non-current
Equipment
£’000
1,114
86
(553)
647
(453)
(194)
–
Equipment
£’000
(1,106)
(87)
(19)
563
(649)
471
(2)
180
–
2020
£’000
(480)
(169)
(649)
2021
£’000
–
–
–
144
TOPPS TILES PLC ANNUAL REPORT AND ACCOUNTS FOR THE 53-WEEK PERIOD ENDED 2 OCTOBER 2021
30525-Topps-Tiles-AR2021-Financials.indd 144
30525-Topps-Tiles-AR2021-Financials.indd 144
Job number 10 December 2021 5:09 pm V5
10/12/2021 17:09:59
10/12/2021 17:09:59
8 Leases continued
The remaining contractual maturities of the lease liabilities, which are gross and undiscounted, are as follows:
Less than one year
One to five years
More than five years
Total undiscounted lease liability
The following amounts have been recognised in the profit and loss account:
Depreciation of right-of-use assets
Interest expense
Depreciation of right-of-use assets
Interest expense
The total cash outflow for leases during the financial period was £180,000 (2020: £563,000).
9 Called-Up Share Capital
Allotted, issued and fully paid 196,662,121 (2020: 196,443,323)
ordinary shares of 3.33p each (2020: 3.33p)
2021
£’000
–
–
–
–
2020
£’000
482
174
–
656
Equipment
2021
£’000
194
2
Equipment
2020
£’000
553
19
2021
£’000
2020
£’000
6,555
6,548
During the period, nil shares were purchased by Topps Tiles Employee Benefit Trust on behalf of the Group (2020: nil).
During the period, the Group issued and allotted 218,808 (2020: 2,352) ordinary shares with a nominal value of £7,294 (2020: £78)
under share option schemes for an aggregate cash consideration of £140,037 (2020: £2,100).
10 Other Reserves
The other reserves comprise an unrealised gain arising on the disposal of certain trademarks to a subsidiary company.
O
u
r
F
i
n
a
n
c
i
a
l
s
TOPPS TILES PLC ANNUAL REPORT AND ACCOUNTS FOR THE 53-WEEK PERIOD ENDED 2 OCTOBER 2021
145
30525-Topps-Tiles-AR2021-Financials.indd 145
30525-Topps-Tiles-AR2021-Financials.indd 145
Job number 10 December 2021 5:09 pm V5
10/12/2021 17:09:59
10/12/2021 17:09:59
ADDITIONAL
INFORMATION
30525-Topps-Tiles-AR2021-Financials.indd 146
30525-Topps-Tiles-AR2021-Financials.indd 146
Job number 10 December 2021 5:09 pm V5
10/12/2021 17:10:01
10/12/2021 17:10:01
1
CONTENTS
Five-year Record*
Notice of Annual General Meeting*
Explanatory Notes to the
Notice of Annual General Meeting*
The Team*
Store Locations*
* Unaudited
148
149
156
158
166
1
Everscape Inara Concrete
A
d
d
i
t
i
o
n
a
l
I
n
f
o
r
m
a
t
i
o
n
30525-Topps-Tiles-AR2021-Financials.indd 147
30525-Topps-Tiles-AR2021-Financials.indd 147
Job number 10 December 2021 5:09 pm V5
10/12/2021 17:10:03
10/12/2021 17:10:03
FIVE-YEAR RECORD
UNAUDITED
Group revenue
Group operating profit/(loss)
Profit/(loss) before taxation
Total equity
Basic earnings per share
Dividend per share
Dividend cover
Average number of employees
Share price (period end)
52 weeks
ended
30 September
2017
£’000
52 weeks
ended
29 September
2018
£’000
52 weeks
ended
28 September
2019
£’000
52 weeks
ended
26 September
2020
£’000
211,848
17,889
16,999
23,553
6.98p
3.40p
2.055
2,030
75.50p
216,887
13,735
12,688
26,663
5.00p
3.40p
1.475
2,114
62.90p
219,197
13,333
12,475
30,232
5.18p
3.40p
1.525
2,089
66.60p
192,813
(6,029)
(9,829)
14,054
(4.11)p
Nil
n/a
2,001
51.40p
53 weeks
ended
2 October
2021
£’000
227,997
18,345
14,274
25,574
5.59p
3.10p
1.85
1,847
65.60p
All figures quoted are inclusive of continued and discontinued operations.
148
TOPPS TILES PLC ANNUAL REPORT AND ACCOUNTS FOR THE 53-WEEK PERIOD ENDED 2 OCTOBER 2021
30525-Topps-Tiles-AR2021-Financials.indd 148
30525-Topps-Tiles-AR2021-Financials.indd 148
Job number 10 December 2021 5:09 pm V5
10/12/2021 17:10:03
10/12/2021 17:10:03
NOTICE OF ANNUAL GENERAL MEETING
STATEMENT FROM THE CHAIRMAN
OF THE BOARD
Dear Shareholder
Annual General Meeting
I am pleased to inform you that the Annual General Meeting (“Annual
General Meeting”, “AGM” or the “Meeting”) of Topps Tiles
Plc (“Topps Tiles” or the “Company”) will be held at 09.30 a.m.
on Wednesday 19 January 2022 at our Head Office, Thorpe Way,
Grove Park, Enderby, Leicestershire, LE19 1SU.
Notice of the Annual General Meeting, including the proposed
resolutions and explanatory notes is set out below.
Covid-19, meeting arrangements, voting and
engagement with Shareholders
We are keen to welcome Shareholders in person to our 2022 Annual
General Meeting, particularly given the constraints we faced in 2021
due to the COVID-19 pandemic. At present, we expect that it will be
possible under the UK Government’s guidelines to allow attendance
in person. However, the safety and wellbeing of our Shareholders
and colleagues continues to be of paramount importance. We are
therefore proposing to hold the Annual General Meeting at our Head
Office, Thorpe Way, Grove Park, Enderby, Leicestershire, LE19 1SU
and to welcome the maximum number of Shareholders we are able
to, within safety constraints and in accordance with Government
guidelines.
To ensure the safety and wellbeing of our Shareholders and
colleagues, we ask that Shareholders who wish to attend register
their intention to attend as soon as practicable and in any case,
no later than 09.30 a.m. on 12 January 2022, via email to
AGM@toppstiles.co.uk. Please include your name as shown on the
Company’s Register of Members.
Given the constantly evolving nature of the situation, we want to ensure
that we are able to adapt these arrangements efficiently to respond to
changes in circumstances. On this basis, should the situation change
such that we consider that it is no longer possible for Shareholders to
attend the meeting, we will make alternative arrangements and we
will notify Shareholders of the change on our website and a public
announcement via a Regulatory Information Service. Should we have
to change the arrangements in this way, it is likely that we will not
be in a position to accommodate Shareholders beyond the
minimum required to hold a quorate meeting which will be achieved
through the attendance of employee Shareholders. Any updates
to the position will be included on our website at
http://www.toppstilesplc.com/) (“Website”) and announced
through a Regulatory Information Service.
Please monitor the Company’s website
(http://www.toppstilesplc.com/) and regulatory news
announcements for any updates.
The Annual General Meeting is typically a good opportunity for
Shareholders to meet with the Directors, where they can provide
an update on the Company’s business and answer Shareholders’
questions. To ensure that Shareholders have an opportunity to engage
with the Board, this year the Board will be pleased to answer
questions proposed in advance of the Meeting. Please see the notes
on the following pages for details of when and how to ask questions
in advance
Given the uncertainty around whether Shareholders
will be able to attend the Annual General Meeting the
Board strongly recommends Shareholders to vote online
by proxy, appointing me, as the Chair of the meeting,
as your proxy regardless of whether you plan to attend
in person. This will ensure that your vote will be counted even if
attendance at the meeting is restricted or you are unable to attend.
Voting on all of the resolutions to be proposed at the Meeting will be
conducted by way of a poll rather than a show of hands. This is a
more transparent method of voting as Shareholders’ votes are counted
according to the number of shares registered in their names, rather than
according to the votes of Shareholders who attend the Annual General
Meeting. Shareholders will be asked to consider and vote on the
resolutions set out in the Notice of Annual General Meeting below. The
results will be published on our website www.toppstilesplc.com and they
will also be released to the London Stock Exchange via a Regulatory
Information Service. Please see the notes below for detail of when and
how to vote by proxy.
Communications
We encourage Shareholders to receive their copy of the Annual
Report and Accounts online. Therefore in accordance with the articles
of association and unless a Shareholder requests otherwise, the
Company communicates with its Shareholders by publishing information
(including statutory documents, such as the Annual Report and Accounts)
(“Shareholder Communications”) on its Website.
In accordance with this policy, Topps Tiles Plc has published the Annual
Report and Accounts 2021 on the Website. For those Shareholders
who are opted in to receive paper copies of any Shareholder
Communications, a copy of the Annual Report and Accounts 2021 has
been sent by post.
Any Shareholders wishing to receive paper copies of Shareholder
Communications should advise our Registrars, Link Group, on
0371 664 0300. Calls are charged at the standard geographic
rate and will vary by provider. Calls outside the United Kingdom will
be charged at the applicable international rate. The helpline is open
between 9.00 a.m. – 5.30 p.m. Monday to Friday excluding public
holidays in England and Wales.).
Website
Our corporate website (www.toppstilesplc.com) provides more
information about Topps Tiles including:
• a copy of our full Annual Report and Accounts; and
• all our latest news and regulatory announcements.
Recommendation
The Directors of the Company consider that all of the resolutions to
be proposed at the Meeting are in the best interests of the Company
and its Shareholders as a whole and are most likely to promote
the success of the Company for the benefit of the Shareholders as
a whole. The Directors unanimously recommend that Shareholders
vote in favour of all of the proposed resolutions as they intend to do
in respect of their own beneficial holdings currently amounting to
0.38% of the issued share capital of Topps Tiles.
