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TOPPS TILES PLC
ANNUAL REPORT AND ACCOUNTS
FOR THE 52-WEEK PERIOD ENDED
1 OCTOBER 2022
Pictured front cover: CapelloTM
Pictured this page: Onea Stone
CONTENTS
Highlights
Group at a Glance
Investment Case
Chairman’s Statement
01. STRATEGIC REPORT
Marketplace
Business Model
Our Strategy
– Leading Product
– Leading People
– Environmental Leadership
– Omni-channel – Topps Tiles
– Online Pure Play – Pro Tiler Tools
and Tile Warehouse
– Commercial – Parkside
Key Performance Indicators
Financial Review
Risks and Uncertainties
Section 172 Companies Act 2006
Sustainability
TCFD Disclosures
Going Concern and Viability Statement
02. OUR GOVERNANCE
Board of Directors
Executive Committee
Corporate Governance Report
Directors’ Report
Directors’ Responsibilities Statement
Directors’ Remuneration Report
03. OUR FINANCIALS
Independent Auditor’s Report
Consolidated Statement of Profit or Loss
Consolidated Statement of
Comprehensive Income
Consolidated Statement of
Financial Position
Consolidated Statement of
Changes in Equity
Consolidated Cash Flow Statement
Notes to the Financial Statements
Company Balance Sheet
Company Statement of
Changes in Equity
Notes to the Company Financial
Statements
04. ADDITIONAL INFORMATION
Five-Year Record
The Team
Store Locations
02
04
06
08
12
14
16
20
22
24
26
30
32
34
36
42
46
50
58
62
66
68
69
86
89
90
116
124
124
125
126
127
128
160
161
162
172
173
182
WELCOME TO
TOPPS
GROUP
Our core purpose is
INSPIRING
CUSTOMERS
THROUGH OUR
LOVE OF TILES
The Group’s goal is
to achieve 20% of market share by 2025.
Corporate:
Omni-channel:
Commercial:
Online Pure Play
www.toppstilesplc.com
www.toppstiles.co.uk
www.parkside.co.uk
www.protilertools.co.uk
www.tilewarehouse.co.uk
01
Group Growth Strategy
OMNI-CHANNEL
ONLINE PURE PLAY
COMMERCIAL
LEADING PRODUCT
LEADING PEOPLE
ENVIRONMENTAL LEADERSHIP
Culture
We 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 Group way.
OVERVIEW 02
HIGHLIGHTS
Topps Tiles Plc (“Topps”, “the Group”, “Topps Group” or “the Company”), the UK’s leading tile specialist,
announces its annual financial results for the 52 weeks ended 1 October 2022.
STATUTORY MEASURES
ADJUSTED MEASURES
GROSS
MARGIN (%)
Year-on-Year: (2.5) ppts
TOPPS TILES LIKE-FOR-LIKE
REVENUE YEAR-ON-YEAR1 (%)
Year-on-Year: (10.2)ppts
ADJUSTED PROFIT
BEFORE TAX2 (£M)
Year-on-Year: +4.0%
GROUP
REVENUE (£M)
Year-on-Year: +8.4%
2
.
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GROSS
PROFIT (£M)
Year-on-Year: +3.6%
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PROFIT
BEFORE TAX (£M)
Year-on-Year: (22.1%)
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(
BASIC EARNINGS
PER SHARE (P)
Year-on-Year: (15.9%)
TOTAL DIVIDEND
DECLARED (P)
Year-on-Year: +16.1%
7
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ADJUSTED EARNINGS
PER SHARE3 (P)
Year-on-Year: +2.0%
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ADJUSTED
NET CASH/DEBT4 (£M)
Year-on-Year: £(11.6)m
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NOTES
1 Topps Tiles like-for-like revenue is defined as sales from online and Topps Tiles
stores that have been trading for more than 52 weeks. In 2022 like-for-like
revenue was £225.6 million (2021: £216.6 million), with an average of 310
stores included in the weekly calculation.
2 Adjusted profit before tax excludes the impact of items which are either one-off in
nature or fluctuate significantly from year to year.
3 Adjusted earnings per share is adjusted for the items highlighted above, plus
the impact of corporation tax, and a £1.2 million deferred tax credit in respect
of previous periods which is not expected to repeat. See note 7 of the financial
statements.
4 Adjusted net cash is defined as cash and cash equivalents, less bank loans,
before unamortised issue costs as at the balance sheet date. It excludes lease
liabilities under IFRS 16.
5 Prior year values are restated following the adoption of the IFRIC agenda decision
in relation to configuration and customisation expenditure relating to cloud
computing arrangements. See note 2(A) in the notes to the financial statements.
TOPPS TILES PLC ANNUAL REPORT AND ACCOUNTS FOR THE 52-WEEK PERIOD ENDED 1 OCTOBER 2022 03
STRATEGIC AND
OPERATIONAL HIGHLIGHTS
• Second consecutive record year of revenue for the Group
• Group market share increased to 19.0% from 17.6% last
year – well on track to achieve “1 in 5 by 2025” goal
• 62% of Group sales to professional trade customers,
up 12ppts since 2015
• Record sales in the Topps Tiles brand, with right-sized estate and
ongoing growth through format development, category expansion
and world class customer service
• Average sales per Topps Tiles store up 25.3% compared to
2019 levels
• A record year of sales for Parkside – now trading at
breakeven and forecast to move into profit in 2023
• Pro Tiler Tools delivering strong sales and profits since
acquisition in March and Tile Warehouse becoming
established after starting trading in May 2022
• Strong Group recovery from Covid period – trading ahead
of 2019 levels with all businesses contributing to sales
growth in a developed and diversified Group
FINANCIAL SUMMARY
• Group revenue up 8.4% to £247.2 million
• Group gross profit up 3.6% to £135.4 million with gross
margin down due to business mix and inflation
• Costs well controlled, with increases due to inflation and
normalisation of business rates expense offset by cost savings
and reduction in store numbers
• Adjusted profit before tax up 4.0% to £15.6 million and
adjusted EPS up 2.0% to 6.14 pence
• Strong operational cash flows – closing net cash lower than
last year largely due to one-off items
• Strong balance sheet with £16.2 million net cash and new
£30.0 million revolving credit facility, committed to at least
October 2025
• Proposed final dividend of 2.6 pence per share (2021: 3.1
pence per share), giving a full year dividend of 3.6 pence
per share (2021: 3.1 pence per share), up 16.1% year
on year.
CURRENT TRADING AND OUTLOOK
• Robust trading in the first eight weeks of the new financial
year, with like-for-like sales in Topps Tiles up 3.4% year on
year and other parts of the Group performing in line with our
expectations.
• Our clear growth strategy, operational flexibility and strong
balance sheet leave us well-positioned to respond to a more
challenging macroeconomic environment and continued
delivery of our ‘1 in 5 by 2025’ goal.
Read more about our Market on pages 12 and 13
Read more about our Group Strategy on pages 16 to 33
Read more about our Financial Performance on
pages 34 to 43
Read more about our Environmental Leadership on
pages 24 and 25
Pictured above: Diamante White
OVERVIEW 04
GROUP AT A GLANCE
OMNI-CHANNEL
TOPPS TILES
The clear omni-channel market leader in the UK,
Topps Tiles offers specialist product expertise
and world-class customer service to trade and
homeowner customers through an award-winning
website and a nationwide store network.
PRODUCT OFFERING:
Topps Tiles offers an extensive range, with
approximately 2,000 tiles available to order and
a wide range of consumable products, including
own-brand products. Topps Tiles offers design
inspiration including unique, exclusive products,
at a wide range of price points.
CUSTOMER BASE:
Topps Tiles is aimed at both professional fitters (c.60%
of sales) and DIY customers (c.40% of sales).
CUSTOMER CHANNELS:
Topps Tiles trades from 304 stores around the
country, the largest store network by far in the
UK for tiles. In addition, toppstiles.co.uk is a
multiple award-winning website and our new trade
app allows even easier interaction with our regular
trade customers. Our central support team based in
Leicester provides telephone and digital support to
our large customer base.
KEY FACTS:
web visitors per week
c.160,000 98%
c.170,000 c.6-8%
of sales involve a store
store visitors per week
of sales transacted online
• Homeowners, traders and contractors
• Market leader
• 300+ stores
• Award-winning website
OUR STORES
Topps Tiles has 304 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
40
42
13
54
139
Read more about Omni-channel Strategy on
Read more about our Leading Product Strategy on
pages 26 and 27
pages 20 to 21
Read more about our Channels on pages 30 to 33
Read more about our Group Strategy on pages
16 to 33
TOPPS TILES PLC ANNUAL REPORT AND ACCOUNTS FOR THE 52-WEEK PERIOD ENDED 1 OCTOBER 2022 05
ONLINE PURE PLAY
COMMERCIAL
• Trade customers and contractors
• Digital specialists
• Architects, designers and contractors
• Works directly with clients
• Value-conscious homeowners
• Digital specialists
During 2022, we established a new sales channel,
Online Pure Play, which currently consists of two
businesses: Pro Tiler Tools and Tile Warehouse.
Pro Tiler Tools was acquired by the Group in March
20221 and Tile Warehouse was developed in-house
and launched in May 2022.
Pro Tiler Tools is an online specialist supplier of
tiling-related consumables and equipment to trade
customers. Pro Tiler stocks a broad range of recognised
trade brands which appeal to the professional fitter,
backed up by extensive product knowledge which
comes from decades of industry and tiling experience
of the founders and their team.
Tile Warehouse is an online only brand which offers
homeowners everyday low pricing on a focused range
of approximately 400 tiles and associated products.
The brand focuses on quality tiles at very competitive
prices and offers a simple brand proposition which gives
homeowners the confidence, value and choice to tackle
their next tiling project.
Note 1: A controlling 60% shareholding in Pro Tiler Limited was
acquired on 9 March 2022. The Group intends to acquire the
remaining 40% of the issued share capital from March 2024.
PARKSIDE
Parkside is a tile specialist, aimed at architects,
designers and contractors in the commercial market.
Parkside became part of the Group in 2017 and has
now established itself as one of the fastest growing
brands within this sector.
PRODUCT OFFERING:
With access to the Group’s scale, tile expertise
and relationships with all of the most important
suppliers around the world, the Parkside product
offering is extremely wide. A significant focus is on
environmentally friendly products with high recycled
content and innovative production techniques, always
backed up by great design credentials.
CUSTOMER BASE:
Parkside is focused on designers, architects and
contractors.
CUSTOMER CHANNELS:
In the commercial market, we serve the client through
our team of high-quality salespeople. These friendly,
creative 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 Commercial business is 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.
OVERVIEW 06
INVESTMENT CASE
REASONS
TO INVEST
1
2
ATTRACTIVE MARKET
DYNAMICS
We operate in a large market worth approximately
£1.3 billion, with stable long-term demand and minimal
disruption from alternative technologies. With a 19%
share of a fragmented market, we are already the market
leader by some distance, but still have lots of headroom
to grow.
The UK housing market is older and more underinvested
than in other European markets, suggesting a strong
pipeline of future demand.
3
STRONG
BALANCE SHEET
We have cash on the balance sheet, no debt and
significant headroom against our banking facilities,
which were renewed in October 2022 for another
three years. This provides substantial resilience against
any further economic shocks and allows the business
to invest for growth.
5
ENVIRONMENTAL
LEADERSHIP
We have a goal to be carbon balanced by 2030*
and intend to lead the tile industry in environmental
credentials. Our Commercial business, Parkside, is
already carbon neutral (Scopes 1 & 2). We strongly
believe that substantially reducing our impact on the
environment is good for the planet and all of our
stakeholders.
AMBITIOUS
GROWTH STRATEGY
Our goal is to deliver a 20% market share by 2025.
In our omni-channel Topps Tiles brand, we will increase
sales densities per store by continuing to offer innovative
and inspirational products, largely exclusive to us, as
well as expanding into new product areas, continually
developing our digital presence, and delivering world
class service. In our newer businesses, Online Pure Play
and Commercial, we will continue to take share as
we rapidly grow our scale. All of our businesses have
significant growth potential.
4
GOOD CASH GENERATION
AND RETURNS TO
SHAREHOLDERS
We generate high-quality profits with strong cash
conversions due to high gross margins, low working
capital requirements and relatively modest levels of
capital expenditure. Our updated capital allocation
policy sees dividend payments increasing from 50% to
67% of adjusted EPS over the next two years, a strong
sign of confidence.