Darren Shapland
Chairman, Topps Tiles Plc
A
d
d
i
t
i
o
n
a
l
I
n
f
o
r
m
a
t
i
o
n
TOPPS TILES PLC ANNUAL REPORT AND ACCOUNTS FOR THE 53-WEEK PERIOD ENDED 2 OCTOBER 2021
149
30525-Topps-Tiles-AR2021-Financials.indd 149
30525-Topps-Tiles-AR2021-Financials.indd 149
Job number 10 December 2021 5:09 pm V5
10/12/2021 17:10:03
10/12/2021 17:10:03
NOTICE OF ANNUAL GENERAL MEETING
Notice
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 on
Wednesday 19 January 2022 at 09.30 a.m. our Head Office,
Thorpe Way, Grove Park, Enderby, Leicestershire, LE19 1SU for the
following purposes:
Ordinary Business
To consider and vote on the following resolutions, 1– 11 (inclusive),
which will be proposed as Ordinary Resolutions:
1. To receive, consider and adopt the Company’s audited
financial statements for the financial period ended 2 October
2021, together with the Directors’ Report and the Auditors’
Report on those accounts (collectively the “Annual Report
and Accounts”).
2. To declare a final dividend of 3.1 pence per ordinary share for
the financial period ended 2 October 2021 payable on
31 January 2022.
3. To approve the Directors’ Remuneration Report for the financial
period ended 2 October 2021 which is set out on pages 74
to 89 within the Annual Report and Accounts (excluding the
Directors’ Remuneration Policy which is which is set out on
pages 83 to 89).
4. To re-elect Darren Shapland as a Director of the Company.
5. To re-elect Robert Parker as a Director of the Company.
6. To re-elect Stephen Hopson as a Director of the Company.
7. To re-elect Keith Down as a Director of the Company.
8. To elect Diana Breeze as a Director of the Company, who
having been appointed since the last Annual General Meeting
offers herself for election in accordance with the Company’s
articles of association.
9. To elect Kari Daniels Director of the Company, who having
been appointed since the last Annual General Meeting offers
herself for election in accordance with the Company’s articles of
association.
10. To re-appoint PricewaterhouseCoopers LLP as the auditors 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
auditors.
Special Business
To consider and vote on the following resolutions, which in the case
of resolution 12 will be proposed as an Ordinary Resolution and
in the case of resolutions 13 to 16 (inclusive), 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 £2,185,354 (such amount
to be reduced by the nominal amount of any allotments
or grants made under paragraph (b) below in excess of
£2,185,354); and further:
b. to allot equity securities (as defined in section 560 of the
Act) up to an aggregate nominal amount of £4,370,707
(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
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.
150
TOPPS TILES PLC ANNUAL REPORT AND ACCOUNTS FOR THE 53-WEEK PERIOD ENDED 2 OCTOBER 2021
30525-Topps-Tiles-AR2021-Financials.indd 150
30525-Topps-Tiles-AR2021-Financials.indd 150
Job number 10 December 2021 5:09 pm V5
10/12/2021 17:10:03
10/12/2021 17:10:03
13. 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 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
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.
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:
ii. to holders of any other equity securities as required by
the rights of those securities or as the Directors otherwise
consider necessary,
a. the maximum number of Ordinary Shares hereby authorised
to be purchased is 19,668,182 (representing 10% of the
Company’s issued Ordinary Share capital);
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 £327,803; 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 substitution for any equivalent authorities and powers
granted to the Directors prior to the passing of this resolution
the Directors be and they are empowered, in addition to the
authorities and powers granted to the Directors pursuant to
resolution 13, 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 £327,803; and
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 general meeting other than an annual general meeting
may be called on not less than 14 clear days’ notice.
Dated: 13 December 2021
By order of the Board
Alistair Hodder
Company Secretary
Registered Office:
Thorpe Way
Grove Park
Enderby
Leicestershire
LE19 1SU
Registered Number: 3213782
A
d
d
i
t
i
o
n
a
l
I
n
f
o
r
m
a
t
i
o
n
TOPPS TILES PLC ANNUAL REPORT AND ACCOUNTS FOR THE 53-WEEK PERIOD ENDED 2 OCTOBER 2021
151
30525-Topps-Tiles-AR2021-Financials.indd 151
30525-Topps-Tiles-AR2021-Financials.indd 151
Job number 10 December 2021 5:09 pm V5
10/12/2021 17:10:03
10/12/2021 17:10:03
NOTICE OF ANNUAL GENERAL MEETING
NOTES
Entitlement to Attend and Vote
1. Pursuant to Part 13 of the Companies Act 2006 and to
Regulation 41 of the Uncertificated Securities Regulations 2001
(as amended), only those members registered in the register
of members of the Company at 09.30 a.m. on 17 January
2022 (or if the Annual General Meeting is adjourned, 48
hours before the time fixed for the adjourned Annual General
Meeting) shall be entitled to attend and vote at the Annual
General Meeting in respect of the number of shares registered
in their name at that time. In each case, changes to the register
of members after such time shall be disregarded in determining
the rights of any person to attend or vote at the Annual General
Meeting.
2. Shareholders wishing to attend the meeting, should this be
possible, are asked to register their attendance as soon as
practicable and in any case, no later than 09.30 a.m. on
12 January 2022, via email to AGM@toppstiles.co.uk. Please
include your name as shown on the Company’s Register of
Members. Rules around capacity at the venue and changes in
health and safety requirements may mean Shareholders cannot
ultimately attend the meeting.
3. Given the uncertainty around whether Shareholders will be
able to attend the Annual General Meeting, whether because
the capacity at the venue does not allow for safety reasons
related to COVID-19 restrictions or due to a change in the
situation with the COVID-19 pandemic or a change to UK
Government Guidelines, we recommend that all Shareholders
vote online by proxy, appointing the Chair of the meeting as
your proxy regardless of whether you plan to attend in person.
This will ensure that your vote is counted even if attendance at
the meeting is restricted or you or any other proxy you might
appoint are unable to attend in person. See below for details of
when and how to vote by proxy.
4. Voting by proxy will not prevent a member attending the Annual
General Meeting and voting in person if the member wishes
to do so, whether electronically or in person at the physical
meeting should this be permitted under applicable COVID-19
restrictions.
5. All Shareholders are strongly encouraged to submit their
voting instructions online by proxy appointing the Chair of the
Meeting as their proxy. Only persons entered on the register
of Shareholders at 09.30 a.m. on 17 January 2022 (or, if the
Meeting is adjourned, at close of business on the day two days
(excluding non-working days) prior to the adjourned Meeting)
(“Shareholders”) shall be entitled to attend and vote at the
Meeting. Changes to the register of members after this date
shall be disregarded in determining the rights of any person to
vote at the Meeting.
Website Giving Information Regarding the Meeting
6. Information regarding the Meeting, including the information
required by section 311A of the Act, can be found on our
website at www.toppstilesplc.com.
Appointment of Proxies, Generally
7. A Shareholder is entitled to appoint one or more persons as
proxies to exercise their rights to attend, speak and vote at the
Meeting. A proxy need not be a member of the Company. 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 them.
However, given the uncertainty around whether shareholders
will be able to attend the Annual General Meeting the Board
strongly recommends you appoint the Chair of the Meeting as
your proxy as, in certain circumstances, other proxies may not
be permitted to attend on your behalf.
8. Shareholders can register their proxy appointment and give
proxy instructions to vote:
• online through www.Signalshares.com;
•
if a CREST member, by utilising the CREST online proxy
appointment service;
• by returning a Proxy Form by post.
See below for notes on when and how to do this and please
refer to the terms and conditions of the online services on their
websites.
9. Given the uncertainty around attendance at the Annual General
Meeting, whether because the capacity at the venue does not
allow for safety reasons related to COVID-19 restrictions or due
to a change in the situation with the COVID-19 pandemic or a
change to UK Government Guidelines, we recommend that all
Shareholders vote online by proxy, appointing the Chair of the
meeting as your proxy.
10. If you submit your proxy form online or by post,
you must ensure that it reaches Link Group by
09.30 a.m. on 17 January 2022 in order for your
vote to be counted. Should you complete your proxy form
online and then post a hard copy, the form that arrives last
will be counted to the exclusion of instructions received earlier,
whether online or posted.
11. A proxy does not need to be a Shareholder but must be duly
appointed to represent a Shareholder. Shareholders can only
appoint a proxy using the procedures set out in these notes,
the notes to the Proxy Form and on the signalshares and Crest
websites.
12. The appointment of a proxy will not prevent a Shareholder
from attending and voting in person at the Meeting. Should a
Shareholder do this, the votes at the Meeting will be counted
to the exclusion of instructions received earlier, whether online
or posted. However, as noted above, given the
uncertainty around whether Shareholders will
be able to attend the Annual General Meeting
the Board strongly recommends Shareholders to
vote online by proxy, appointing the Chair of the
meeting, as their proxy regardless of whether
they plan to attend in person. This will ensure that
your vote will be counted even if attendance at the meeting is
restricted or you are unable to attend.
152
TOPPS TILES PLC ANNUAL REPORT AND ACCOUNTS FOR THE 53-WEEK PERIOD ENDED 2 OCTOBER 2021
30525-Topps-Tiles-AR2021-Financials.indd 152
30525-Topps-Tiles-AR2021-Financials.indd 152
Job number 10 December 2021 5:09 pm V5
10/12/2021 17:10:03
10/12/2021 17:10:03
13. If you are not a Shareholder of the Company but you have
been nominated by a Shareholder of the Company to enjoy
information rights, you do not have a right to appoint any
proxies under the procedures set out in this “Appointment of
proxies” section. Please read the section “Nominated persons”
below.
Appointment of Proxies, Signalshares
14. Unless you are a CREST member, you are strongly encouraged
to use the Electronic Proxy Appointment (“EPA”) for the Annual
General Meeting (even if you receive a paper proxy form).
EPA enables Shareholders to lodge their proxy appointment by
online means via a website provided by our Registrar, at www.
signalshares.com. Full details of the procedures are given on
that website.
15. For an online proxy appointment to be valid, the appointment
must be received by Link Group no later than 09.30 a.m. on
17 January 2022 (or, if the Meeting is adjourned, no later
than 48 hours before the time of any adjourned Meeting). Any
online communication sent by a Shareholder to the Company
or Link Group which is found to contain a virus will not be
accepted by the Company but every effort will be made
by the Company to inform the Shareholder of the rejected
communication.
Appointment of Proxies, through CREST
16. CREST members who wish to appoint a proxy or proxies
through the CREST online 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 (09.30 a.m. on
17 January 2022). For this purpose, the time of receipt will
be taken to be the time (as determined by the timestamp
applied to the message by the CREST Applications Host)
from which the registrars are able to retrieve the message
by enquiry to CREST in the manner prescribed by CREST.