Read more about our Market
on pages 12 to 13
Read more about our Group Strategy
on pages 16 to 33
Read more about our Financial Performance
on pages 34 to 43
* Read more about our Environmental Leadership and
our Carbon Balanced strategy on page 24 and TCFD
reporting on page 58
TOPPS TILES PLC ANNUAL REPORT AND ACCOUNTS FOR THE 52-WEEK PERIOD ENDED 1 OCTOBER 2022 07
OUR
STRENGTHS
1
2
MARKET-LEADING
OMNI-CHANNEL
CUSTOMER PROPOSITION
Our multi award-winning retail website has
approximately three times the web traffic of our next
largest competitor. Almost every homeowning 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.
NATIONWIDE
COVERAGE
We are the only tile retailer in the UK to offer full
national coverage, trading from 304 locations to
offer unrivalled convenience for trade customers and
allowing the whole UK population to access our
products and customer service in person.
3
4
SPECIALIST
EXPERTISE
As a Group 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, 76% of which are
exclusive to us.
WORLD-CLASS
CUSTOMER SERVICE
When homeowners shop with us, they are often buying
a product which is unfamiliar to them, requiring a high
level of support and design inspiration. Trade customers
require specialist expertise, technical knowledge and
stock availability. Across both customer groups, we are
proud of our high service levels – our overall customer
satisfaction scores of 90% are world class.
5
DIVERSE MARKET EXPOSURE
The Group has developed and diversified in recent years
and now operates across three business areas – Omni-
channel (Topps Tiles), Online Pure Play (Pro Tiler Tools and
Tile Warehouse) and Commercial (Parkside). This allows
the Group to sell into the residential market across all price
points, to the specialist trade market, to the contractor market
and to designers and architects in the commercial market,
all while retaining its specialism in tiles and related products.
Read more about Omni-channel Strategy on
pages 26 to 27
Read more about our Channels on
pages 30 to 33
Read more about our Leading Product Strategy
on pages 20 to 21
OVERVIEW 08
CHAIRMAN’S STATEMENT
A SECOND
YEAR OF
RECORD
SALES
.
THE BUSINESS HAS COMBINED
GOOD FINANCIAL PERFORMANCE
WITH STRONG STRATEGIC PROGRESS
OVER THE PAST YEAR.”
Darren Shapland
Non-Executive Chairman
INTRODUCTION
Welcome to the 2022 Annual Report for Topps Group. This
year the Group has made good progress across a number of
areas and delivered a strong financial performance, including a
second consecutive year of record sales and a significant step
forwards towards our “1 in 5 by 2025” market share goal.
Strategically, in the last 12 months we have created a third area
of the business, Online Pure Play, which offers the potential for
fast growth, which will sit alongside our market-leading Topps
Tiles brand and our Parkside business as we continue to develop
and diversify the Group.
PURPOSE, GOAL AND STRATEGY
The core purpose for 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 specialism in tiles
and associated products.
Two years ago, we announced our new goal which was
to grow our share of the domestic and commercial market
from 17% to 20% by 2025 – accounting for £1 in every £5
spend in the UK in our market. The market is substantial, worth
approximately £1.3 billion, and the goal therefore challenges
us to grow the business substantially. In 2021 we made good
progress towards our goal as we moved to 17.6% market share,
and I am pleased that our strong performance this year and the
strategic actions taken by the management team have resulted in
our market share increasing to 19.0% in 2022.
Our strategy to deliver this goal has evolved over recent years
with the addition of new parts to the Group and new focus
areas. The three trading elements of the Group – Topps Tiles, our
market-leading omni-channel business, Parkside, our Commercial
brand, and Online Pure Play, containing Pro Tiler Tools and Tile
Warehouse – are supported by three key Group-level strategic
levers – Leading Product, Leading People and Environmental
Leadership. Please see the Strategic Review for an extensive
discussion of our strategy, business model and progress.
PERFORMANCE
After two years of significant disruption resulting from Covid-19
trading restrictions, I am pleased to be able to report on a year
where the business was able to trade freely. Revenues increased
to £247.2 million, 8.4% higher than what was a record year
in 2021. Adjusted profit before tax was 4.0% higher than in
the prior year at £15.6 million (2021: £15.0 million), with
net margins slightly lower as a result of the changing shape of
the business and inflationary pressures. Net cash at year end
was £16.2 million, down from £27.8 million last year, with
strong operational cash flows offset with a number of one-off
items, including the acquisition of Pro Tiler Limited. The health
of our balance sheet remains a core strength of the Group,
and I was pleased that we were able to agree a new £30.0
million banking facility soon after the year end, which is currently
unused and provides great resilience to the business. A full
discussion of our financial performance can be found in the
Financial Review section of this report.
TOPPS TILES PLC ANNUAL REPORT AND ACCOUNTS FOR THE 52-WEEK PERIOD ENDED 1 OCTOBER 2022 09
DIVIDEND
During the year we announced an updated capital allocation
policy which prioritised business resilience and investment, but
also recognised that we are able to increase our level of cash
returns to our Shareholders. In line with that policy, we are
currently moving from what was a 50% payment of adjusted
post-tax profits to Shareholders last year, to a 67% payment from
next year onwards. As such, this year we are recommending a
final dividend of 2.6 pence per share, taking the total dividend
for the year to 3.6 pence per share, representing 58% of 2022
adjusted post-tax profits, and 16.1% higher than last year.
THE BOARD AND MANAGEMENT TEAM
Following significant change to both the Executive and
Non-Executive Directors in 2021, I am pleased that 2022 has
been a period of stability in the Boardroom. We have already
benefitted from significant contributions from Kari Daniels and
Diana Breeze in their roles as Non-Executive Directors, and
Stephen Hopson, our CFO, has provided strong leadership and
support to Rob Parker since his appointment at the end of 2020.
Overall, I am satisfied that all members of the Board are adding
significant value, an opinion supported by our Board Evaluation
process which is summarised on page 75. In line with best
practice, all Directors will be standing for re-election at the 2023
AGM and I would invite the support of all Shareholders.
CORPORATE GOVERNANCE
As 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. 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
continues to be a challenging business environment.
SHAREHOLDER ENGAGEMENT
The Board values the opportunity to engage with Shareholders
and we have devoted significant time to this over the last year.
This engagement includes our Executive management team
meeting with Shareholders to discuss performance on a regular
basis, as well as providing opportunities for larger Shareholders
to meet with me as well as Keith Down, our Senior Independent
Director, and other Directors as required. In addition, this year
we have engaged with Shareholders on a number of specific
matters such as our revised capital allocation policy and our new
remuneration policy, and we are grateful for the input we have
received from holders on these matters. The detail is described
more fully in the Corporate Governance Report on page 70.
Over the course of the last year, we have noted that the
concentration of our shareholding base has increased, such that
a significant percentage of the equity is owned by a smaller
number of holders than historically has been the case. We will
continue to ensure suitable opportunities for engagement with all
Shareholders moving forward.
AGM
Following the results of the last two Annual General Meetings,
this year the Board is not proposing certain special resolutions
concerning share capital management. As described in the
Notice of AGM, these resolutions are considered standard
for UK listed companies, and are in line with the Investment
Association’s Share Capital Management guidelines. The
Board regards these resolutions to be in the best interests of
all Shareholders and has been grateful for the support of the
majority of Shareholders in previous years. However, we
understand that some non-UK resident investors take different
views on these matters, and, following our programme of
Shareholder engagement and noting the results in the previous
two years, we are not proposing these resolutions at the 2023
AGM as we do not believe they will command sufficient
Shareholder support to be approved.
OUR PEOPLE
Topps Group is a customer service-based business and, as a
result, our people are at the heart of our organisation. We make
a great deal of effort to engage with colleagues at all levels of
the business; this process is described in the Leading People and
Section 172 sections of this report, including a key role played
by Kari Daniels as our Employee Engagement Director. The
whole Board and Executive team are extremely grateful for the
hard work, tenacity and commitment of all colleagues across
the Group. We take great pride in listing the names of
all colleagues in this Annual Report, starting on page 173,
and once again my thanks go out to all of them.
SUMMARY
The business has combined good financial performance with
strong strategic progress over the past year. We continue to
develop and diversify the Group and are making good progress
against our market share goal which will deliver significant value
to Shareholders and other stakeholders. Although the outlook for
the wider economy is challenging, we are well positioned as a
business and I look forward to the next period with a sense of
confidence. I hope you enjoy reading this report.
Darren Shapland
Non-Executive Chairman
OVERVIEW 01 STRATEGIC
REPORT
The content of this Strategic Report meets the content requirements of
the Strategic Report as set out in s414a of the Companies Act 2006.
This Strategic Report and Chairman’s Statement 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.
CONTENTS
Marketplace
Business Model
Our Strategy
– Leading Product
– Leading People
– Environmental Leadership
– Omni-channel – Topps Tiles
– Online Pure Play – Pro Tiler Tools
and Tile Warehouse
– Commercial – Parkside
Key Performance Indicators
Financial Review
Risks and Uncertainties
Section 172 Companies Act 2006
Sustainability
TCFD Disclosures
Going Concern and Viability Statement
12
14
16
20
22
24
26
30
32
34
36
42
46
50
58
62
Pictured: Pitsbury Grey and Pitsbury Grey Pattern
12
MARKETPLACE
KEY STATISTICS
UK HOUSE PRICES AND TRANSACTIONS
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House Prices
Transactions
Source: Nationwide, HMRC
CONSUMER CONFIDENCE
0
-10
-20
-30
-40
-50
-60
9
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Consumer Confidence
Source: GFK
ONS MARKET SIZE
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, as well as new build residential
property, including housebuilding and apartment blocks. Within
Topps Group, Topps Tiles and Tile Warehouse are largely
focused on the domestic market, Parkside is focused on the
commercial market, and Pro Tiler Tools serves trade customers
and contractors who may be working across either market.
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 October 2022
report estimates the total market in 2022 at £423.8 million at
MSP (manufacturers’ selling prices), which is significantly up
from £392.4 million in 2021 and £327.0 million in 2020.
The projection for 2023 is a 12.7% fall to £370 million as the
economy shrinks, with a further fall in 2024, followed by growth
that will be ahead of GDP development from 2025 onwards as
market conditions improve.
At selling prices, we estimate the tile market across the domestic
and commercial sectors to be in the region of £800 million
annually. When combined with adhesives, grouts and tools, the
market is in excess of £1 billion. Across all products sold in Topps
Group, we estimate that our market is around £1.3 billion.
DOMESTIC TILE MARKET
The domestic tile market is large and offers long-term potential
– of the 23.5 million dwellings in England, the average age
is around 70 years, giving a significant and growing need for
repair, maintenance and improvement spend (source: English
Housing Survey, DLUHC).
33,000
31,000
29,000
27,000
25,000
23,000
21,000
19,000
17,000
15,000
)
M
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(
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Pictured: Diamante White
Private Housing RMI
Private Commercial New Work
Source: ONS
MINTEL: UK CERAMIC TILE MARKET AT MSP
440
420
400
380
360
340
320
300
371.5 371.7 375.5
423.8
392.4
397.3
370
369.6
351.5
327
-
-
25.0%
20.0%
15.0%
10.0%
5.0%
0
-5.0%
-10.0%
-15.0%
2017 2018 2019 2020 2021 2022 2023 2024 2025 2026
YoY change %
Market size at MSP £m
Source: Mintel
TOPPS TILES PLC ANNUAL REPORT AND ACCOUNTS FOR THE 52-WEEK PERIOD ENDED 1 OCTOBER 2022
13
Domestic demand in 2020 was very low due to the Covid-19
pandemic, which had a rapid and strong impact on both supply
and demand. However, in the periods unaffected by lockdowns,
and then from the later half of 2021 onwards, a number of
factors have been particularly favourable for the domestic
market, resulting in robust market demand. These factors include
people spending more time in their home while at the same time
having a restricted choice for their economic activity, a boost to
housing prices and transactions through reduced stamp duty and
low interest rates, and substantial excess savings built up through
the lockdown period. As such, the market has been buoyant from
the spring of 2021 through 2022.
However, throughout 2022, a number of negative market factors
have started to weigh on sentiment.
Consumer confidence has been negative for all of 2022,
averaging -15 in the first three months of the financial year
before declining dramatically to end the year in September
2022 at -49, a record low, as a result of fears over the cost of
living crisis and the impact of the war in Ukraine (source: GFK).
UK housing prices are often 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 once again grew rapidly, with the
average price of a house in the UK at £264k (FY21: £238k)
(source: Nationwide), an increase of 11.0%. There were signs
of a slow down in house price growth towards the end of the
year, with prices falling month on month in September 2022.