After this time, any change of instructions to proxies
appointed through CREST should be communicated to the
appointee through other means.
• CREST members and, where applicable, their CREST
sponsors or voting service provider(s) should note that
Euroclear UK & Ireland Limited does not make available
special procedures in CREST for any particular messages.
Normal system timings and limitations will therefore
apply in relation to the input of CREST Proxy Instructions.
It is the responsibility of the CREST member concerned
to take (or, if the CREST member is a CREST personal
member or sponsored member or has appointed a voting
service provider(s), to procure that their 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).
Appointment of Proxies, by Post
17. A Proxy Form is only available on request from our Registrars,
Link Group, who will issue a Proxy Form free of charge to
Shareholder who requests one. You can call them on
0371 664 0300. Calls are charged at the standard
geographic rate and will vary by provider. Calls outside the
United Kingdom will be charged at the applicable international
rate. The helpline is open between 9.00 a.m. – 5.30 p.m.
Monday to Friday excluding public holidays in England and
Wales. 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 Group, Central Square,
10th Floor, 29 Wellington Street, Leeds, LS1 4DL 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 09.30 a.m. on 17 January 2022
(or, in the event that the Meeting is adjourned, no later than
two working days before the time of any adjourned meeting).
Please allow enough time to receive your Proxy Form by post,
complete it and return it to Link Group.
Appointment of Proxies, by Joint Holders
18. In the case of joint holders, where more than one of the joint
holders completes a proxy appointment, 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).
A
d
d
i
t
i
o
n
a
l
I
n
f
o
r
m
a
t
i
o
n
TOPPS TILES PLC ANNUAL REPORT AND ACCOUNTS FOR THE 53-WEEK PERIOD ENDED 2 OCTOBER 2021
153
30525-Topps-Tiles-AR2021-Financials.indd 153
30525-Topps-Tiles-AR2021-Financials.indd 153
Job number 10 December 2021 5:09 pm V5
10/12/2021 17:10:03
10/12/2021 17:10:03
NOTICE OF ANNUAL GENERAL MEETING
Changing Proxy Instructions
19. Shareholders may change proxy instructions by submitting
Issued Shares and Total Voting Rights
23. As at the close of business on 7 December 2021, the
a new proxy appointment using the methods set out above.
Note that the cut-off time for receipt of proxy appointments
also applies in relation to amended instructions; any amended
proxy appointment received after the relevant cut-off time
will be disregarded. If you submit more than one valid proxy
appointment, the appointment received last before the latest
time for the receipt of proxies will take precedence.
Termination of Proxy Appointment
20. A Shareholder may revoke a proxy instruction but to do so
you will need to inform the Company in writing by sending a
signed hard-copy notice clearly stating your intention to revoke
your proxy appointment to the Registrar at Link Group, Central
Square, 10th Floor, 29 Wellington Street, Leeds, LS1 4DL. In
the case of a Shareholder which is a company, the revocation
notice must be executed under its common seal or signed on
its behalf by an officer of the company or an attorney for the
company. Any power of attorney or any other authority under
which the revocation notice is signed (or a duly certified copy
of such power or authority) must be included with the revocation
notice. In either case, the revocation notice must be received
by the Registrar no later than 09.30 a.m. on 17 January
2022. If you attempt to revoke your proxy appointment but
the revocation is received after this time your original proxy
appointment will remain valid unless you attend the Meeting
and vote in person. However, as noted above, given
the uncertainty around whether Shareholders will
be able to attend the Annual General Meeting
the Board strongly recommends Shareholders to
vote online by proxy, appointing the Chair of the
meeting, as their proxy regardless of whether
they plan to attend in person.
Votes Withheld
21. 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 their 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.
Companies and Other Shareholders (not being individuals)
22. A Shareholder that is a company or other organisation not
having a physical presence cannot attend in person but can
appoint someone to represent it. This can be done in one of
two ways: either by the appointment of a proxy (as described
above); or by a corporate representative. Members considering
the appointment of a corporate representative should check
their own legal position, the Company’s Articles of Association
(the “Articles”) and the relevant provision of the Act.
Company’s issued share capital comprised 196,681,818
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 1,259,275 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 7 December 2021, is 195,422,543
Questions at the Meeting
24. Shareholders have the right to ask questions at the Meeting in
accordance with section 319A of the Act
25. Shareholders are encouraged to submit questions via email to
AGM@toppstiles.co.uk, by 09.30 a.m. on Monday
17 January 2022. Please include your name as shown on the
Company’s Register of Members. The Company must answer
any question you ask relating to the business being dealt with at
the Meeting unless:
• answering the question would interfere unduly with the
preparation for the Meeting or involve the disclosure of
confidential information; or
•
•
the answer has already been given on a website in the
form of an answer to a question; or
it is undesirable in the interests of the Company or the good
order of the Meeting that the question be answered.
Website Publication of Audit Concerns
26. It is possible that, pursuant to requests made by one or more
Shareholders 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 Auditors’ 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
auditors 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. Where a Shareholder or Shareholders wish to request
the Company to publish audit concerns, such request be must
be made by either sending
• a request which states your full name and address to
AGM@toppstiles.co.uk. Please state “AGM” in the subject
line of the email; or
• a hard-copy request which is signed by you and states your
full name and address to the Company Secretary at Topps
Tiles Plc, Topps Tiles, Thorpe Way, Grove Park, Enderby,
Leicestershire, LE19 1SU.
154
TOPPS TILES PLC ANNUAL REPORT AND ACCOUNTS FOR THE 53-WEEK PERIOD ENDED 2 OCTOBER 2021
30525-Topps-Tiles-AR2021-Financials.indd 154
30525-Topps-Tiles-AR2021-Financials.indd 154
Job number 10 December 2021 5:09 pm V5
10/12/2021 17:10:03
10/12/2021 17:10:03
Nominated Persons
27. 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”):
•
•
the nominee may have a right under an agreement between
the nominee and the member by whom he was appointed,
to be appointed, or to have someone else appointed, as a
proxy for the Meeting; or
if the nominee does not have any such right or does not
wish to exercise such right, the nominee may have a
right under any such agreement to give instructions to the
member as to the exercise of voting rights.
The right of a member under section 324 of the Act to appoint
a proxy does not apply to a person nominated to enjoy
information rights under section 146 of the Act.
Voting
28. Voting on all resolutions will be conducted by way of a poll
rather than a show of hands. This is a more transparent method
of voting as Shareholders’ votes are counted according to
the number of shares registered in their names, rather than
according to the votes of Shareholders who attend the Annual
General Meeting.
Members Rights
29. In accordance with section 338 of the Act, a member or
members of the Company may (provided that the criteria set
out in section 338(3) of the Act are met) require the Company
to give to members notice of a resolution which may properly
be moved and is intended to be moved at the Annual General
Meeting, provided that: (a) the resolution must not be, if
passed, ineffective (whether by reason of inconsistency with any
enactment or the Company’s constitution or otherwise); and (b)
the resolution must not be defamatory of any person, frivolous
or vexatious. Such a request may be in hard copy form or in
electronic form, must be authenticated by the person or persons
making it, must identify the resolution of which notice is to be
given and must be received by the Company not later than 6
weeks before the Annual General Meeting, or, if later, the time
at which notice is given of the Annual General Meeting. (In
the foregoing sentence, the terms “hard copy form”, “electronic
form” and “authenticated” bear their respective meanings set
out in the Act in relation to a communication, or a document or
information sent or supplied, to a company.)
30. In accordance with section 338A of the Act, a member or
members of the Company may (provided that the criteria set out
in section 338A(3) of the Act are met) require the Company to
include in the business to be dealt with at the Annual General
Meeting a matter (other than a proposed resolution) which may
properly be included in the business of the Annual General
Meeting, provided that the matter is not defamatory of any
person, frivolous or vexatious. A request may be in hard copy
form or electronic form, must identify the matter to be included
in the business, must be accompanied by a statement setting out
the grounds for the request, must be authenticated by the person
or persons making it and must be received by the Company
not later than 6 weeks before the Annual General Meeting, or,
if later, the time at which notice is given of the Annual General
Meeting. (In the foregoing sentence, the terms “hard copy
form”, “electronic form” and “authenticated” bear the respective
meanings set out in the Act in relation to a communication, or a
document or information sent or supplied, to a company.)
Further Information
31. Link Group maintain the Company’s share register. They also
provide a telephone helpline service on 0371 664 0300. If
you have any queries about voting or about your shareholding,
please contact Link Group. Calls are charged at the standard
geographic rate and will vary by provider. Calls outside the
United Kingdom will be charged at the applicable international
rate. The helpline is open between 9.00 a.m. – 5.30 p.m.
Monday to Friday excluding public holidays in England
and Wales.
Documents on Display
32. The following documents are available for inspection at the
registered office of the Company during the usual business
hours on any weekday (Saturday, Sunday or public holidays
excluded) from the date of this notice until the conclusion of
the Annual General Meeting and will also be available for
inspection at the place of the Annual General Meeting not less
than 15 minutes prior to and during the meeting:
• copies of the executive directors’ service contracts with the
Company and any of its subsidiary undertakings; and
•
letters of appointment of the non-executive directors.
33. Information regarding the Meeting, including the information
required by section 311A of the Act, can be found at
www.toppstilesplc.com. In addition, this information is available
for inspection at the Company’s registered office during
normal business hours by prior appointment with the Company
Secretary. Requests should be sent to AGM@toppstiles.co.uk.
Communication
34. You may not use any online address provided either in this
Notice of Annual General Meeting or in any related documents
(including the proxy form and the signalshares and Crest
websites) to communicate with the Company for any purposes
other than those expressly stated.
A
d
d
i
t
i
o
n
a
l
I
n
f
o
r
m
a
t
i
o
n
TOPPS TILES PLC ANNUAL REPORT AND ACCOUNTS FOR THE 53-WEEK PERIOD ENDED 2 OCTOBER 2021
155
30525-Topps-Tiles-AR2021-Financials.indd 155
30525-Topps-Tiles-AR2021-Financials.indd 155
Job number 10 December 2021 5:09 pm V5
10/12/2021 17:10:04
10/12/2021 17:10:04
EXPLANATORY NOTES TO THE NOTICE OF
ANNUAL GENERAL MEETING
Resolution 10
Appointment of Auditors
This resolution concerns the reappointment of
PricewaterhouseCoopers LLP as auditors until the conclusion of the
next general meeting at which accounts are laid, that is, the next
Annual General Meeting.
Resolution 11
Auditors’ Remuneration
This resolution authorises the Directors to fix the auditors’
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
£2,185,354 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
£2,185,354; and
in relation to a pre-emptive right issue only, equity securities (as
defined by section 560 of the Act) up to a maximum nominal
amount of £4,370,707 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 £4,370,707.
As at the date of this notice, the Company does not have any
treasury shares.
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.
THE ANNUAL GENERAL MEETING of the Company will
be held at our Head Office, Thorpe Way, Grove Park, Enderby,
Leicestershire, LE19 1SU on 19 January 2022 at 09.30 a.m.
By way of explanation of the proposed resolutions:
Ordinary Business
Resolution 1 (Receiving the Annual Report and Accounts)
The Directors are required to present to the Meeting the audited
accounts and the reports of the Directors and the auditors for the
financial period ended 2 October 2021; and Shareholders are
invited to receive, consider and adopt them.
Resolution 2 Declaration of Final Dividend
A final dividend of 3.1 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 23 December 2021.
Subject to approval by the Shareholders at the Annual General
Meeting, the dividend will be paid on 31 January 2021. No
interim dividend was declared which means the total dividend level
will be 3.1 pence per Ordinary Share for the 53 weeks prior to
2 October 2021.
Resolution 3 (Directors’ Remuneration Report)
The Remuneration Committee of the Board is seeking Shareholder
approval for the Directors’ Remuneration Report. The Company is
required to seek Shareholder approval in respect of the contents of
this report on an annual basis. The vote is an advisory one and the
entitlement of a Director to receive remuneration is not conditional
on it.
Resolutions 4 to 7
Re-election of Directors
Although not required by the Company’s Articles, in line with good
corporate governance (2018 UK Corporate Governance Code)
Darren Shapland, Robert Parker, Stephen Hopson and Keith Down
will retire voluntarily and offer themselves for re-election.
For biographical details of all Directors standing for re-election, see
the Directors’ Report.
The Board considers that the contribution of each of the Directors
standing for re-election is important to the Company’s long-
term sustainable success. For more on this, see the Corporate
Governance Report.
Resolutions 8 to 9
Election of Directors
Diana Breeze and Kari Daniels, who were appointed as Directors
since the last Annual General Meeting, are offering themselves for
appointment as Directors at the Meeting in accordance with the
provisions of the UK Corporate Governance Code and also in
accordance with the Company’s articles of association.
For biographical details of all Directors standing for election, see
the Directors’ Report.
The Board considers that the contribution of each of the Directors
standing for election is important to the Company’s long-
term sustainable success. For more on this, see the Corporate
Governance Report.
156
TOPPS TILES PLC ANNUAL REPORT AND ACCOUNTS FOR THE 53-WEEK PERIOD ENDED 2 OCTOBER 2021
30525-Topps-Tiles-AR2021-Financials.indd 156
30525-Topps-Tiles-AR2021-Financials.indd 156
Job number 10 December 2021 5:09 pm V5
10/12/2021 17:10:04
10/12/2021 17:10:04
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 £327,803
representing approximately 5% of the nominal value of the
issued ordinary share capital of the Company as of
7 December 2021, 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 12 and is being sought in
accordance with the Pre-Emption Group’s Statement of Principles,
is limited to a maximum nominal amount of £327,803 which
represents approximately 5% of the nominal value of the issued
ordinary share capital of the Company as at 7 December 2021,
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 19,668,168 ordinary shares (representing approximately 10%
of the Company’s issued ordinary shares as of 7 December 2021,
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 7 December 2021, 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 10,367,859 ordinary shares in the capital of the Company,
representing 5.27% 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 5.86% of the Company’s issued ordinary share capital
following the repurchase of shares.
Resolution 16
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.
A
d
d
i
t
i
o
n
a
l
I
n
f
o
r
m
a
t
i
o
n
TOPPS TILES PLC ANNUAL REPORT AND ACCOUNTS FOR THE 53-WEEK PERIOD ENDED 2 OCTOBER 2021
157
30525-Topps-Tiles-AR2021-Financials.indd 157
30525-Topps-Tiles-AR2021-Financials.indd 157
Job number 10 December 2021 5:09 pm V5
10/12/2021 17:10:04
10/12/2021 17:10:04
THE TEAM
A
Aadil Mulla
Aaron Campbell
Aaron Gauntlett
Aaron James
Aaron Osei-Tutu
Aaron Powell
Abdihakim Osman
Abdul Khaem
Abigail Stevenson
Abu Samad
Adam Connor
Adam Crowe
Adam Devine
Adam Gilkes
Adam Godfrey
Adam Heffer
Adam Holland
Adam Howes
Adam Jolly
Adam Nuttall
Adam Shearsmith
Adam Smolarek
Adam Stevens
Adam Woollam
Addam Marsh
Aderemi Adediran
Adrian Gower
Adrian Hoggard
Agnieszka Kozera
Agnieszka Rozmarynowska
Aidan Dawes
Aimee Gallagher
Aimee Kidby
Aisling McKenna
Ajani Agyeman
Akshey Vadgama
Alain Gouro
Alan Lamb
Alan Maxwell
Alan Saunders
Alan Sproston
Alessandro Tedeschi
Alex Bell
Alex Di Pace
Alex Watkins
Alexander Errington
Alexander Findley
Alexander Marks
Alexander Shepherd
Alexander Walton
Alexander Williams
Alice Beanland
Alisha Millward
Alison Bennett
Alison Mazzei-Foster
Alistair Hodder
Allan Busby
Allysha Byrne
Amanda Brogan
Amanda Lyon
Amanda Plumb
Amanda Samuel
Amar Trivedi
Amelia Foster
Amin Ali
Amman Afzal
Amy McDaid
Amy Swanson
Amy Wirtz
Ananthan Sivanesan
Andre Osei
Andrea Moon
Andrew Collins
Andrew Davis
Andrew Fenner
Andrew Habbick
Andrew Harrison
Andrew Hawker
Andrew Haynes
Andrew James
Andrew Jones
Andrew Oliver
Andrew Playfoot
Andrew Reilly
Andrew Roseby
Andrew Sansum
Andrew Shaw
Andrew Tibbetts
Andrew Warne
Andrew Waterfield
Andrew Wathan
Andrew Wilkinson
Andrew Woodier
Andrius Matusevicius
Andrzej Huczko
Aneta Kleczek
Angela Capp
Angela Cooke
Angela George
Ankit Mahes
Anna Hibberd
Anna Landi
Anna Merta
Anna Skoczylas
Annabelle Harris
Anna-Marie Putt
Annia Aissani
Annmarie Malone
Anthony Brown
Anthony Daly
Anthony Davies
Anthony Dolan
Anthony Gilbert
Anthony Lyth
Anthony Molyneux
Anthony Reynolds
Anthony Tarr
Anthony Taylor
Anton Dixon-Hird
Antony Belham
Antony Miles
Anub Varghese
Anwar Marshall
Arin Angliss
Aron Hoff
Arron Lincoln
Aruna Mistry
Asher Hodson
Ashley Batley
Ashley Burke
Ashley Cutler
Ashley Hegarty
Ashley Hughes
Ashley Katinas
Ashley Kiffin
Ashley Mansfield
Ashley Somerville
Astone Davids
Athina Sesay
Atul Patel
Austin Drage
Azim Ahmed
B
Barbara Connor
Barbara Smith
Barri Barnes
Barry Beaver
Barry Gilbert
Barry Parker
Beata Skoczylas
Ben Adams
Ben Bright
Ben Howard
Ben Murphy
Benito Garrod
Benjamin Broom
Benjamin Champney
Benjamin Cunliffe
Benjamin Hale
Benjamin Hawes
Benjamin Rich
Bethanie Evans
Beverley Orton
Billy Stout
Billy Taylor
Blake Ladeinde
Bolaji Adeyanju
Bonita Flinthill
Bradley Brunson
Bradley Cox
Bradley Powell
Bradley Rockell
Brandon Abels
Brandon Calder