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. Following a very strong 2021 driven by the cuts
in stamp duty, transactions in 2022 fell 21% to 1.22 million
(2021: 1.55 million) although this level remained higher than
either 2020 or 2019 (source: HMRC).
Construction output for private housing repair, maintenance
and improvement (RMI) increased by 27.7% across the period
on a value, non-seasonally adjusted basis (FY21: increased
by 0.8%) (source: ONS).
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 larger quantities
of products, in short timescales. Our Parkside business is able
to service both categories: we can leverage our access to
differentiated product through our supplier relationships, as
well as utilise the Group’s buying advantage and stock-holding
position to support volume sales.
The commercial tile market was hit hard by Covid-19 and, unlike
the domestic sector, is still some way off recovering to pre-
pandemic levels although it has shown modest growth in 2022.
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 increased
by 2.5% across the period on a value, non-seasonally adjusted
basis (FY21: declined by 8.7%) (source: ONS).
Pictured: Bespoke floor tile
STRATEGIC REPORT 14
BUSINESS MODEL
WHAT WE DO
Topps Group is the largest specialist distributor of tiles and
related products in the UK. The majority of our revenues
are generated from the domestic market for the renovation,
maintenance and improvement of UK homes, through our
market-leading Topps Tiles brand. 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. In 2022,
we have developed further, with the addition of the Pro
Tiler Tools and Tile Warehouse brands to the Group, both
focused on the online pure play market. All of the brands
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.
Read more about
Omni-channel on pages 26 and 27
O M N I -CHANNEL
T O P PS TILES
THE GROUP
Our Group functions provide
specialist support and scale
to all of our brands, in areas
such as buying, supply chain,
HR, finance, IT and legal.
P
R
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E PLAY C O M M E R CIAL
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Read more about Online
Pure play on pages 30 and 31
Read more about Commercial
on pages 33 and 34
TOPPS TILES PLC ANNUAL REPORT AND ACCOUNTS FOR THE 52-WEEK PERIOD ENDED 1 OCTOBER 2022
15
KEY RESOURCES
PEOPLE AND CULTURE
At our heart we are a customer service-based business and as
a result our team of people is one of our most important assets.
We employ 1,700 talented colleagues who either serve our
customers directly, or support those that do. We aim to provide
our customers with high-quality advice and inspiration, as well
as technical knowledge and a strong service ethic, 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 clients. Our culture is one of small teams with big
ambitions, who trust each other, celebrate success and put the
customer at the heart of everything they do.
BRANDS
Our Topps Tiles brand was founded in 1963 and, with its rich
history, has strong brand recognition across the UK. More recently,
we have added the Parkside and Strata Tiles brands into our
Commercial business, both of which have significant heritage in
the commercial sector. This year we acquired Pro Tiler Tools which
was founded in 2008 by a family of tilers and is extremely well
regarded within the trader community, and in addition we launched
Tile Warehouse as we continue to grow the business. There are
relatively few consumer-facing product brands in tiles so the brand
of the retailer or distributor is very important for customers and clients
and our brands are some of our most important assets.
STORE NETWORK
For our omni-channel Topps Tiles 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 304 stores across the UK with an average footprint of
6,000 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 approximately three years, giving us flexibility
to manage the portfolio.
FLEXIBLE SUPPLY CHAIN
We source our products directly from manufacturers on a
global basis, with a focus on building long-term strategic
relationships with our manufacturing partners, while allowing
flexibility including the ability to resource products from around
the world as we react to local conditions. 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 includes our 150,000 sq ft
warehouse in Leicester and a fleet of 22 commercial vehicles,
together with the standalone supply chain infrastructure acquired
as part of Pro Tiler Tools. This gives us an unrivalled control over
our inventory and delivery capability.
VALUE FOR STAKEHOLDERS
CUSTOMERS
We deliver value to our homeowner customers by
combining differentiated products with excellence
in customer service, the convenience of a nationwide
store network and world-class websites. This is
combined with competitive pricing to ensure that
all of our customers receive great value.
We 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, to deliver
value to our clients.
COLLEAGUES
We invest significant amounts of time, effort and
money each in the recruitment, retention and
development of our colleagues. In Topps Tiles stores,
commission payments often form a substantial part
of our remuneration and our overall reward package
is designed to support and maintain our high
standards of customer service.
SUPPLIERS
Our scale enables us to form long-term relationships
with many of the world’s largest manufacturers
of tiles and related products and we often work
collaboratively with them to develop new products,
guaranteeing supply for them and securing exclusive
products for us. Our strategic supplier base accounts
for 73% of our purchases and many of our supplier
relationships go back for decades.
SHAREHOLDERS
We aim to deliver sustainable growth in Shareholder
value. A part of this is through dividend payments and
our revised capital allocation policy sees our dividend
payments increasing from 50% to 67% of adjusted
EPS over the next two years.
SOCIETY
We are part of over 300 local communities around the
country. We play a full part in these communities, from
providing employment opportunities to engaging in
charitable activity and sponsoring local sports teams.
STRATEGIC REPORT 16
OUR STRATEGY
OUR GROUP GROWTH STRATEGY
IS DELIVERING . . . LEAVING US WELL
ON TRACK TO ACHIEVE OUR 20%
MARKET SHARE GOAL.”
Rob Parker
Chief Executive
STRONG
SALES IN
ALL AREAS
SUMMARY OF PERFORMANCE
2022 was a second consecutive record year of sales for Topps
Group. Following a record-breaking 2021, with revenues
rising to £228.0 million, 2022 saw the Group deliver a further
increase of 8.4%1 to £247.2 million. Adjusted profits before
tax rose 4.0% year on year1, despite significant inflationary
headwinds across gross margins and operating costs, adjusted
EPS was up 2.0%1 and the full year dividend has increased
16.1% to 3.6 pence.
The strength of the UK RMI market continued to support our
financial performance, but we believe our Group growth
strategy is delivering. We estimate our market share in the
year has increased from 17.6% in 2021 to 19.0% this year,
leaving us well on track to achieve our 20% market share goal
of “1 in 5 by 2025”.
Sales performance was strong over the course of the year.
Like-for-like sales in the Topps Tiles brand were up 22.7% on a
two-year basis in the first half. In the prior year, like-for-like sales
in Topps Tiles in the second half had been up 17.4% on a two-
year basis and we had expected that some of this performance
would soften this year as consumer spending on other areas,
particularly holidays, travel and leisure, began to recover.
In fact, like-for-like sales in Topps Tiles continued to grow slightly
in the second half of 2022, up 0.8% on a one-year basis.
Overall, like-for-like sales in Topps Tiles were up 9.4% in the
year on a one-year basis, and, when compared to the last
pre-pandemic period of 2019, average sales per store were
up 25.3%.
Sales in the Group’s other trading businesses were also
strong. Over the year, Parkside, our commercial brand, saw
sales growth of 26.7%1. Pro Tiler Tools delivered year-on-year
sales growth of 32.4% across the 12-month period and Tile
Warehouse generated a small amount of sales in its first few
months of trading.
Pictured: Flute Bright Skies and Cliq White
TOPPS TILES PLC ANNUAL REPORT AND ACCOUNTS FOR THE 52-WEEK PERIOD ENDED 1 OCTOBER 2022 17
We have maintained good stock availability over the course
of the year, despite a variety of external factors impacting the
Group, including significant supply chain disruption which
included a dramatic rise in global shipping costs, a national
shortage of HGV drivers and major issues at the UK’s ports.
The year also saw significant gas price inflation, which directly
increases tile pricing because gas, which powers kilns, accounts
for a very significant proportion of the cost of manufacturing
a tile.
Our response across the year has been to increase the prices
of tiles to pass on this inflation to our customers on a pound-for-
pound basis, which has protected gross profits but impacted the
gross margin percentage.
The war in Ukraine also impacted the tile industry, as
Ukraine has traditionally been an important source of clay
for tile manufacturers based in European markets, however
we successfully managed this through our strong supplier
relationships. Wider cost pressures impacted our overheads
including our own gas bill rising substantially, although these cost
pressures were well controlled.
Overall, our sales performance was strong across all our
businesses, our action on pricing, sourcing and cost control was
effective, and adjusted profits before tax were £15.6 million,
up 4.0% year on year1. An important benchmark is to compare
our performance in 2022 to our performance in 2019, the
last financial year before the Covid pandemic. Relative to that
trading period, Group sales in 2022 were £28.0 million higher
(a 12.8% increase), adjusted profit before tax was up £1.9
million (a 14.1% increase)2 and market share has increased
2 percentage points.
Our balance sheet remains strong. Net cash at year end fell to
£16.2 million (2021: £27.8 million) due to the acquisition of
Pro Tiler Limited, the timing of dividend payments and a number
of specific outflows, however, we have renegotiated our credit
facilities and begin the new financial year with substantial
financial strength. Given our profit performance and the strength
of our balance sheet, we are proposing a final dividend of 2.6
pence per share, taking the full year dividend to 3.6 pence per
share, 16.1% higher than last year.
Note 1: 2021 was a 53 week trading period, including 27 weeks in the second
half. Year-on-year variances are therefore either comparing 52 weeks in 2022
against to 53 weeks in 2021 or, for H2 comparisons, 26 weeks in 2022 against
27 weeks in 2021.
Note 2: Adjusted profit before tax in 2019 has been restated in line with the IFRIC
agenda decision on cloud computing (see the Financial Review) and includes the
trading loss from the Parkside brand which was excluded from adjusted profit at
the time.
Pictured: Torrano Gold
STRATEGIC REPORT 18
OUR STRATEGY
PURPOSE, GOAL AND STRATEGY
The core purpose of Topps Group is to inspire customers
through our love of tiles. This gives us a very clear focus on our
specialism in tiles and associated products, and encourages all
our colleagues to be passionate about the products we sell. It
also puts our customers at the heart of what we do and reminds
us that all roles in the Group are either serving customers directly
or supporting those colleagues that do.
The value of the UK market for tiles, adhesives, grouts and tools
is slightly over £1 billion, and the market for all the products we
sell is around £1.3 billion, across the residential and commercial
sectors.
In 2020, we announced a new goal for the business based
on our market share, which was 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 out-performance of the market by around
3.5% per year between 2020 and 2025.
In 2021, we estimated that our market share in periods where
we were allowed to trade without restrictions was approximately
17.6%, representing a good initial step towards our goal. This
year, including the addition of Pro Tiler Tools into the Group,
we have estimated our market share at 19.0%, leaving us well
on track to deliver our goal by 2025. Given the growth in the
market since 2020, our strategic moves into new areas and the
recent success of the core business, our revenues are already
almost at the level we set out for 2025 when the goal was
launched, £250 million, with three years to go.
In 2020, our strategy consisted of four elements – Retail,
Commercial, Leading Product and Leading People. However,
over the past two years, the Group has continued to develop
and diversify. Our growth strategy to deliver our goal now
consists of three business areas – Omni-channel (Topps Tiles),
Commercial (Parkside) and Online Pure Play (Pro Tiler Tools
and Tile Warehouse) – all of which are underpinned by our
three Group strategies of Leading Product, Leading People
and Environmental Leadership.
Pictured: Chandelier Pink/Grey at Lucia Restaurant, Harrogate
TOPPS TILES PLC ANNUAL REPORT AND ACCOUNTS FOR THE 52-WEEK PERIOD ENDED 1 OCTOBER 2022 19
Group Growth Strategy
OMNI-CHANNEL
ONLINE PURE PLAY
COMMERCIAL
LEADING PRODUCT
LEADING PEOPLE
ENVIRONMENTAL LEADERSHIP
Culture
We 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 Group way.
Pictured: Saplewood Grey
STRATEGIC REPORT 20
OUR STRATEGY
LEADING
PRODUCT
Topps Tiles is 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. Over the
last 18 months, the numerous pressures on the end-to-end
supply chain for tiles has made this advantage more important
than ever. Manufacturers have faced dramatic increases in
the cost of production relating to gas prices and raw material
inflation. Supply chains have been disrupted by HGV driver
shortages, strikes in our ports and significant increases in global
shipping costs.
Our ability to rely on long-term strategic relationships with our
strategic supplier base, freight forwarding and logistics partners
in this environment has been key. In the year, we sourced 73%
of our supply from our strategic supplier base (2021: 70%). We
have also responded by resourcing products towards suppliers
or regions of the world which are less impacted by the factors
above, as well as maintaining a strong inventory position.