Brandon Fahey
Brandon Lodge
Brayan Pyzlowski
Brendan Flynn
Brett O’Harrow
Brett Simkiss
Brett Singers
Brian Linnington
Brian Morris
Bruce Fielding
Bruce Garrod
Bruce Gimbert
Bruno Bernasconi
Bryn Lewis
Bryn Slowley
Byron Tree
C
Caitlin Pipes
Callum Evans
Calvin Christopher
Cameron Oakey
Cameron Oldridge
Campbell Marr
Carl Ainsworth
Carl Courtney
Carl Fraser
Carl Whatley
Carla Sinnott
Carlos Alford Maestre
Carlos Chowdhury
Carol Beattie
Carol Hawkes
Carol Hobbs
Caroline Vernon-Sutton
Carolyn Paull
Casey Smith
Catherine Britton
Catherine Doulton
Chakib Ayoub
Chanel Sanganoo
Chantelle Gurney
Charjuan Knight
Charlene Walpole
Charles Hopper
Charles Kift
Charles Robbins
Charles Rollins
Charles Summers
Charles Taylor
Charlie Almond
Charlie Fletcher
Charlie Foster
Charlotte Cook
Charlotte Jackson
Charlotte Lammin
Chelsea Battle
Chelsea Long
Cheryl Vearncombe
Chester House
158
TOPPS TILES PLC ANNUAL REPORT AND ACCOUNTS FOR THE 53-WEEK PERIOD ENDED 2 OCTOBER 2021
30525-Topps-Tiles-AR2021-Financials.indd 158
30525-Topps-Tiles-AR2021-Financials.indd 158
Job number 10 December 2021 5:09 pm V5
10/12/2021 17:10:04
10/12/2021 17:10:04
Chetna Shah
Chloe Hall
Chloe Jackson
Chloe Singleton
Chris Foster
Chris Pargeter
Christian D’Agostino
Christian McCarthy
Christian Southwell
Christine Berry
Christine Taylor
Christine Thistlethwaite
Christopher Bailey
Christopher Beeson
Christopher Bentley
Christopher Bowden
Christopher Bree
Christopher Burrows-Simpson
Christopher Butler
Christopher Carey
Christopher Collins
Christopher Cooper
Christopher Curtis
Christopher D’Arts
Christopher Edwards
Christopher Fath
Christopher Heyes
Christopher Holland
Christopher Howe
Christopher MacFarlane Leach
Christopher Merrick
Christopher Miskelly
Christopher Moore
Christopher Nicholls
Christopher Nottle
Christopher Perry
Christopher Potter
Christopher Ritchie
Christopher Samuel
Christopher Sansby
Christopher Sylvester
Christopher Turley
Christopher Wells
Clair Jeffries
Claire Chaffe
Claire Herridge
Claire Paterson
Claire Ralphs
Clare Barden
Clare Long
Clifford Tomlinson
Clive Harlow
Colin Clarke
Colin Dean
Colin Denson
Colin Harvey
Colin Markham
Colin Petch
Colin Rymer
Colin Smith
Colin Trenery
Connagh Latham
Conner Ockenden
Connor Bantin
Connor Flynn
Connor Gane
Connor Garrow
Connor Thompson
Conrad Cassidy
Conrad Harrup
Cora Morrison
Cory Frost
Courtney Maglone-Gillies
Craig Dolling
Craig Johnson
Craig Matthews
Craig Murphy
Craig Reed
Cristian Olaru
Cristina Cole
Crystal Wallace-Prince
Curtis Julien
Curtis Lee
D
Daisy Garnett
Damian Merritt
Damiano Seresini
Dan Bevan
Danial Holloway
Daniel Bath
Daniel Berkes
Daniel Brain
Daniel Chambers
Daniel Colk
Daniel Cox
Daniel Cross
Daniel Fairless
Daniel Fallows
Daniel Geoghegan
Daniel Hall
Daniel Harper
Daniel Jenkins
Daniel Jones
Daniel Lawrie
Daniel Little
Daniel McLean
Daniel Milner
Daniel Moyse
Daniel Musguin
Daniel O’Callaghan
Daniel Pimm
Daniel Poile
Daniel Roberts
Daniel Rowlands
Daniel Sewell
Daniel Sheppard-Brown
Daniel Thornley
Daniel Varney
Daniel Willows
Daniella Winstone
Danielle Noyes
Danielle O’Mara
Daniel-Paul Petrut
Danny Ostler
Danny Wilson
Dario Della Libera
Darius Bright
Darnelle Riley
Darren Doughty
Darren Field
Darren Finnegan
Darren Harper
Darren Mencarini
Darren Mitchell
Darren Morgan
Darren Shapland
Darren Square
Darren Wagg
Darren Young
Darron Kerr
Darron Soos
Darryl Lawson Innes
David Augustus
David Clare
David Clark
David Coupland
David Fletcher
David Fox-Matthews
David Green
David Hance
David Hatton
David Henderson
David Hicks
David Hill
David Hirst
David Hope
David Houston
David Hussey
David Jackson
David Jones
David Kavanagh
David Kershaw
David Kettlewell
David Knight
David Lane
David MacArtney
David Miller
David Murray
David Oliver
David Parcell
David Rendall
David Reynolds
David Sheehy
David Simms
David Sinclair
David Thomas
David Thomasson
David Thompson
David Townsley
David Webb
David Whitelaw
David Wilson
David Yallop
Davina Vitles
Dawid Arabski
Dawn Gale Curtis
Dean Jones
Dean Marshall
Dean Rodger
Dean Saunders
Dean Titchen
Deane Rhone
Debbie Marsh
Deborah Edwards
Debra Bandghiree
Declan Baker
Declan Minchew
Decland Speede
Deeandra Bellew
Deesha Bhatt
Deividas Korsakas
Denis O’Brien
Dennecia Gordon
Dennis Elford
Dennis Jovellanos
Dennis Winterburn
Denzil Johns
Dermott Reilly
Deryn Shipley
Desmond Alleyne
Devindren Govender
Dharmika Shah
Diana Breeze
Dilara Aydin
Dilawar Ali
Dionne Fryer
Dipal Parikh
Dolton Gordon
Dominic D’Souza
Dominic Hall
Dominic Reilly
Donald Magullian
Donna Tyrrell
Donovan Robinson
Douglas Nicol
Dylan Roberts
E
Eamonn Clancy
Edward Corby
Elaina Waterhouse
Elaine Johnson
Eleanor Fletcher
Elise Ford
Elizabeth Lee
A
d
d
i
t
i
o
n
a
l
I
n
f
o
r
m
a
t
i
o
n
TOPPS TILES PLC ANNUAL REPORT AND ACCOUNTS FOR THE 53-WEEK PERIOD ENDED 2 OCTOBER 2021
159
30525-Topps-Tiles-AR2021-Financials.indd 159
30525-Topps-Tiles-AR2021-Financials.indd 159
Job number 10 December 2021 5:09 pm V5
10/12/2021 17:10:04
10/12/2021 17:10:04
THE TEAM
Elizabeth Sutton
Ella Jones
Ella Oliver
Ellie Ewing
Ellie Jordan
Elliot Musk-Cooper
Elliott Brown
Elliott Davis
Elliott Maitland-Price
Ellysia Richards
Emily Connelly
Emily Davis
Emily Finch
Emily Gardiner
Emily Gibbons
Emily Lenton
Emily Mansell
Emma Anderson
Emma Gotch
Emma Greenfield
Emma Hilton
Emma Langley
Emma Shaw
Emmanuel Melford-Rowe
Emran Mannan
Erandika Senevirathna
Eren Ucman
Erik Persson
Erikas Mazeikis
Ermiyas Girma
Esme Sparrow
Euan Preece
Eugenia Grigoruta
Eve Ruckwood
Eve White
Ewelina Szreder-Politowska
Ezra Deans
F
Faizar Ali
Faye Henderson
Felipe Franco
Felipe West
Filip Rozmyslowicz
Filipe Albarraque
Flynn Murphy
Fouche Lubbe
Frances Aylward
Francesca Corso
Francesca Harris
Frank Hibbert
Fraser Calder
Fraser Lockley
Freddie Jones
G
Gabriel Cimpan
Gabriel Iacob
Gabriella Carvalho
Gareth Fogden
Garrat Willsher
Garry Crichton
Gary Bloomfield
Gary Curtis
Gary Davies
Gary Gear
Gary Gledhill
Gary Mayo
Gary Nash
Gary Tipler
Gary West
Gary Williams
Gavin Bennett
Gavin Collins
Gavin Dale
Gavin Magwood
Gavin Winter
Gemma Bircham
Gemma Davies
Gemma Stephens
Geoffrey Greenwood
Geoffrey Thomas
George Astill
George Birkley
George Dewis
George Groves
Georgia Harding
Georgia Miles
Georgina Duffy
Geraint Griffiths
Gergo Poroszlai
German Ramirez Marin
Gillian Grace
Glenn Davies
Glenn Elgy
Glenn Smith
Gokhan Karadogan
Govinda Ashna
Graham Brown
Graham Foster
Graham Hancock
Graham Hitchin
Graham Livingstone
Graham Vance
Grant Smith
Grazvydas Garbacenokas
Gregor Robson
Gregory McHugh
Grenville Davies
Gurinder Chana
Gurshaan Bance
Guy Gorenski
H
Hamid Nedri
Hana Alexandria
Hannah Booth
Hannah Emmott
Hannah Kennedy
Hannah Marlow
Hannah Pritchard
Harley White
Haroon Younus
Harriet Buckley
Harriet Goodacre
Harrison Cartey
Harry Biggs
Harry Brown
Harry Page
Hayden Mason
Haydn Young
Hazel Millington
Helen Gosling
Helen Hughes
Helen Meredith
Helen Walker
Holly Dawson
Holly Hayes
Holly Meager
Holly Peck
Holly Skerritt
Hope Armstrong
Hugh Ball
Hugh Butler
Hurais Afridi
Hussein Mohamed
I
Iain Arnott
Ian Ashton
Ian Bloomfield
Ian Croton
Ian Fraser
Ian Marshall
Ian McNeish
Ian Merry
Ian Paterson
Ian Smithson
Ian Sykes
Igors Koselevs
Ingrid Obernauer
Isaiah Khaoya
Isha Denny-Gardener
Ivan Paitoo
J
Jacek Skubisz
Jacek Zebrowski
Jack Ablett
Jack Beesley
Jack Ellis
Jack Fairburn
Jack Finlay
Jack Flannigan
Jack Gallagher
Jack Hill-Jones
Jack Holyoake
Jack Howard
Jack Laband
Jack Lloyd
Jack Millman
Jack O’Neill
Jack Relfe
Jack Sharpe
Jack Swann
Jack Veall
Jacob Allan
Jacob Hillman
Jacob Powell
Jacqueline Desborough-
Morehead
Jade Clements
Jade Girgensons
Jade Stone
Jailuene Witterick Peake
Jake Carter
Jake Shopland
Jake Woods
James Barnett
James Beaumont
James Biesty
James Cameron
James Carpenter
James Chamberlain
James Charles
James Clifford
James Dixon
James Fox
James Hawker
James Heard
James Hollis
James Howard
James Hyland
James Journet
James Joyce
James McClary
James McGuigan
James Morgan
James O’Driscoll
James Pannett
James Patston
James Robertson
James Rolfe
James Saunders
James Snuggs
James Taylor
James Walker
James Watton
James Wolstenholme
Jamie Calow
Jamie Kelly
Jamie Martin
Jamie McCann
Jamie Ormrod
Jamie Sia
Jamie Thornton
Jamie Wenborn
Jamie Whitear
160
TOPPS TILES PLC ANNUAL REPORT AND ACCOUNTS FOR THE 53-WEEK PERIOD ENDED 2 OCTOBER 2021
30525-Topps-Tiles-AR2021-Financials.indd 160
30525-Topps-Tiles-AR2021-Financials.indd 160
Job number 10 December 2021 5:09 pm V5
10/12/2021 17:10:04
10/12/2021 17:10:04
Jamie Wilson
Janaka Alahapperuma
Janet Lee
Jasbir Singh
Jasimron Dehl
Jason Barker
Jason Bloxham
Jason Coupland
Jason Ealden
Jason Nelson
Jaspreet Sandhu
Javeed Parkar
Jay Davies
Jayde Cheyne
Jaye Mead
Jayeshkumar Naika
Jayne Young
Jaytan Vadher
Jedrzej Politowski
Jeffrey Coleman
Jeffrey Mann
Jennifer Balfour
Jennifer Buddington
Jennifer Flowers
Jennifer Glover
Jennifer Opoku
Jennifer Seabrook
Jennifer Wall
Jenny Inkson
Jeremy Long
Jessica Cano
Jessica Challinor
Jessica Duncan
Jessica Hatton
Jessica Hinton
Jessica Jarman
Jessica Sawyer
Jessica Wood
Jo Adamson
Joana Oakes
Joanna Britton
Joanna Knapczyk
Joanne Cox
Joanne Elton
Jodie Croucher
Jodie Du-Hamel
Jodie Jones
Joe Dwyer
Joe Garraghan
Joe Guymer
Joe Mathews
Joe Raynsford
Joe Smith
Joe Walker
Joe Whalley
Joel Barker
Joel Bray
Jogendra Kalicharan
John Bourke
John Burton-Simm
John Capps
John Fawkes
John Harris
John Harrison
John Hennessy
John Hesp
John Hughes
John McLaren
John Moat
John Morris
John Page
John Shaw
John Stannard
John Thompson
Johnathan McCallum
Johnathon Humphries
Jon Davis
Jon O’Neill
Jon Paul Hughes
Jonatan Muti
Jonathan Boxall
Jonathan East
Jonathan Hall
Jonathan Hargreaves
Jonathan Impey
Jonathan Stearman
Jonathan Stone
Jonathan Wallace
Jonathan Wiles
Jonathan Williams
Jonathon Turner
Jonathon Underdown
Jordan Bannister
Jordan Byars
Jordan Edwards
Jordan Lindsay
Jordan Lowes
Jordan Scarbrow
Jordan Tift
Jordan Vinluan
Josef Kinski
Joseph Cox
Joseph Daly
Joseph Deevey
Joseph Durham
Joseph Gregorace
Joseph Hardman
Joseph Haughney
Joseph Haynes
Joseph Heath
Joseph Hopper
Joseph Lewis
Joseph Whittaker
Josephina Lane
Joshua Brown
Joshua Burgess
Joshua Crombie
Joshua Curtis
Joshua Elliott
Joshua Hobbs
Joshua Hubbard
Joshua Paton-Rolls
Joshua Rapley
Joshua Wright
Josiah Andrew-Razemba
Josie Colehan
Josie Walker
Juan Oliveira McDowell
Jude McGuigan
Judith Duncan
Juginder Gill
Julia Kerr
Julie Brachtvogel
Julie Mitchell
Julie Wood
Julieann Pemberton
Jullah Jabbi
Juned Ahmed
Junior Oji
Juris Kalnins
Justas Ramasauskas
Justin Marlow
Justine Bowman
Justyna Logozna-Lisowska
Juttinder Digpal
K
Kaissar Chtouki Resok
Kajetan Marcinek
Kamaljit Atkar
Kamaljit Thandi
Kamlesh Shah
Karen Dodds
Kari Daniels
Karis Hall
Karl English
Karl Lippiatt
Karl Lusardi
Karl Reeves
Karl Riley
Karl White
Katera Njillo Kombey
Katherine Blitz
Katherine Jackson
Kathryn Pell
Kathryn Simmons
Katie Brindley-Hughes
Katie Lunn
Katy Todd
Kayleigh Clemson
Kayleigh Pearson
Kayley Halliday
Kazi Mashud
Keaton Bayliss
Keeleigh Gibson
Keely Powell
Keith Ambrose
Keith Down
Keith Fitzpatrick
Keith Maggs
Keith Stanley
Kellie Eamer
Kelly Blount
Kelly Goodacre
Kelly Miller
Kelly Savile
Kelvin Lansdowne
Kenneth Ostler
Kenneth Owen
Kerri Atkinson
Kerrie Burcham
Kerry Hurst
Kerry McAuliffe
Kevan Richardson
Kevin Atherton
Kevin Baker
Kevin Bingham
Kevin Da Silva
Kevin Fox
Kevin Frampton
Kevin Hardy
Kevin Hooper
Kevin Nicol
Kevin Rabbatt
Kevin Thorne
Kieran Barnes-Warden
Kieran Fleet
Kieran Gardiner
Kieran Warwick
Kieron King
Kim Jones
Kim Moriarty
Kirk Irvine
Kirk Randall
Kirk Taylor
Kirsten Cummings
Kirstie Leonard
Kirsty Graham
Kirsty Harris
Kirsty Rice
Kirti Patel
Kouakou Ange Davis
Kranthi Billakanti
Kristian Catterall
Kristian Moore
Kristian Prosser
Kristian Pryor
Kristopher Allatson
Krystle Milan
Krzysztof Zielinski
Kurt Folkes
Kye Harman
Kyle Batley
Kyle Crichton
Kyle Foxon
Kyle Hardie
A
d
d
i
t
i
o
n
a
l
I
n
f
o
r
m
a
t
i
o
n
TOPPS TILES PLC ANNUAL REPORT AND ACCOUNTS FOR THE 53-WEEK PERIOD ENDED 2 OCTOBER 2021
161
30525-Topps-Tiles-AR2021-Financials.indd 161
30525-Topps-Tiles-AR2021-Financials.indd 161
Job number 10 December 2021 5:09 pm V5
10/12/2021 17:10:04
10/12/2021 17:10:04
THE TEAM
Kyle Landy
Kyle Martin
Kyle Still
Kyle Welford
Kyran Andrews
L
Lance Cale
Laney Taylor
Laura Alder-Rose
Laura James
Laura Johnson
Laura Madigan
Laura Racey
Laura Smith
Lauren Munro
Lauren Riley
Lauryn Cotton
Layla Gearey
Leanne Curry
Lee Armstrong
Lee Butcher
Lee Clarke
Lee Eagling
Lee Fish
Lee Galloway
Lee Gibson
Lee Gladman
Lee Holyoake
Lee Hutchinson
Lee Jamieson
Lee Kent
Lee Read
Lee Woodman
Leighton Davies
Leon Day
Leon Pryce
Lesley Jasper
Lesley Willcox
Levar Gardiner
Lewis Adkins
Lewis Elkin
Lewis Harkins
Lewis Hill
Lewis Pilcher
Lewis Stone
Lewis Williams
Liam Bantin
Liam Corbett
Liam Ellis
Liam Flynn
Liam Hunt
Liam Lishman
Liam Rushen
Lianne Harrison
Libby Field
Lily Yeo
Linda Sleath
Lindsay Bond
Lindsey Flint
Lisa Algar
Lisa Cullen
Lisa France
Lisa Holmes
Lisete Carvalho
Lloyd Jackson
Lois Bettinson
Lola Halligan
Lorna Sullivan
Loucas Louca
Louis Spaett
Louise Bunting
Louise Cox
Louise Groves
Louise Henbest
Louise Reddell
Lucy Harper-Thompson
Lucy Jenner
Lucy Swain
Lukasz Pirga
Luke Barefield
Luke Day
Luke Harris
Luke Hogan
Luke Kerr
Luke McNally
Luke O’Connor
Luke Pitchen
Luke Potiphar-Trigwell
Luke Rodgers
Luke Saunders
Luke Wheeler
Luke Woodward
Lyndsey Farmer
Lynne Meldrum
Lynsey Smart
M
Macaulay Kirk
Madeline Pipes
Magdalena Chodynicka
Mahesh Wara
Maisie Bell
Malik Ahmed
Mandee Thompson
Mandy Antenbring
Manisha Patel
Marc Harris
Marc Holland
Marcin Kupczyk
Margaret Lawrie
Margarita Starcea
Maria Graham
Mark Allman
Mark Brown
Mark Burgess
Mark Campbell
Mark Chantler
Mark Coe
Mark Frisby
Mark Gasson
Mark Heath
Mark Hughes
Mark Hunter
Mark Johnston
Mark Keymer
Mark MacIver
Mark Matthews
Mark Owen
Mark Palmer
Mark Pancott
Mark Richardson
Mark Ridley
Mark Rogers
Mark Sloan
Mark Tennant
Mark Vaughan
Mark Waldock
Mark Walker
Mark West
Mark Woodyatt
Mark Wordley
Mark Wright
Marley Dixon
Marley Payne
Marshall Brewin
Martin Abel
Martin Brown
Martin Ellis
Martin Guest
Martin Oliver
Martin Osborne
Martin Pickard
Martin Turner
Martin Williams
Martina Way
Martine Robinson
Martyn Rizakous
Martyn Somerville
Martyn Spring
Mathew Buckett
Mathew Hampshire
Mathew Mitchell
Matt Attwood
Matt Malloy
Matthew Atkinson
Matthew Barcas
Matthew Fisher
Matthew Foster-Smith
Matthew Grainger
Matthew Hawley
Matthew Ingram
Matthew Lindsay
Matthew Lynch
Matthew Martin
Matthew McManus
Matthew Miller
Matthew Moore
Matthew Norris
Matthew Ralfs
Matthew Rowson
Matthew Stevenson
Matthew Tipler
Matthew Whitlock