As well as responding to the factors described above, we
continued our iterative programme to develop and produce
differentiated products that are innovative, of high quality and
exclusive to Topps Group. During the year, we launched 34 new
products into Topps Tiles (2021: 52 product introductions) and
76% of ranges within Topps Tiles are either exclusive or own
brand (2021: 74%).
We also curated a new product range for Tile Warehouse,
significantly extended our range of Everscape™ outdoor tiles,
rolled out Luxury Vinyl Tiles to the majority of Topps Tiles stores,
and are now trialling more category expansion in XXL tiles and
shower panels
The role of product brands within the business has been an area
of focus. First, we have created own brands which are portable
across the Group, such as:
• Dex™, our tiling tools brand aimed at the general builder
and DIY enthusiast;
• Regenr8™, our sustainable adhesive containing up to 53%
recycled content;
• Excel Bond™, our core own brand of adhesive; and
• Rise™, our new underfloor heating brand.
Secondly, we are increasing our understanding of the role of
proprietary brands within non-tile products aimed at our trade
customer base. Our acquisition of Pro Tiler Tools has increased
our access to a very wide variety of trade-focused brands and
we are currently working to understand the opportunity that these
products may provide for trade customers within our Topps Tiles
stores, where trade sales accounted for 59% of total sales in
2022, increasing to 60% in the final quarter.
Pictured: Elevo Oak Chevron and Revolution
TOPPS TILES PLC ANNUAL REPORT AND ACCOUNTS FOR THE 52-WEEK PERIOD ENDED 1 OCTOBER 2022 21
WHAT OUR CUSTOMERS SAY:
EXCEPTIONAL LOOK, GREAT VALUE
Lovely primrose yellow gloss tile, gives a nice
brick effect and the colour striking but subtle
all-in-one. Great against my grey/mid blue
colour scheme. So good I bought extra for
more kitchen coverage.”
Pictured: Matrix® Primrose Yellow Gloss Tile
STRATEGIC REPORT 22
OUR STRATEGY
LEADING
PEOPLE
The Group’s success is underpinned by industry-leading levels of
customer service. Our core product is both a building material,
requiring technical knowledge, and a decorative item, requiring
inspirational selling, and we need our colleagues to be able to
work and communicate effectively across both areas, requiring
high levels of capability and engagement.
Our Leading People strategy is based around four key areas:
recruitment and retention, colleague experience, capability
and well-being.
Recruitment and retention has been a challenge for many
companies over the last year. Given the tightness of the UK
labour market, we have focused on improving our recruitment
processes and better communicating our employer brand.
Our compensation strategy for service specialists within Topps
Tiles includes an average of £2,500 per year in commission
on top of basic salary, as well as pension contributions, an
employee discount scheme and no evening, late night or
Christmas working (which are common in equivalent jobs in
retail and hospitality).
Our culture, based around small teams with big ambitions,
who have high levels of trust and who celebrate success, is also
a big part of the attraction of working for Topps Group.
Other highlights in the year include the launch of our new charity
relationship with Alzheimer’s Society and an ongoing focus on
colleague engagement through our Team-Talk employee forums.
We also launched our new learning experience platform and
extended our coaching programme across middle and senior
managers. We aim to promote internally wherever possible, and
we were pleased that last year, 65% of candidates appointed to
management positions were internal promotions.
Our ongoing focus on well-being continues. A highlight last
year was the launch of our new partnership with Bupa, which
provides colleagues with occupational health support, an
improved employee assistance programme and access to Bupa’s
wealth of resources on well-being. Much more information can
be found on colleague experience, capability and well-being in
the Sustainability section of the Annual Report.
The success of our Leading People strategy is evidenced by our
customer satisfaction scores, and seen directly in our Employee
Engagement scores which we measure through our annual
MyVoice staff survey. Overall colleague engagement was at
80% in the last annual survey (FY 2021: 80%) compared with
the UK average of 68%.
Pictured: Support Office colleagues
Pictured: In store
TOPPS TILES PLC ANNUAL REPORT AND ACCOUNTS FOR THE 52-WEEK PERIOD ENDED 1 OCTOBER 2022 23
1
2
3
4
5
6
7
8
9
Pictured:
1.
2.
3.
4.
5.
6–10. Members of the Group logistics team
Colleagues in store
Parkside team
Pro Tiler Tools team
Tile Warehouse team
Topps Tiles managers
10
STRATEGIC REPORT 24
OUR STRATEGY
ENVIRONMENTAL
LEADERSHIP
Topps Group has a long history of considering its environmental
impact. In 2004, we established our first environmentally
focused working group; in 2010, we partnered with the
Carbon Trust, implementing lighting energy efficiency upgrades
which we have subsequently improved upon, year by year;
and, in 2013, we began reporting carbon emissions in our
Annual Report, providing a key metric for investors to evaluate
the Group’s environmental performance. However, the severity
of the global climate crisis is growing and the requirements
for all businesses to do much more to limit their environmental
impact is clear. As such, in recent years, Topps Group has been
accelerating its environmental agenda. In 2019, we established
our Sustainability Council, a cross-functional committee now
chaired by our Chief Executive, Rob Parker, which was tasked
with aligning the business to a low carbon model. In 2021, we
placed Environmental Leadership front and centre as part of the
core strategy of Topps Group and we challenged ourselves with
an ambitious goal of becoming carbon neutral across Scopes 1
and 2 by 2030, five years ahead of the BRC’s equivalent target
for the wider retail industry. This year we are delighted that our
Commercial business has become carbon balanced – the first
part of the Group to reach this milestone. Other improvements
have included the addition of EV chargers at our Head Office
and the renewal of our commercial fleet with more efficient,
lower polluting vehicles, which, alongside improved driver
training and the latest route planning software, led to our fleet
using 6% less fuel than the previous year (despite covering 2.1%
more miles). Carbon emissions per store are down 35.4% year
on year as a result of the Group moving to a renewable source
of electricity in 2022. We believe the Scope 3 emissions are
far more significant than Scope 1 and 2 while being harder
to monitor and influence. As such we will start to report the
Group’s Scope 3 emissions from 2024. In 2022, we have
added a second pillar to our Environmental Leadership strategy:
supporting circularity. As part of this, we have signed up to
WRAP’s Plastic Pact UK, obligating us to eliminate non-recyclable
plastic packaging, and we have begun promoting recycled
content in products at the point of sale, both online and in-store,
to help customers make environmentally conscious choices.
We have reformatted the five elements of our Environmental
Leadership strategy from 2021 into two main pillars, governed
by our Executive-led Sustainability Council. These are:
1. Achieving carbon balance (Scopes 1 and 2)
• Reduce as much as possible our current carbon emissions
• Use high quality, auditable carbon offsets to balance the
remainder by 2030
2. Supporting circularity
• Work with partners to minimise waste and manage the
remainder responsibly, with a focus on recycling
• Drive innovation to increase the use of recycled and
recyclable materials in tiles, related products, and
packaging (e.g. through the Plastic Pact UK)
ENVIRONMENTAL LEADERSHIP
1. CARBON BALANCED
BY 2030
2. SUPPORTING
CIRCULARITY
• Reduction strategy
• Waste and recycling
• Offset strategy
• Product and
packaging innovation
and sourcing
• Sustainability Council led by Chief Executive
GOVERNANCE
Pictured: Diamante White
TOPPS TILES PLC ANNUAL REPORT AND ACCOUNTS FOR THE 52-WEEK PERIOD ENDED 1 OCTOBER 2022 25
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CARBON BALANCED
WITH WORLD LAND
TRUST
These emissions are now being offset through the
protection of carbon-rich habitat via World Land
Trust’s Carbon Balanced programme.
Carbon Balanced is a unique programme that
leverages REDD+ (Reducing Emissions from
Deforestation and Forest Degradation) projects to
protect highly biodiverse areas under threat from
human activity. Since its outset, supporters of Carbon
Balanced have offset more than 610,000 tonnes of
carbon and provided over £2.5 million of funding.
With the planet warming up, the protection of
standing forest not only encourages native species
but also absorbs CO2 emissions in the future. We’re
supporting biodiverse WLT projects in Ecuador,
Mexico and Vietnam.
Parkside’s Carbon Balanced status underlines our
commitment to supporting a more sustainable future
for tile specifications. We do this by contributing to
a sustainable society through our partnerships with
organisations such as WLT, and through continuous
improvement and innovation in tile and installation
solutions.
Parkside’s partnership with World Land
Trust has become a key part of our Group-
wide Environmental Leadership strategy,
which has already protected more than
335,000m2 of biodiverse habitat through
the 40 for 40 programme.
This sees a donation of 40p donated to the Trust’s Buy
An Acre programmes, preserving natural habitats,
for every square metre of tiles sold which contains
more than 40 per cent of recycled content – currently
available on more than 40 tile ranges.
Earlier this year Parkside also achieved carbon-
balanced status with World Land Trust (WLT).
During an intensive phase of analysis, WLT
investigated the emissions caused by Parkside daily
operations. This included calculating energy use
at our offices and design studios, the emissions of
company fleet vehicles, the delivery of products,
sampling and more. Thanks to work already taken to
adopt better environmental practices, our total carbon
greenhouse gas emissions were measured at 405
tonnes for the year.
Pictured: Jaguar from Ecuador WLT project
STRATEGIC REPORT
26
OUR STRATEGY
OMNI-CHANNEL
Topps Tiles is our well-established, market-leading, omni-channel
specialist, serving the domestic RMI market, with significant
opportunities for further profitable growth.
position as the leading tile specialist in Internet Retailing’s annual
“RetailX Top 500” report and were ranked in the top 100
websites across the whole of the UK retail sector in that report.
This year saw record sales in Topps Tiles of £227.0 million
(2021: £219.4 million over 53 weeks), with like-for-like sales
growth of 9.4%. Sales per store were 25.3% higher than in the
pre-pandemic period of 2019 and total profit in Topps Tiles has
increased despite having 15% fewer stores compared to that
year. Our strategy for future growth focuses on three main areas:
increasing customer numbers, online and in store, delivering
world-class customer service, and management of our physical
store portfolio. Our customer base continues to be a mix of
professional trade customers and homeowners. Trade customers
are key as they provide repeat custom and also form an
important link to homeowners, both in terms of recommendation
and also direct sales on behalf of homeowners who prefer to
transact through their fitter rather than with us directly. We have
been actively growing our sales to trade customers over recent
years, as follows:
FY15
FY19
FY22
Q4
FY22
Trade customers:
% of sales in Topps Tiles
50%
56%
59% 60%
As such, the business is now more of a merchant than a
retailer, with the majority of sales being made to professional
tradespeople. This year, our sales of products other than tiles
(such as adhesives and grouts) have been encouraging and we
have maintained good levels of stock and offered particularly
keen value to our trade customers across these product areas,
including trade pricing, bulk deals and a trade loyalty scheme.
We also provide a direct sales team, which offers contractors and
larger trade customers an enhanced service. Growing customer
numbers is a key function of our digital operations, as we know
that many purchasing journeys start with research online. This year
we have made various technical improvements to our multiple
award-winning website, for example halving page load speeds
and adding new payment methods. We have launched a new
app for trade customers and extended our social media presence,
including a launch on TikTok. At the end of the year, we launched
a Topps Tiles range on Very.co.uk – this is Topps Tiles’ first move
into marketplaces and is a good fit given Very’s core customer
group is complementary to Topps Tiles’ customer base.
The output of this work is that we enjoy high levels of brand
awareness online. Our website, toppstiles.co.uk, has higher
brand searches than any other flooring retailer in the UK, we
have the second highest brand awareness (behind SCS) and
the third highest visibility (behind SCS and Carpetright) (Source:
“Flooring – Salience Index 2022”). We also maintained our
Our stores remain central to our omni-channel offer, particularly
for our trade customers. Given the nationwide coverage of our
store estate, almost every customer will visit a store at some
point in their purchasing journey, and almost all customers
will visit the website too. This year we have established three
store formats within Topps Tiles. 33 of our largest stores are
branded as “Topps Tiles’ Superstores”. These larger stores
contain the widest breadth of Topps Tiles range of products
as well as further amenities and are now, following modest
investment, outperforming the rest of the estate. Our 14 “Topps
Tiles Clearance” stores provide even greater value to customers,
while allowing us to clear mixed batch and discontinued lines.
The balance of 257 stores are core stores, which will continue
to deliver excellent service and range for trade and homeowner
customers.