Matthew Woodhouse
Matthew Wright
Mattia Galassi
Max Evans
Meera Assan
Megan Burrows
Megan Hammet
Megan Hawtin
Megan Walsh
Mehlika Kilic
Mehmet Asdoyuran
Melanija Nomgaude
Melissa Richmond
Mervyn Thorne
Mhairi Wade
Michael Beatty
Michael Boughton
Michael Buckley
Michael Butler
Michael Dinter
Michael Edwards
Michael Evans
Michael Finn
Michael Goodfield
Michael Hopper
Michael Humphrey
Michael Jones
Michael Kessler
Michael Lethbridge
Michael Lovelock
Michael McGarry
Michael Moss
Michael Quinn
Michael Sear
Michael Upton
Michael Van Sittert
Michael Wallace
Michael Wright
Michal Glinka
Michelle Astman
Michelle Cahill
Michelle Moore
Mike Booth
Minai Kanabar
Miroslaw Hebda
Mitchell Glover
Mkhonto Gumede
Mohammed Ali
Mohammed Hoque
Mohammed Jimale
Mohammed Khalid
Mohd Jaji
162
TOPPS TILES PLC ANNUAL REPORT AND ACCOUNTS FOR THE 53-WEEK PERIOD ENDED 2 OCTOBER 2021
30525-Topps-Tiles-AR2021-Financials.indd 162
30525-Topps-Tiles-AR2021-Financials.indd 162
Job number 10 December 2021 5:09 pm V5
10/12/2021 17:10:05
10/12/2021 17:10:05
Mohsin Ahmed
Montana Mills
Morgan Marshall
Mr Topps (Retired)
Mubashir Uddin
Mudassor Raja
Muhammad Choudhury
Murdo Martin
N
Nancy Jacques
Naomi Baron
Narinder Chatha
Nasir Hussain
Nassim Keniza
Natalia Haugh
Natalia Zagrodnik
Natalie Milan
Natalie Paine
Natalino Danquah
Natasha Johnson
Nathalie Mpitu
Nathan Austin
Nathan Coulthard
Nathan Hughes
Nathan Kivell
Nathan Thorpe
Nauris Vinkelis
Neely Stuart
Neha Shah
Neil Anderson
Neil Homan
Neil Jeremy
Neil Jones
Neil Lutterloch
Neil Southgate
Neil Topping
Neil Williams
Niall Haughton
Nicholas Culley
Nicholas Gadd
Nicholas Lodge
Nicholas Stone
Nicholas Stubbs
Nicholas Taylor
Nicholaus Buchanan
Nick Meese
Nick Walch
Nicky Glenister
Nicola Brownley
Nicola Fletcher
Nicola Greenaway
Nicola Howlett
Nicola McWatt
Nicola Monk
Nicole Andrews
Nicole Colvin
Nida Naqvi
Nigel Fleming
Nigel Slaughter
Nikita Bedford
Nikolay Georgiev
Nisha Sodha
Nishit Shah
Nita Rajani
Nixaal Patel
Norberto Estrada
Norton Kudlatz
Numan Usman
O
Oliver Duggan
Oliver Hart
Oliver Howker
Olivia Dettmer
Olivia Hughes
Olivia Newsome
Oluwatoyosi Sobogun
Oscar Cork
Owen Tudor
Oz Masaya
P
Paige Armstrong
Paige Makepeace
Paige Morgan
Paresh Nagar
Parminder Garcha
Patrick Galvin
Patrick Howlett
Patrick Tompsett
Patryk Tralewski
Paul Baker
Paul Burkett
Paul Burrow
Paul Carr
Paul Cheetham
Paul Cowen
Paul Dalby
Paul Gee
Paul Haythorne
Paul Hubbard
Paul Irving
Paul Jenkinson-Finn
Paul Kelly
Paul Keymer
Paul Lee
Paul Mills
Paul Mitchell
Paul Nicholls
Paul Northern
Paul Noyes
Paul Semple
Paul Smith
Paul Starkey
Paul Thomas
Paul Tregaskis
Paul West
Paul Whittington
Paul Wilson
Pauline Harrison
Pawel Pudelko
Pawel Warych
Pele Elton
Perran Kelly
Perry Hodges
Peter Ambrose
Peter Callan
Peter Carr
Peter Charles
Peter Charters
Peter Gilmore
Peter Goulding
Peter Hanley
Peter Lees
Peter Little
Peter Smith
Peter Tedstone
Peter Turtle
Peter West
Peter White
Peter Young
Petronela Aidi
Phil Crawley
Philip Cranston
Philip Dunn
Philip Gallop
Philip Speed
Philip Stocks
Philippa Hill
Phillip Gilbert
Phillip Handley
Phillipa Hewitt
Pj Blunden
Poonam Patel
Poppy Parmenter
Poppy Turner
Portia Boehmer
Przemyslaw Swislocki
Q
Qasim Basharat
R
Rachael Roseman
Rachel Caborn
Rachel Fletcher
Radoslaw Doktorski
Radoslaw Naruszewicz
Rahim Benson
Raj Sodha
Raj Surani
Rajan Toora
Rajesh Thanki
Rajiv Vadgama
Rajnish Gaur
Ramzan Bapu
Ratip Hassan
Ravi Kalyan
Rebeca Wallis
Rebecca Cole
Rebecca Godfrey
Rebecca Love
Rebecca Mills
Rebecca Moore
Rebecca Oblein
Reece Brewin
Reece Charlton
Reece Coppins
Reece Portsmouth
Rhiannon Holland
Rhys Baird
Ria Croft
Richard Adamson
Richard Arciero
Richard Austin
Richard Beaven
Richard Bleach
Richard Bourne
Richard Carter
Richard Clark
Richard Davies
Richard Eagland
Richard France
Richard Geare
Richard Greenwood
Richard Keane
Richard Lewis
Richard Napier
Richard Newbon
Richard Oates
Richard Oldale
Richard Palfrey
Richard Prescott
Richard Senior
Richard Small
Richard Sumner
Rickie Byrne
Rizwan Saleh
Rob Moody
Robbie Coleman
Robert Adams
Robert Black
Robert Buckley
Robert Chawner
Robert Collins
Robert Dennis
Robert Dunn
Robert George
Robert Hardie
Robert Howker
Robert Ireland
Robert Kroll
Robert Kweli
Robert Moss
Robert Myers
Robert Parker
Robert Prince
A
d
d
i
t
i
o
n
a
l
I
n
f
o
r
m
a
t
i
o
n
TOPPS TILES PLC ANNUAL REPORT AND ACCOUNTS FOR THE 53-WEEK PERIOD ENDED 2 OCTOBER 2021
163
30525-Topps-Tiles-AR2021-Financials.indd 163
30525-Topps-Tiles-AR2021-Financials.indd 163
Job number 10 December 2021 5:09 pm V5
10/12/2021 17:10:05
10/12/2021 17:10:05
THE TEAM
Robert Spencer
Robert Tillotson
Robert Tsui
Robert Twiner
Robert Wyatt
Robin Stagg
Robin Williams
Rodolfo Ferraris
Roger Lazenby
Romans Petuhovs
Romany Andrew
Romualdas Maciulevicius
Rory Reeves
Rose Bola
Rosie Carney
Ross Ashbrook
Ross Langford
Ross Leitch
Ross Matthews
Ross Wilkins-Heath
Roxanne Daly
Roxanne Morris
Roxanne Seurre
Ryan Apark
Ryan Buston
Ryan Coleman
Ryan Dunn
Ryan Farquhar
Ryan French
Ryan Henson
Ryan Izard
Ryan Knauf
Ryan Lundberg
Ryan Needham
Ryan Randall
S
Sachin Gokani
Sahibjit Samra
Sally Cook
Sam Birch
Sam Davis
Sam Groves
Sam Mackenzie
Sam Randle
Sam Thomas
Samantha Davies
Samantha Gray
Samantha Leavis
Samantha Stewart
Sameer Jamdar
Samuel Atkinson
Samuel Knowles
Samuel Underwood
Sandra Ramsay
Sandra Van Spronsen
Sanjeev Pal
Sarah Darby
Sarah Dobson Da Silva
Sarah Jordan
Sarah Kite
Sarah McLure
Sarah Peters
Sasha Thornett
Satvinder Sandhu
Satyam Panday
Savio Coutinho
Scott Ahmad
Scott Andrews
Scott Birdseye
Scott Bond
Scott Gane
Scott Hopwood
Scott Jesson
Scott Keeton
Scott McCartney
Scott Morrison
Scott Niven
Scott Robinson
Scott Thirlaway
Sean Brandist
Sean Cahill
Sean Campbell
Sean Dare
Sean Gee
Sean McClafferty
Sean McLean
Seaneen Ahmed
Shabbir Bandali
Shafeek Mohamed
Shahid Mahmood
Shamara McKenzie-Rochester
Shane Bryan
Shane Lindsay
Shane Malone
Shane Mason
Shane Till
Shane Trim
Shanee Gately
Shannon Cochrane
Shannon Dewdney
Sharif Islam
Sharon Buckley
Sharon Papantoniou-Barrett
Sharon Whiting
Shaun Gordon
Shaun Owens
Shaun Pawsey
Shaun Sargeant
Sheena Smith
Sheralyn Tidball
Shrina Shah
Shylo Brookes
Sian Garvey
Sian Horrigan
Silvi Atanasova
Silvia Babescu
Silviu Oltean
Simon Badhams
Simon Beare
Simon Briggs
Simon Brookfield
Simon Chapman
Simon Chappell
Simon Farley
Simon Gold
Simon Green
Simon Grimmett
Simon Lasham
Simon Leslie
Simon Lewis
Simon Ly
Simon MacDonald
Simon Marks
Simon Meider
Simon Neal
Simon Roberts
Simon Webb
Simon Witham
Sinan Demir
Sinead Fisher
Siobhan Ashman
Sjofn Redman
Slavka Georgieva
Sonia Sapinska
Sophie Doggart
Sophie Pavey
Sophie Swann
Spencer Clifford
Spencer Day
Stefan Andronic
Stefan Clark-Carter
Stephanie Bannister
Stephanie Dinnis
Stephanie Hogben
Stephanie Kilner Roberts
Stephanie Nevett
Stephanie Shaw
Stephen Amos
Stephen Anthony
Stephen Boyd
Stephen Breslin Burn
Stephen Carr
Stephen Collins
Stephen Corkett
Stephen Edmonds
Stephen Edwards
Stephen Foote
Stephen Freeman
Stephen Harrington
Stephen Hopson
Stephen Kelly
Stephen Lacey
Stephen Lopes
Stephen Mabberley
Stephen Machin
Stephen Maidment
Stephen Osbourne
Stephen Riley
Stephen Seymour
Stephen Smith
Stephen Velvick
Stephen Watson
Steve Brown
Steve McLean
Steven Barrowcliffe
Steven Dyer
Steven Higgins
Steven Howells
Steven Ives
Steven Kane
Steven Kernot
Steven Souter
Steven Whitehead
Steven Wood
Stuart Allman
Stuart Barrett
Stuart Clarke
Stuart Corlett
Stuart Fletcher
Stuart Harris
Stuart Munton
Stuart Rees
Stuart Ross
Stuart Smith
Stuart Stevenson
Stuart Tannock
Stuart Whitby
Stuart Williams
Sukhdev Bains
Summer Ellison
Sunil Patel
Susan Law
Susanna Horwood
Suzanne Seymour
Syann Watkins
Sydnee Wilson
Sydney Bennett
Sydney Holt
Syed Shah
Sylwia Wygachiewicz
Szabolcs Szudar
T
Tahmid Islam
Tallon Poulton
Tammie O’Lone
Tanya Dix
Tanya Roberts
Tara Smith
Tarun Val
Tauseef Usman
Tejay Smith
Terence Cooper
Terry Morris
Terry Salisbury
164
TOPPS TILES PLC ANNUAL REPORT AND ACCOUNTS FOR THE 53-WEEK PERIOD ENDED 2 OCTOBER 2021
30525-Topps-Tiles-AR2021-Financials.indd 164
30525-Topps-Tiles-AR2021-Financials.indd 164
Job number 10 December 2021 5:09 pm V5
10/12/2021 17:10:05
10/12/2021 17:10:05
Victoria Cunday
Vikki Garland
Vilius Meilus
Vinod Joshi
Viorica Grapa
Vishal Depala
W
Warren Pettersen
Wayne Joy
Wayne Randall
Wayne Taylor
Wendy Martindale
Wesley Appadoo
William Aires
William Bailey
William Barreda
William Buxton
William Foxley
William Goodwin
William Halfhide
William Harman
William Pollock
William Short
William Swain
William Timmins
Wyn Dunn-Davies
Y
Youssef Djeraoui
Yvonne Burgess
Yvonne Hardingham
Z
Zeeshan Zaffar
Zhanna Knight
Zoe Fox
Zoe Gilbert
Zoe Harcus
Zoe Stevens
Thairiece Taylor
Theophilus Danquah
Thomas Ashmore
Thomas Bedford
Thomas Caldicott
Thomas Darlaston
Thomas Evans
Thomas Fuller-Winterburn
Thomas Harris
Thomas Knight
Thomas Langston
Thomas Lee
Thomas McGeown
Thomas Murray
Thomas Otley
Thomas Ryan
Thomas Still
Thomas Utting
Thomas Wade
Tim Chatfield
Tim Glasson
Tim Richards
Timothy Bentley
Timothy Boardman
Timothy Hilton
Timothy Morgan
Timothy Tatlock
Tina Clark
Tina Hughan
Tina Willett
Toby Vennard
Todd Routledge
Tom Cheevers
Tom Fernley
Tom Newman
Toma Grasu
Tommy Elford
Tony Chandler
Tony Dumbleton
Tracey Salter
Tracey Turner
Tracey Waterman
Tracy Wearmouth
Travis Law
Troy Fearon
Troy Ledgerwood
Troy Miller
Tyler King
Tyler Nossent
Tyler Smith
Tyrone Bower
U
Udo Jungbecker
Umut Ortac
V
Valentin Ivan
Veronica Evett
Veronica Zudaire
A
d
d
i
t
i
o
n
a
l
I
n
f
o
r
m
a
t
i
o
n
TOPPS TILES PLC ANNUAL REPORT AND ACCOUNTS FOR THE 53-WEEK PERIOD ENDED 2 OCTOBER 2021
165
30525-Topps-Tiles-AR2021-Financials.indd 165
30525-Topps-Tiles-AR2021-Financials.indd 165
Job number 10 December 2021 5:09 pm V5
10/12/2021 17:10:05
10/12/2021 17:10:05
STORE LOCATIONS
London
Acton
Battersea
Beckenham Topps
Beckton
Bow
Brentford
Brixton
Bromley Common
Catford Bromley Rd
Charlton
Cheam
Chingford
Colindale
Croydon
Croydon Purley
Dagenham
Dartford
Denham
Dorking
East Sheen
Eltham
Enfield
Epsom
Feltham
Fulham Topps
Hayes Topps
Hemel Hempstead
Highgate
Hounslow
Ilford
Ilford Seven Kings
Kings Cross
Leyton
New Southgate
North Finchley
Old Kent Road
Orpington
Park Royal Topps
Penge
Raynes Park
Redhill
Romford
Ruislip
Sevenoaks
Shoreditch
South Bermondsey
Southall
St Albans
Staples Corner
Sunbury upon Thames
Surbiton
Uxbridge
Waltham Cross
Wandsworth
Wembley
Willesden
Wimbledon
Midlands
Barnsley
Binley
Boston
Burton upon Trent
Cannock
Chesterfield
Coventry Tile Hill
Derby
Derby Osmaston
Doncaster
Enderby
Erdington
Fenton
Grantham
Grimsby
Kettering Baron
Kidderminster
Kings Norton
Leicester Thurmaston
Leamington Spa
Lichfield
Lincoln Outer Circle
Long Eaton
Loughborough
Mansfield
Nantwich
Newark
Newcastle-under-Lyme
Northwich
Nottingham Arnold
Nottingham Poulton
Nuneaton
Redditch
Sheffield
Shrewsbury
Solihull
Spalding
Stoke
Stratford upon Avon
Tamworth
Telford
West Bromwich
Worksop
North
Aintree
Anfield
Birkenhead
Blackburn
Blackpool
Bolton
Bury
Carlisle
Cheadle
Cheetham Hill
Chester
Darlington
Durham Dragonville
Gateshead
Harrogate
Huddersfield
Hull
Hyde
Leeds
Leeds Sheepscar
Macclesfield
Morecambe
Northallerton
Oldham
Ormskirk
Preston
Sale
Salford
Scarborough
Scunthorpe
Shipley
Snipe (Audenshaw)
St Helens
Stockport
Stockton
Tyneside
Wakefield Ings Road
Warrington
Widnes
Wigan
Workington
York Clifton Moor
Scotland and Northern Ireland
Aberdeen Wellington
Ayr
Belfast Boucher Road
Belfast Newtownabbey
Dundee
Edinburgh
Fort Kinnaird
Glasgow
Hillington
Inverness
Irvine
Kirkcaldy
Shawfield
Sighthill
Stirling
Wishaw
South
Abingdon
Andover
Amersham
Ashford
Aylesbury
Banbury
Barnstaple
Basildon
Basingstoke
Bath
Bedford Elms
Bexhill
Bicester
Bishops Stortford
Bodmin
Bognor Regis
Borehamwood
Bounds Green
Bournemouth
Bracknell
Braintree
Brentwood
Bridgwater
Brighton
Brighton Kemp Town
Bristol
Broadstairs
Burgess Hill
Bury St Edmunds
Byfleet
Camberley
Cambridge
Canterbury
Chelmsford
Chelmsford Springfield
Cheltenham
Chichester
Chippenham
Christchurch
Cirencester
Clacton on Sea
Clevedon
Colchester
Cribbs Causeway
Cromer
Didcot
Dorchester
Dover
East Molesey
Eastbourne
Egham
Erith
Evesham
Exeter Trusham Rd
Exmouth
Fareham Topps
Farnborough
Farnham
Folkestone
Frome
Gatwick
Glastonbury
Gloucester
Gravesend
Great Yarmouth
Guildford
Hailsham
Harlow
Havant
Hedgend
166
TOPPS TILES PLC ANNUAL REPORT AND ACCOUNTS FOR THE 53-WEEK PERIOD ENDED 2 OCTOBER 2021
30525-Topps-Tiles-AR2021-Financials.indd 166
30525-Topps-Tiles-AR2021-Financials.indd 166
Job number 10 December 2021 5:09 pm V5
10/12/2021 17:10:05
10/12/2021 17:10:05
Uckfield
Waterlooville
Watford Imperial
Wellingborough
Welwyn Garden City
Weston Super Mare
Weymouth
Winchester
Witney
Woking
Wokingham
Worcester
Yeovil
Wales
Bangor
Barry
Bridgend
Cardiff
Cardiff Newport Road
Carmarthen
Haverfordwest
Llanelli
Merthyr Tydfil
Newport
Rhyl
Swansea Cwmdu
Wrexham
Commercial Showrooms
Balham
Chelsea
Clerkenwell
Islington
Leicester
Notting Hill
Swerford
Hereford
High Wycombe
Horsham
Huntingdon
Ipswich
Isle of Wight
Isleworth
Kings Lynn
Launceston
Leighton Buzzard
Letchworth
Loughton
Lowestoft
Luton
Maidstone
Maidstone Langley
Market Harborough
Martlesham
Millbrook (Southampton)
Milton Keynes
Moreton in Marsh
Newbury
Newhaven
Newton Abbot
Northampton
Norwich
Norwich Hall Road
Oxford Cowley
Penzance
Peterborough
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
Taunton
Thetford
Thurrock
Tonbridge
Torquay
Truro
Tunbridge Wells
Our Retail Stores
Topps Tiles has 313 retail 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.
14
2
42
43
13
57
142
A
d
d
i
t
i
o
n
a
l
I
n
f
o
r
m
a
t
i
o
n
TOPPS TILES PLC ANNUAL REPORT AND ACCOUNTS FOR THE 53-WEEK PERIOD ENDED 2 OCTOBER 2021
167
30525-Topps-Tiles-AR2021-Financials.indd 167
30525-Topps-Tiles-AR2021-Financials.indd 167
Job number 10 December 2021 5:09 pm V5
10/12/2021 17:10:06
10/12/2021 17:10:06
1
Quarry Red, Quarry Red Bullnosed, Matrix Primrose Yellow
30525-Topps-Tiles-AR2021-Financials.indd 168
30525-Topps-Tiles-AR2021-Financials.indd 168
Job number 10 December 2021 5:09 pm V5
10/12/2021 17:10:07
10/12/2021 17:10:07
30525-Topps-Tiles-AR2021-Financials.indd 3
30525-Topps-Tiles-AR2021-Financials.indd 3
Job number 10 December 2021 5:09 pm V5
10/12/2021 17:10:08
10/12/2021 17:10:08
Job number 10 December 2021 1:08 pm V9TOPPS TILES PLCThorpe Way, Grove Park, Enderby, Leicestershire, LE19 1SUwww.toppstilesplc.comTopps Tiles Plc Annual Report and Accounts for the 53-week period ended 2 October 202130525-Topps-Tiles-AR2021-Strategic.indd 330525-Topps-Tiles-AR2021-Strategic.indd 310/12/2021 15:35:1210/12/2021 15:35:12