This year we completed our multi-year programme of store
closures, and we believe our estate is now right-sized. During
the year we closed ten stores and opened one. The Topps Tiles
store estate has reduced from 372 stores at the end of 2017,
to 304 stores at the end of 2022, a reduction of 18%, and this
reduction in stores has helped drive incremental profits as we
transitioned sales from closed stores to other local stores while
reducing our cost base. Our estate management has been strong
throughout the process, and we finished the year with 11 closed
Topps Tiles sites (down from 21 at the start of the year, despite
ten additional Topps Tiles store closures in the year), of which
four more are expected to exit the business in the first half of
2023. We retain a flexible property portfolio, with an average
unexpired lease term to the next break opportunity of 2.8
years (2021: 3.3 years), or 2.6 years excluding strategically
important stores (2021: 3.0 years).
Through the quality of our digital operations, our store estate and
our colleagues, we aim to deliver world-class service. Homeowners
shop with us infrequently and require advice and expertise,
whether in store or online, and trade customers value strong local
relationships and technical knowledge. We were delighted that our
customer satisfaction levels improved again in 2022, from 88%
last year to 90% this year. That means that 90% of the c.17,000
customer surveys which we collect each year rated us as five out of
five – we believe this is a genuinely world-class result.
Overall, Topps Tiles has had a very strong year both financially
and strategically, with good growth in sales and profits, a right-
sized estate with new formats in place, further developments in
digital, a move into marketplaces in place with Very, growth in
trade sales and even higher satisfaction scores from our customers.
TOPPS TILES PLC ANNUAL REPORT AND ACCOUNTS FOR THE 52-WEEK PERIOD ENDED 1 OCTOBER 2022 27
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OUR OMNI-CHANNEL
JOURNEY
from a redesign of product pages to be more mobile-
friendly to stronger calls to action for “add to basket”
and “order a sample”.
We also improved our delivery offering for customers
online, providing pre-order options as well as a new
and improved online search tool to aid customers in
their search for their perfect product.
As well as creating a first-class digital experience for
users, we have continued our efforts to maintain our
already-outstanding search engine optimisation, and
we appear on page one of Google for 99% of high
volume tile-related keywords.
Social media continues to be of the utmost important
for us as we launched our own TikTok channel in
2022, as well as investing in paid social activity
across various platforms including video content on
YouTube.
This year our Retail brand Topps Tiles truly
moved into the world of omni-channel
trading with increased focus on our
digital offering to online customers and
tradespeople. The ongoing development
of our website and our continued focus on
improving the online experience has been reflected
in recognition from numerous awards from the likes
of Adobe, The Tile Association and the Global
eCommerce Awards. Our trade website also won in
the best B2B website category at the UK eCommerce
Awards and the Retail website was independently
named by Salience as the best site (by some way)
in the tiling industry for brand awareness, visibility,
authority, social score and referring domains.
With a focus on continuous improvement of
the online user experience, we complete around
50 pieces of website development every month,
Pictured: Stacara
STRATEGIC REPORT
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TOPPS TILES PLC ANNUAL REPORT AND ACCOUNTS FOR THE 52-WEEK PERIOD ENDED 1 OCTOBER 2022
OUR STRATEGY
TOPPS TILES AND
LEICESTER TIGERS:
A GRRRRRREAT
PARTNERSHIP
STRATEGIC REPORT
29
Our omni-channel brand
Topps Tiles enjoyed a second
successive year as the main
sponsor of Leicester Tigers,
which saw a record-breaking
sales year for Topps Group, and
the Premiership Championship
win for the Tigers.
The partnership not only saw the Topps Tiles’ brand displayed
at the team’s Leicester stadium, but also generated millions of
pounds worth of media coverage, through televised games,
social media, press coverage and sales of merchandise.
In addition, colleagues of Topps Group had access to match
tickets, including the corporate box hospitality, competitions and
raffles for signed balls and shirts, discounted merchandise, and
the Premiership Trophy made a special stop at Leicester support
office where colleagues had their photographs taken to mark the
Championship win.
“We are delighted to extend our partnership early with Topps
Tiles.” said Mark Davies, Chief Revenue Officer. “Since they
have arrived at the club, like all of our partners, Topps have fully
immersed themselves into our culture, bought into our vision, and
subsequently played a vital role in getting this club to the position
it is today.
“The supporters have also been at the heart of the partnership;
be it purchasing tiles themselves, taking part in the Topps
Golden Tile on a matchday, voting on the Try-umph of the month
competition through to securing the latest Tigers shirts.
“As such, we’d like to thank them for getting behind it along with
everyone within Topps Tiles and we are now excited to take the
next steps of our journey, together, over the coming years.”
Topps Tiles Retail Managing Director, Richard Carter, said: “We
share a lot of DNA with Leicester Tigers and our first two years
as lead sponsor have been a huge commercial success. The
partnership has flourished with good co-created social media
content, excellent TV coverage, including the two most watched
games of all time, fantastic press coverage and great player
appearances. These have combined to improve our brand
awareness.
“We have also been able to involve our colleagues with a
chance for our team to be able to lift the trophy as well as a
chance to meet the players and coaching team.
“We are proud to partner with the current Premiership champions
and are excited about the opportunity in the seasons ahead.”
• More than 350,000 tickets sold to matches at
the Tigers’ home stadium in Leicester, seeing the Topps
Tiles’ brand on shirts, programmes and perimeter
advertising boards
• TV audience for matches of 6.7 million, including
1.1 million for the Premiership Final
• Total duration of assets seen throughout the season was
more than 161 hours
• Social media reach of more than 68 million,
engagement of more than 5 million
30
OUR STRATEGY
ONLINE PURE PLAY:
PRO TILER TOOLS AND
TILE WAREHOUSE
In 2021 we identified a significant opportunity to add
complementary trading businesses which operate solely online,
serving different customer groups with different needs, but always
focused on our specialism of tiles and associated products, to
Topps Group. These businesses can benefit from the Group’s
scale, flexible supply chain, financial resources and operational
expertise, and in turn the rest of the business can benefit from
the specialist knowledge and experience of new colleagues
from these successful online businesses as they join the Group. In
2022, we added two new Online Pure Play trading businesses to
the Group – Pro Tiler Tools and Tile Warehouse – and we see the
potential for more in time.
PRO TILER TOOLS
The Group acquired 60% of the issued share capital of Pro Tiler
Limited in March 2022, with a contract to acquire the remaining
40% in 2024. Pro Tiler Tools is an online specialist supplier of
tiling-related consumables and equipment to trade customers.
Pro Tiler is highly complementary to the existing Group’s
operations, enabling us to serve trade customers both physically
(through Topps Tiles) and online (through Pro Tiler Tools).
Trading post-acquisition has been strong. On acquisition, we
reported that Pro Tiler’s sales in the 12 months to January 2022
were £11.9 million. Sales in the 12 months to September 2022
were £14.7 million and sales in the second half of the Group’s
financial year annualise at £16.5 million. Year-on-year sales
growth across the full year was 32.4%. The business runs at
a gross margin of approximately 30% meaning that continued
growth will have a dilutive impact to the Group’s percentage
gross margins, but will provide incremental gross profits. We
are targeting sales in excess of £25 million over time from Pro
Tiler Tools.
The Pro Tiler Tools platform, management and team also allow us
the opportunity to grow in other areas of the online market and
the Group is encouraging the team to deliver additional value
where appropriate. Additionally, Pro Tiler Tools has access to a
significant number of proprietary brands which we believe will
present opportunities for further long-term value creation for the
wider Group.
TILE WAREHOUSE
Tile Warehouse was launched in May 2022 as a new online-
only brand built from the ground up to offer homeowners
everyday low pricing on a focused range of tiles and associated
products. Tile Warehouse focuses on quality tiles at very
competitive price points and is complementary to Topps Tiles
as it will target a different customer group, while leveraging
the Group’s scale, supplier relationships, digital expertise
and financial resources. The market for online-only tiles in the
UK is estimated to be worth more than £100 million and we
are targeting sales of approximately £15 million from Tile
Warehouse within the first five years. We expect to make small
losses in the first few years as the brand is established but
believe it will play a significant role in the Group as we move
forward.
The first few months of trading have been focused on
establishing the technical aspects of the offer including product
range, samples, online functionality, search strategies, SEO
content and supply chain solutions. The brand has been
developed at a low cost however the investment in growth will
start in 2023 as we start to invest in pay per click to drive traffic
in a more meaningful way.
Pictured: Pro Tiler Tools at Futurescape 2022
TOPPS TILES PLC ANNUAL REPORT AND ACCOUNTS FOR THE 52-WEEK PERIOD ENDED 1 OCTOBER 2022 31
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BEHIND THE SCENES
STRATEGIC REPORT
32
OUR STRATEGY
COMMERCIAL:
PARKSIDE
Parkside is a specialist tile distributor, aimed at architects,
designers and contractors in the commercial market. Becoming
part of Topps Group in 2017, Parkside is now a top-five
competitor within the sector and is established as one of the
fastest growing brands in this market.
This year, Parkside delivered a fifth consecutive year of record
sales, up 26.7% to £10.9 million (2021: £8.6 million over
53 weeks). This represents a significant out-performance of
the new build commercial market, which was up 2.5% in the
year (across all product types) but remains 21.7% lower than
its level before the Covid-19 pandemic (source: ONS). We
estimate that the element of the commercial market for tiles and
associated products which is attractive for us to address is worth
approximately £200 million. On that basis, Parkside represents
at least a £25 million sales opportunity for the Group.
In the year, Parkside acquired more than 120 new clients,
ranging from one-off purchases to repeat business across multi-
site locations, and continued to push forward in its specialist
sectors of retail and leisure, hotels, infrastructure and transport,
and residential.
The business is building a strong sales culture and has further
opportunity to leverage the Group’s scale and infrastructure, in
areas such as brands, supply chain and inventory.
Environmental credentials are particularly important to architects
and designers focused on the commercial market, and we
work with them to build sustainability into their projects. This
year, Parkside became the first part of the Group to become
carbon neutral across Scope 1 and 2 emissions, building on
our ISO14001 accreditation, recycled and recyclable samples
packaging, commitment to sustainable products, our various CPD
sessions at our Clerkenwell Sustainability and Design Studio and
many other initiatives.
Parkside’s financial performance is improving at pace. Trading
losses in the year halved to £0.8 million (2021: £1.6 million
loss), however £0.7 million of that was from the first half year,
and the business was trading at breakeven by the final quarter.
We expect Parkside to deliver a positive contribution to the
Group’s profitability in 2023.
Pictured: Lucia Restaurant Harrogate
TOPPS TILES PLC ANNUAL REPORT AND ACCOUNTS FOR THE 52-WEEK PERIOD ENDED 1 OCTOBER 2022 STRATEGIC REPORT
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WHAT OUR CUSTOMERS SAY:
PARKSIDE IS A FANTASTIC TILE SUPPLIER . . .
Their extensive range is always being
updated with great new designs, shapes and
finishes. For jobs where the budget is tight,
they have a great house builder collection
and the high end collection is curated to bring
a special touch to any project – we recently
used Parkside’s Blake metro style tile in a deep
blue – striking. Parkside recent additions to
their ceramic tile range will bring a shock of
colour and texture to our designs and we look
forward to working continually with Parkside
in the future.”
Pictured: Inara™ Cloud and Blakes Blue
34
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
8.4%
2021: 18.3%
YoY: n/a
How We Calculate This
Total Group revenues.
Topps Tiles Like-for-Like Sales
Growth Year-on-Year*
9.4%
2021: 19.6%
YoY: n/a
Group Gross Margin
54.8%
2021: 57.3%
YoY: (2.5) ppts
How We Calculate This
Sales from Topps Tiles omni-channel
(stores and online) where stores have
been trading for more than 52 weeks.
How We Calculate This
Group gross profit divided by
Group revenue.
Adjusted Profit
Before Tax*
£15.6M
2021 restated: £15.0m
YoY: +4.0%
Adjusted Earnings
Per Share*
6.14p
2021 restated: 6.02p
YoY: +2.0%
Adjusted Net Cash*
£16.2M
2021: £27.8m
YoY: £(11.6) million
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
IFRS16.
Inventory Days
126
2021: 123
YoY: +3 days
How We Calculate This
Inventory value divided by cost of
sales multiplied by 365 days.
* As defined in the Financial Review
TOPPS TILES PLC ANNUAL REPORT AND ACCOUNTS FOR THE 52-WEEK PERIOD ENDED 1 OCTOBER 2022
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NON-FINANCIAL KPIs
Topps Tiles Customer Overall
Satisfaction Score
89.9%
2021: 88.4%
YoY: +1.5 ppts
Colleague Turnover
36.5%
2021: 31.2%
YoY: +5.3 ppts
How We Calculate This
Calculated from responses we
receive through our TileTalk customer
feedback programme in Topps Tiles
(omni-channel)1.
How We Calculate This
Total number of leavers in a period
divided by average number of
colleagues in a period, as a
percentage.
Carbon Emissions Per Store
(tonnes per annum)
Number of Topps Tiles Stores
at Year End*
15.5
2021: 24.0
YoY: (35.4%)
304
2021: 313
YoY: (9)
How We Calculate This
Actual electricity, gas and transport
fuel consumed2.
How We Calculate This
Number of Topps Tiles stores open
at 1 October 2022.
Notes:
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. Carbon emissions per store for
FY21 have been restated to remove emissions
connected with sub-contractors, which classify
as Scope 3 emissions and do not form part
of this metric.
* As defined in the Financial Review
Pictured left page: Diamante Lavender
Pictured below left: Sia Ivory
Pictured below right: Saplewood Grey
STRATEGIC REPORT 36
FINANCIAL REVIEW
INCREASE
IN REVENUE
AND PROFIT
I AM CONFIDENT THAT WE WILL CONTINUE
TO DELIVER GROWTH AND CREATE VALUE
OVER THE MEDIUM-TERM.”
CONFIGURATION COSTS IN A
CLOUD COMPUTING ARRANGEMENT
Following the IFRS Interpretations Committee’s agenda decision
in relation to configuration and customisation expenditure
relating to cloud computing arrangements, including Software
as a Service (SaaS), the Group has reviewed and revised its
accounting policy relating to IAS 38 “Intangible Assets”. This
has resulted in reclassifying £0.8 million of expenditure that was
previously capitalised as an intangible asset and expensing this
to the Consolidated Statement of Profit and Loss as administrative
costs. The impact on profit before tax for the 53-week period
ended 2 October 2021 is a reduction in profit before tax
and adjusted profit before tax of £0.3 million. The impact on
the 52-week period ended 1 October 2022 is a reduction in
profit before tax of £0.2 million. All 2021 comparatives in the
Financial Review and the financial statements have been restated
and further details are given in the notes to the accounts.
ADJUSTED MEASURES
The 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 line with the prior year, 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, and one-off gains and
losses through sub-lets.
In the period 2022–2024 we will also exclude the accrual
relating to the 40% purchase of shares of Pro Tiler Limited which
we expect to make from March 2024, which under IFRS 3 is
treated as a remuneration expense rather than an acquisition
cost, and this period we have excluded deal costs related to
the Pro Tiler Limited acquisition and set-up costs relating to Tile
Warehouse.
GROUP
REVENUE (£)
Year-on-Year: +8.4%
GROSS
MARGIN (%)
Year-on-Year: (2.5) ppts
ADJUSTED EARNINGS
PER SHARE (£)
Year-on-Year: 2.0%
2
.
7
4
2
0
.
8
2
2
2
.
9
1
2
8
.
2
9
1
6
.
1
6
5
.
8
5
3
.
7
5
8
.
4
5
6
4
.
6
4
1
.
6
2
0
.
6
9
1
0
2
1
2
2
2
9
1
0
2
1
2
2
2
2
5
.
1
5
0
2
5
9
1
5
1
2
2
2
5 Prior year values are restated following
the adoption of the IFRIC agenda
decision in relation to configuration and
customisation expenditure relating to cloud
computing arrangements. See note 2(A) in
the notes to the financial statements.
TOPPS TILES PLC ANNUAL REPORT AND ACCOUNTS FOR THE 52-WEEK PERIOD ENDED 1 OCTOBER 2022 Analysis of movements from adjusted profit before tax to statutory profit before tax are detailed below:
Adjusted profit before tax
Property
Impairment of property, plant and equipment
Vacant property and closure costs
Store closure impairments and lease gains and losses
Business Development
Pro Tiler Tools deal costs
Pro Tiler Tools share purchase accrual
Tile Warehouse set-up costs
Other
Business rates relief from April to September 2021*
Statutory profit before tax
37
2021
£m
(restated)
15.0
(1.0)
(2.1)
(0.2)
(3.3)
nil
nil
nil
nil
2.3
2.3
14.0
2022
£m
15.6
(0.5)
(1.7)
(0.2)
(2.4)
(0.2)
(1.6)
(0.5)
(2.3)
nil
nil
10.9
* In the second half of the prior year we included a normal level of business rates within adjusted profit, despite business rates relief of £2.3 million over this period, to
allow improved comparison with the future and prior years. The business traded without material restrictions in the second half of the prior year, and not including a
business rates expense within adjusted profit for this period would be unrepresentative of our underlying performance. This contrasts with the first half of the prior year
where we suffered material trading restrictions and so no adjustment for business rates relief was made.
Adjusted earnings per share is adjusted for the items listed above, as well as the impact of corporation tax. In addition, adjusted
earnings per share excludes a non-repeating credit of £1.2 million relating to deferred tax adjustments in respect of previous periods.
ACQUISITION OF PRO TILER LIMITED
The Group acquired a controlling 60% shareholding of Pro Tiler Limited on 9 March 2022, for consideration of £5.3 million in cash,
plus a closing adjustment of £0.2 million. The Group will acquire the remaining 40% of the issued share capital from March 2024,
based on an agreed multiple of profits for the 12-month period to March 2024.
Following the completion of a purchase price allocation exercise over the second half year, the Group recognised the following
amounts on acquisition: tangible assets of £1.6 million, including £0.9 million of net cash, £0.2 million of net working capital and
£0.5 million of fixed assets, and intangible assets consisting of the brand value of £4.1 million net of deferred tax and goodwill of
£2.1 million, together with a non-controlling interest of £2.3 million.
The brand asset will be amortised over ten years in line with it’s estimated useful economic life.
The purchase of the remaining 40% of shares in Pro Tiler Limited will be accounted for as a remuneration expense over the earn out
period, rather than contingent consideration, as required by IFRS 3, due to certain conditions placed on the selling shareholders to
remain employed by the Group during this time. This expense will be treated as an adjusting item over the next two years and will
therefore reduce the Group’s statutory profit in forthcoming trading periods. This expense is not treated as a deductible expense for
corporation tax purposes and therefore has increased the Group’s effective rate of corporation tax in FY22 and over the next two
financial years as a result of this accounting treatment.
The Group has consolidated the financial performance of Pro Tiler Limited from the date of acquisition, including revenue of £9.2
million and profit before tax of £0.6 million. Acquisition costs of £0.2 million and remuneration costs of £1.6 million in relation to
the 40% share purchase were treated as adjusting items.
STRATEGIC REPORT 38
FINANCIAL REVIEW
STATEMENT OF FINANCIAL PERFORMANCE
REVENUE
Total revenue for the 52-week period increased by 8.4% to
£247.2 million (2021: £228.0 million). Revenue consolidated
into the Group accounts by brand was as follows:
GROSS MARGIN AND GROSS PROFIT
Group gross margin was 54.8%, a decrease from 57.3%
in the prior year. Group gross profits increased £4.7 million
to £135.4 million, including £3.2 million relating to
Parkside, Pro Tiler Tools and Tile Warehouse.
The change in gross margin was due to three main factors.
Within Topps Tiles, the impact of higher cost of goods following
increases in gas prices, other raw materials and shipping costs
in the year have been passed through to customers on a pound-
for-pound basis. Our pricing response has protected gross profits
but impacted the gross margin percentage by (0.9) percentage
points. Secondly, there have been changes in customer and
product mix, specifically improved sales to trade customers,
more sales of products other than tiles, and new product areas
including outdoor tiles and luxury vinyl tiles, which impacted
gross margins by (0.5) percentage points. Finally, the growth in
our other trading businesses, specifically the acquisition of Pro
Tiler Tools and the growth in sales from Parkside, reduced Group
gross margin by (1.3) percentage points. Other minor changes
increased gross margins by the balance of 0.2 percentage
points.
Gross profits increased across each of the three business areas
due to the positive sales impact of the factors above.
Revenue by brand (£m)
2022
(52 weeks)
2021
(53 weeks)
Topps Tiles
Parkside
Pro Tiler Tools
Tile Warehouse
Topps Group
227.0
10.9
9.2
0.1
247.2
219.4
8.6
0.0
0.0
228.0
Variance
+3.5%
+26.7%
n/a
n/a
+8.4%
Topps Tiles like-for-like sales were 9.4% higher than the prior
year, which consisted of a 19.7% increase in the first half of the
financial year and a 0.8% increase in the second half.
Total revenue in Topps Tiles was up 3.5% year on year to
£227.0 million. There was a net closure of nine Topps Tiles
stores in the year and the brand finished the trading period with
304 trading stores. Prior year revenue 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 allowed to enter to visit the trade
counter only.
In the commercial market sales to our clients through Parkside
were up 26.7% year on year to £10.9 million. The Group
consolidated sales of £9.2 million from the seven months of
ownership of Pro Tiler Tools and recorded a further £0.1 million
of sales in the start-up period of Tile Warehouse.
Overall, we estimate that 62% of sales in the Group are made
to trade or professional customers, with 38% of sales direct to
homeowners.
ADJUSTED PROFIT
BEFORE TAX (£M)
Year-on-Year: 4.0%
TOTAL DIVIDEND
DECLARED (P)
Year-on-Year: +16.1%
ADJUSTED NET
CASH/DEBT (£M)
Year-on-Year: £(11.6)m
FREE
CASH FLOW (£M)
Year-on-Year: +1.8%
7
.
5
1
0
.
5
1
6
.
5
1
6
.
3
5
.
3
4
.
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.
3
5
.
3
5
0
2
5
9
1
5
1
2
2
2
9
1
0
2
1
2
2
2
8
.
7
2
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.
6
2
2
.
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1
0
2
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.
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4
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.
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8
.
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2
9
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0
2
5 Prior year values are restated following the adoption of the IFRIC agenda decision in relation to configuration and customisation expenditure relating to cloud computing
arrangements. See note 2(A) in the notes to the financial statements.
TOPPS TILES PLC ANNUAL REPORT AND ACCOUNTS FOR THE 52-WEEK PERIOD ENDED 1 OCTOBER 2022 39
STRATEGIC REPORT
WHAT OUR CUSTOMERS SAY:
FANTASTIC LOOK AND FINISH
Really happy with these tiles—we wanted a spa/hotel
kind of finish to the bathroom, and these are perfect.
They have a lovely smooth buttery feel to them, and
look brilliant. Bought the Vanilla cream tone, used a
cream grout and found a perfect edging colour so they
look super professional. As ever, service from Topps
Tiles was excellent: courteous, helpful, friendly and
professional.”
Pictured: Regal® Vanilla Matt Tile
40
FINANCIAL REVIEW
OPERATING EXPENSES
Operating expenses were £120.6 million compared to £112.7
million in FY21 (restated), which included c.£6.7 million of
business rates relief. On an adjusted basis, operating expenses
increased from £111.7 million in FY21 to £116.0 million
in FY22.
The £4.3 million increase in adjusted operating costs is
explained by the following key items:
£ million
FY 2021 adjusted operating expenses
(restated)
Reversal of H1 2021 business rates relief
Reverting to a 52-week accounting period
Holiday pay accrual normalisation
Increased utilities expense
Other regulatory and inflationary cost increases
Reduced store space (310 stores on average vs
331 in 2021)
Other savings
Commercial and Online Pure Play
FY 2022 adjusted operating expenses
111.7
4.4
(2.0)
1.4
1.0
3.5
(4.3)
(2.0)
2.3
116.0
FINANCE INCOME AND COSTS
Interest on bank loans and overdrafts, net of bank interest
receivable, was £0.3 million (2021: £0.4 million), relating
to commitment fees payable on the revolving credit facility.
Net interest payable under IFRS 16 was £3.6 million, resulting
in total net finance costs of £3.9 million (2021: £4.1 million).
PROFIT BEFORE TAX
Excluding the items detailed in the Adjusted Measures section
above, adjusted profit before tax was £15.6 million (2021
restated: £15.0 million). The Group adjusted profit before tax
margin was 6.3% (2021: 6.6%). Statutory profit before tax was
£10.9 million (2021 restated: £14.0 million).
TAX
On an adjusted basis, the effective rate of corporation tax for the
period was 21.8% (2021: 21.6%).
The effective rate of corporation tax for the period on a statutory
basis was 16.0% (2021: 23.5%). The tax expense includes a one-
off deferred tax credit in relation to previous periods of £1.2 million
which is excluded from adjusted earnings per share metrics.
EARNINGS PER SHARE
Adjusted earnings per share were 6.14 pence (2021 restated:
6.02 pence). Basic earnings per share were 4.60 pence (2021
restated: 5.47 pence). Diluted earnings per share were 4.55
pence (2021 restated: 5.41 pence).
DIVIDEND AND DIVIDEND POLICY
In the 2022 Interim Results, the Group outlined a new Capital
Allocation and Dividend Policy. We indicated that we would
prioritise the following:
1. Business resilience – we are an operationally geared
business and our balance sheet and banking facilities must
be strong enough to withstand cyclical economic downturns
and unexpected shocks like Covid-19;
2. Investment in the core business – we operate a physical
store estate which requires investment to remain attractive
to customers, and we will support our strategy through
merchandising, store refits and relocations;
3. Value creative opportunities – we believe it is beneficial
to retain some cash to take advantage of value creation
opportunities, such as bolt on M&A deals or other
investments in growth;
4. Dividends – we recognise that equity has a cost, and we
understand the importance of regular dividend payments
to our Shareholders.
The Board indicated that over the period from 2021 to 2023, it
intended to increase the dividend payout ratio from around 50%
of adjusted earnings per share to around 67%. As such, this
year, the Board is proposing a final dividend of 2.6 pence per
share, bringing the full year dividend to 3.6 pence per share,
a year-on-year increase of 16.1%. This represents 59% of the
adjusted earnings per share of 6.14 pence.
The shares will trade ex-dividend on 22 December 2022 and,
subject to approval at the Annual General Meeting, the dividend
will be payable on 3 February 2023.
STATEMENT OF FINANCIAL POSITION
ACQUISITIONS & DISPOSALS
The most significant acquisition in the period was the purchase
of 60% of the shares of Pro Tiler Limited, as described in the
section above.
In the prior year we disposed of three freehold or long leasehold
stores for £2.1 million. There were no freehold or long leasehold
store disposal or acquisitions in the current year.
At the period end the Group held two freehold or long
leasehold sites, with a total carrying value of £1.0 million
(2021: two freehold or long leasehold sites valued at £1.0
million). The carrying value is based on the historic purchase
cost and capital expenditure less accumulated depreciation.
CAPITAL EXPENDITURE
Capital expenditure in the period amounted to £3.2 million
(2020: £4.4 million), a reduction of 27% year on year.
Key investments were as follows:
• Topps Tiles stores – including one new opening, store
improvements, merchandising and maintenance –
£2.5 million
• LED store improvement programme £0.3 million
• Group IT developments £0.4 million.
The Board expects capital expenditure in the year ahead to
be between £6 million and £7 million. This compares to an
average of £8.1 million in the four years before the pandemic
(FY16 to FY19) and is broadly in line with depreciation on
property, plant and equipment and intangible assets. This
amount 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.
TOPPS TILES PLC ANNUAL REPORT AND ACCOUNTS FOR THE 52-WEEK PERIOD ENDED 1 OCTOBER 2022 41
BANKING FACILITIES
On 21 October 2022, the Group entered a new syndicated
£30.0 million revolving credit facility with two banks, which
is committed to October 2025 with extension options for a
further two years available. The new facility contains a slightly
favourable interest rate structure compared to our previous £39.0
million banking facility, which was due to expire in June 2023,
and provides continued balance sheet strength and financial
resilience for the Group into the medium term. At the year end,
no banking facilities were drawn (2021: nil). Based on our
year end net cash of £16.2 million we have £46.2 million
of headroom to our new banking facility at year end (2021:
headroom of £66.8 million against the £39.0 million facility
in place at that time).
FORWARD GUIDANCE
Increased cost pressures will impact the profitability of the
business in 2023. Overall, we expect around £5.0 million of
inflationary pressures year on year across our overhead base,
in utilities, employment costs, property costs and other expenses.
We will be able to offset some but not all of this through
efficiency savings and as a result believe our profitability may
modestly fall next year, in line with current market expectations.
While the Group has not historically demonstrated much
seasonality in sales or profits across the two halves of the
financial year, in 2023 we expect Group profitability to be more
weighted towards the second half. The key drivers of this are: a
gas expense which we expect to be approximately £1.7 million
in the first half and £0.8 million in the second half; a normalised
holiday pay accrual, with a debit in the first half of £0.7 million
and a credit in the second half of £0.7 million; continued
growth in the newer parts of the Group across the course of the
year; and some easing in elements of supply chain costs as the
year progresses.
CURRENT TRADING AND MARKET CONDITIONS
FOR THE YEAR AHEAD
There are substantial macroeconomic headwinds impacting
both UK consumers and businesses. Consumer confidence is
currently near to record lows and Government forecasts suggest
the country is entering a recession which will continue throughout
2023 and possibly into 2024, impacting real incomes for UK
consumers. Against this backdrop, our trading performance has
been robust, with like-for-like sales growth in Topps Tiles over the
first eight weeks of the new financial year of 3.4% and other
parts of the Group performing in line with our expectations. Our
market share growth during 2022 and our progress towards our
goal of “1 in 5 by 2025”, combined with our clear strategy and
strong balance sheet, give us confidence that we will continue
to deliver growth and create value over the medium term.
INVENTORY
Inventory at the period end was £38.6 million (2021: £32.8
million) representing 126 inventory days (2021: 123 inventory
days). The £5.8 million year-on-year increase in stock includes
£2.6 million of additional stock relating to Pro Tiler Tools and
Tile Warehouse, an increase of £4.2 million due to higher
cost prices and a slight reduction of £1.0 million relating to the
volume of stock in Topps Tiles.
CASH FLOW
On a statutory basis, net cash from operating activities was
£22.9 million, compared to £26.4 million in the prior year.
The table below analyses changes in adjusted net cash flow:
2022
£m
2021
£m
Cash generated by operations
including interest and capital
elements, before WC movements
Payment of deferred VAT
Other changes in working capital
Capital Expenditure
Disposals
Interest
Tax
Other
Free cash flow
Acquisition of Pro Tiler Limited,
net of cash and debt acquired
Dividends
Change in adjusted net cash
Adjusted net cash at end of
period
18.5
(2.1)
(8.9)
(3.2)
0.2
(0.3)
(3.5)
0.1
0.8
(4.4)
(8.0)
(11.6)
20.7
(3.7)
(10.9)
(4.4)
2.1
(0.5)
(1.5)
0.0
1.8
0.0
0.0
1.8
16.2
27.8
Adjusted net cash reduced by £11.6 million (2021: £1.8
million increase). This reduction was driven by the following main
factors: a £11.0 million outflow in working capital including
a £4.4 million increase in inventory, the repayment of £2.1
million of deferred VAT, a decrease of £3.5 million in other
payables and an increase of £1.0 million in receivables; the
purchase of 60% shares of Pro Tiler Limited at a cash cost of
£4.4 million net of cash acquired and including the repayment
of a loan immediately following acquisition; and the payment of
£8.0 million of dividends, which included the full year payment
relating to FY21 as well as the interim dividend from FY22.
Cash and cash equivalents at the period end were £16.2
million (2021: £27.8 million) with nil borrowings (2021: nil).
RETURN ON CAPITAL EMPLOYED
The Group’s return on capital employed, including the impact
of leases, improved from 17.2% in 2021 to 17.3% in 2022
following a slight increase in adjusted profit. Lease adjusted
capital employed increased £7.2 million over the financial
year as a result of a £4.0 million increase in total equity and
a £11.6 million reduction in adjusted net cash, partially offset
by a £8.4 million reduction in lease liabilities year on year. The
Group defines return on capital employed as the annual adjusted
operating profit divided by the average capital employed (net
assets plus net debt, including lease liabilities).
STRATEGIC REPORT 42
RISKS AND UNCERTAINTIES
Our risk management approach has been developed to enable the business to identify, assess and manage the key risks by the
business at corporate, strategic and operational levels. These risks inherently incorporate the significant risks faced by the business,
which are summarised in the following pages. The key steps of the Group’s risk review framework are outlined below:
• an annual strategic risk workshop which is attended by the Chair of the Audit Committee, Head of Internal Audit, Executive
Committee members and other key senior members of the management team;
•
•
the production of a strategic risk register which analyses the likelihood and impact of risks on an inherent and net basis;
the Board, supported by the Audit Committee, conducts a robust review of the strategic risk register; 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
MACROECONOMIC CHANGES AND CONSUMER CONFIDENCE
The general economic climate, and
specifically consumer confidence, are
important to Topps Tiles and events
that may affect these factors present
a financial risk to the business. The
current macroeconomic outlook may
deteriorate due to a combination of
factors, such as high inflation and
rising interest rates, which may lead
to a decline in the tile market.
Over the long-term, consumers need
to feel confident and have access
to funding to invest money into their
homes. A reduction in consumer
confidence or ability to fund
home improvements as a result of
deteriorating macroeconomic factors
could result in a contraction of the
tile market, impacting revenue and
profits.
The business is in a strong position to face any
market contraction. We have a strong net cash
position with no debt and retain a significant
level of available funding via a £30 million
banking facility committed until October 2025.
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
Several key factors, most notably inflation, have changed over the past year which could have a material impact on consumer
confidence and their ability to fund home improvements. The future economic outlook is uncertain and is likely to deteriorate further,
which has resulted in the increase in this risk.
INFLATIONARY COST INCREASES OF PRODUCTS FOR RESALE AND NOT FOR RESALE
Inflationary pressures are likely
to result in increased costs for
the business, which may be
difficult to fully offset or pass on to
consumers, particularly in the current
macroeconomic climate. This could
result in reducing profit margins and
absolute profits if revenue does not
sufficiently increase to offset lower
margins.
The business has experience in successfully
managing cost pressures. Strategic sourcing
plans incorporate alignment with key sourcing
partners and those geographically well placed
to minimise inflationary pressures.
We operate an effective foreign currency
hedging policy and utility contracts are fixed
until September 2023. The business is able
to reduce certain variable costs. Sales prices
may also be actively managed, recognising the
limited ability of consumers to absorb price rises.
The current level of inflation across the
UK economy has led to CPI of 9.9%
in September 2022 and there are
inflationary pressures across much of
the world.
Suppliers may look to pass on
increases in their input prices and
fluctuations in exchange rates may
also have a detrimental impact
on costs.
Key areas of potential inflation across
goods not for resale are utility bills,
rent and staff wages, amongst other
variable costs.
STATUS N
Inflation in the UK and in many parts of the world has increased significantly in 2022, and is forecast to continue at high levels
for at least 12 months.
TOPPS TILES PLC ANNUAL REPORT AND ACCOUNTS FOR THE 52-WEEK PERIOD ENDED 1 OCTOBER 2022 43
Risks
Impact
Mitigation
SUSTAINABILITY AND CLIMATE CHANGE
In line with all businesses we have a
responsibility to focus on sustainability
and climate change to minimise our
impact on the environment and our
communities.
If we do not do this successfully,
there is a risk of further legislation,
regulation or taxation.
Any additional legislation, regulation
or taxation in relation to sustainability
and climate change could increase
compliance costs for the Group.
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. If we
do not fulfil our responsibilities in
this area, it could result in significant
reputational damage and subsequent
impact on future trade.
If we do not deliver against our
climate targets, investors may choose
to reallocate capital away from the
Group, towards assets with lower
impact on the environment.
The Group continues to focus on our
“Environment Leadership” strategy with a goal
of being carbon balanced by 2030. We
are driving product innovation to increase the
amount of recycled content in tiles and related
products and we continue to assess new
ways of reducing greenhouse gas emissions,
minimising waste and increasing recycling.
Our CEO, Rob Parker, takes responsibility for
this element of the strategy with the support of
our partners, the World Land Trust. We believe
we are well placed to lead the thinking in this
area across our industry. Stores are assessed
for environmental risks, such as floods, and
upgrades are assessed as required.
Please see the Environmental Leadership section
of the Strategic Report and our TCFD disclosure
for more information on this subject.
STATUS
The overall level of risk has stayed flat with good progress being made by the Group in progressing plans to reduce and mitigate
our environmental impact, however the Group recognises the increasing desire for companies to do more to reduce their impact
on the environment.
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 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.
STATUS
The labour market has continued to tighten throughout 2022 and the challenges facing the Group in 2023 could make the loss of
any key personnel more acute.
KEY:
Risk has increased Risk has decreased No change N New risk
STRATEGIC REPORT 44
RISKS AND UNCERTAINTIES
Risks
CYBER SECURITY
Impact
Mitigation
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.
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 cyber security partners are in place and
additional active monitoring of security threats
is being implemented. Virus outbreak response
plans are in place.
STATUS
Cyber security continues to represent a significant risk for the Group. The underlying environment evolves at a significant pace
which must be matched by continual improvements in our mitigation approach.
WAREHOUSE CAPACITY
The current warehouse capacity
of the business may be unable to
adequately accommodate the range
and depth of stock required to
support sales of the wider Group.
A failure to adequately invest in
warehouse capacity could result in
sales being lost or unfulfilled within
promised timeframes.
Supply chain excellence projects have been
defined and planned, covering improved
utilisation of the current warehouse space,
forecasting and management of product stock
requirements and flexible options to increase
warehouse capacity. In the short term, third-party
storage may also be used.
STATUS N
The Group has diversified its businesses and product offerings in 2022, which, combined with higher stock holdings to support
higher levels of revenue and mitigate supply chain risks, has placed additional pressure on warehouse capacity.
GROWTH STRATEGY THROUGH DIVERSIFICATION
The Group has sought to grow by
diversifying offerings through organic
initiatives and acquisitions. This
requires investment of both capital
and management time.
If targeted growth is not delivered by
the diversification strategy, adequate
Shareholder value may not be
created by investments and the core
business may suffer from a lack of
management focus.
Management review the strategy in detail and
consult external experts as appropriate. Any
significant M&A activity is supported by third-
party experts in due diligence. The strategy is
refreshed and approved by the Board annually.
Progress against strategic objectives is reviewed
by the Board on a regular basis.
STATUS
The 2021 risk covering the successful delivery of the Commercial business strategy has been expanded to include the new
businesses acquired and launched in 2022. The overall risk level has been maintained, with an increase in diversification being
offset by the development of an appropriate management structure.
KEY:
Risk has increased Risk has decreased No change N New risk
TOPPS TILES PLC ANNUAL REPORT AND ACCOUNTS FOR THE 52-WEEK PERIOD ENDED 1 OCTOBER 2022 45
Risks
Impact
Mitigation
GLOBAL PANDEMIC – INCLUDING COVID-19
Another global pandemic, including
new strains of Covid-19, may result in
trading restrictions being applied.
National lockdowns for Covid-19
included the closure of tile showrooms
which had a material disruption to
trading. A further risk would be a
closure of our central warehouse
facilities, and in particular, if store
operations were restricted.
We remained agile throughout our supply
chain during Covid-19 and traded reasonably
successfully through the various lockdowns.
We have well established pandemic protocols
developed for Covid-19 which could be
activated if needed.
In the event of a loss of the warehouse due
to a new pandemic, 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.
STATUS
The separate 2021 risks covering Covid-19 and another global pandemic have been combined in 2022 into this risk. The overall
rating has decreased given the lower likelihood of further lockdowns being imposed to manage another Covid-19 outbreak.
GLOBAL SUPPLY CHAIN
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 stock or capacity on ships
and transport networks. Where
resources can be secured, we may
see material increases in supply chain
costs, decreasing our profit margins.
Our buying scale helps ensure we secure
factory capacity and appropriate supply chain
resources. Our internal and partner logistics
operations have proved sufficiently agile to deal
with supply chain challenges. We will review
the appropriateness of passing on additional
cost pressures to consumers.
STATUS
The overall level of this risk has reduced in 2022 following the successful implementation of the Group’s sourcing strategy to secure
supply and easing of logistical pressures, however, this remains a key area of focus for management.
The following items were included within the significant risks reported for 2021, but have now been removed
for the reasons provided:
Supply Chain: This risk has been split in 2022 between
the Warehouse Capacity and Global Supply Chain risks
so that these key items can be assessed more effectively
individually.
Major Reputational Damage: The relative level of
this risk has reduced in comparison to the other Group risks
in 2022, so it has dropped outside of the top strategic risks
included in the Annual Report.
Delivery Optimisation: The overall level of this risk
has reduced in 2022, given the continued resilience of the
Group’s product and service offerings following Covid-19.
Appropriate Customer Offer: The relative level of this
risk has reduced in comparison to the other Group risks in
2022, so it has dropped outside of the top strategic risks
included in the Annual Report.
Value erosion through M&A: This risk has been
merged into the new Group Diversification risk above.
Store Portfolio: The level of risk has declined as we have
added two Online Pure Play businesses in 2022 and also
completed our store closure programme. Given these changes
the relative level of this risk has reduced in comparison to the
other Group risks in 2022 so it has dropped outside of the
top strategic risks included in the Annual Report.
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.
STRATEGIC REPORT 46
SECTION 172 STATEMENT
SECTION 172 COMPANIES ACT 2006
The purpose of the Strategic Report is to inform members of
the Company and help them assess how the Directors have
performed their duty under section 172 of the Companies Act
2006 (“s.172”) which requires each Director to act in the
way they consider, in good faith, would most likely promote
the success of the Company for the benefit of its members as a
whole. In doing this, the Director must have regard, amongst
other matters, to:
• The likely consequences of any decision in the long term;
• The interests of the Company’s employees;
• The need to foster the Company’s business relationships
with suppliers, customers and others;
• The impact of the Company’s operations on the community
and the environment;
• The desirability of the Company maintaining a reputation
for high standards of business conduct; and
• The need to act fairly as between members of the Company.
The Board of Directors confirms that during the year under review
it has acted in good faith to promote the long-term success of the
Company for the benefit of its members as a whole, while having
due regard to the matters set out in section 172(1)(a) to (f) of the
Companies Act 2006. We define principal decisions as both
those that are material to the Group, and that are significant to
any of our key stakeholder groups, including our customers and
suppliers, our people, Shareholders and our local communities
and society in general. Details of significant decisions made
during the year together with examples of matters discussed in the
year by the Board, their impact on key stakeholders and how we
have engaged with our stakeholders are included in the tables
below and discussed throughout the Strategic Report.
Stakeholder
OUR CUSTOMERS
Why it is important to engage
with this stakeholder group
In a competitive environment, our
ongoing success depends on meeting
customer needs and requirements
more effectively than our competitors.
We therefore recognise the benefits of
consistent and continuous engagement
with our customers to ensure that both
our current products and those in
development are suitable for their needs.
Customer service is a key competitive
advantage for the Group. Only by
engaging with, and understanding our
customers, can we continue to meet
their needs. We use this feedback to
continuously improve our service offering.
OUR PEOPLE
Why it is important to engage
with this stakeholder group
All strategic initiatives are delivered
through our colleagues, they are
fundamental to the successful delivery
of our strategy, as we continue to work
to enhance our reputation for providing
excellent customer service.
How we engaged
How we responded
We receive c.25,000 customer survey
responses every year, we also receive
c.50,000 calls, live chats and emails
into our customer services centre.
Customer satisfaction scores are a key
metric for the business and are reported
as a business KPI in this Annual Report.
To gain additional insight from our trade
customers, we send out a trade survey
every quarter and get around 1,200
responses on various subjects. We also
have a closed Facebook group of around
1,000 traders which provides continuous
direct feedback.
We have a culture of seeking to
celebrate success and will share
positive customer feedback with specific
colleagues where possible. We operate
a Topps Tiles’ superstar award scheme
to reward colleagues with very strong
customer feedback. We take negative
customer experiences very seriously and
operate a close the loop process for any
negative review, where we will contact
the customer and attempt to put matters
right where we can. Customer-based
feedback is an essential part of key
decisions around range, price, channel
to market and key investments.
Monthly Board reports cover customer
service-based metrics, along with
developments for product and customer
service initiatives.
How we engaged
How we responded
We perform an annual Company-wide
engagement survey (MyVoice) with 79%
completion rate in the winter 2021 survey.
We have a structure of routine team
feedback via a forum called Team Talk.
We track colleague turnover closely
and perform exit interviews to ensure
we understand why colleagues choose
to leave and have a whistleblowing
procedure where colleagues can
anonymously raise any concerns.
A member of the Board, Kari Daniels,
is a 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 feedback from our (MyVoice)
colleague engagement programme.
In addition, the Board and management
have direct contact with colleagues
through frequent visits to stores.
TOPPS TILES PLC ANNUAL REPORT AND ACCOUNTS FOR THE 52-WEEK PERIOD ENDED 1 OCTOBER 2022 47
Stakeholder
OUR SHAREHOLDERS
Why it is important to engage
with this stakeholder group
We rely on our Shareholders as providers
of capital funding to support our strategic
objectives.
Investors need us to protect and manage
their investments in a responsible and
sustainable way that generates value
for them.
OUR SUPPLIERS
Why it is important to engage
with this stakeholder group
Our expertise in the ranging, sourcing
and procurement of tiles on a global
basis is a core part of our competitive
advantage. We work directly with
carefully selected manufacturing partners
to develop and produce differentiated,
innovative, quality products that are
often exclusive to the Group and
therefore maintaining and enhancing our
relationships with those suppliers is key
to our success.
High standards of business conduct
working with our suppliers are
fundamental to the delivery of this
strategy.
How we engaged
How we responded
The Executive Directors regularly engage
with larger and institutional Shareholders
through a combination of personal
contact and formal presentations
and roadshows including six investor
performance updates per year. The
Chairman interacts with holders through a
regular annual engagement programme.
Our Annual General Meeting provides
an important opportunity for Shareholders
to interact with all of our Directors, raise
matters and vote on resolutions.
We work with the sell-side analysts
connected to our industry to provide the
wider market with information about the
Company’s performance, position and
strategy.
Shareholder feedback along with details
of movements in our Shareholder base is
regularly reported to and discussed by
the Board, to ensure that decisions are
made with an understanding of the views
of our Shareholders.
This year we have engaged with
Shareholders concerning our updated
capital allocation policy (see below) and
our revised remuneration policy which
will be proposed for approval at the
2023 AGM.
How we engaged
How we responded
The past year has been one of significant
turbulence for suppliers, with challenges
around sourcing raw materials, significant
input cost inflation including energy,
movements in exchange rates, and
production challenges. During this
period, we have worked closely with
our suppliers to overcome challenges
in the supply chain and maintain stock
availability for our customers.
The Board receives regular product and
supplier-based updates, including cost
inflation updates and how these are
managed in terms of consumer pricing.
The business has undertaken a number of
supplier transitions to build the strongest
supplier base to support the longer-term
aims of the expanding Group, while
continuing to work collaboratively with
our core group of “Tier 1” suppliers.
STRATEGIC REPORT 48
SECTION 172 STATEMENT
Stakeholder
SOCIETY
Why it is important to engage
with this stakeholder group
Being a responsible member of our
community and minimising our impact
on the environment is increasingly valued
by our customers and society at large.
We believe that a positive response to
these challenges can be a source of
competitive advantage while also being
the right thing to do.
Colleagues and customers have always
been generous supporters of our chosen
charity and we continue to value the
impact we can have in the communities
in which we operate.
How we engaged
How we responded
We have a range of initiatives focused
on the environment and the Board
receives regular updates and is regularly
consulted, see pages 50 to 53 of the
Strategic Report.
We have a rotation policy for charity
support partners and have completed
our seven years’ support period for
Macmillan, our new charity partner
Alzheimer’s Society was chosen by a
vote from colleagues with nearly 1,000
colleagues registering their vote.
In 2021 the Board placed Environmental
Leadership at the centre of our future
strategy, we also announced our goal of
becoming carbon balanced by 2030
as a Group. This year, our Commercial
business became carbon balanced,
the first part of the Group to do so. See
pages 24 to 25 of the Strategic Report
and our TCFD statement for further
information on this.
The Board is regularly consulted on
our social agenda.
The Company’s social and charity agenda
is discussed on pages 54 to 57 of the
Strategic Report.
While it is acknowledged that it is not possible for all the Board’s decisions to result in a positive outcome for every stakeholder group,
when making decisions the Board considers the Company’s purpose, vision and values together with its strategic priorities and takes
account of its role as a responsible business. By doing this, we aim to make more robust and sustainable decisions which will add
value for all stakeholders over the longer term.
PRINCIPAL DECISIONS DURING 2022
Areas of Board activity and the issues and matters that it has considered can be found throughout the Strategic Report. Detailed below
are three case studies of decisions taken by the Board in the year, which required the Board to carefully consider different stakeholder
groups and how they impacted the success of the Group, and their long-term (financial and non-financial) impact while having due
regard to the matters set out in s172(1)(a) to (f) of the Companies Act 2006.
Case Study Topic – Matter Discussed
Development of Online Pure Play – acquisition of Pro Tiler and internal development of Tile Warehouse
Stakeholders
considered
CUSTOMERS
SHAREHOLDERS
SUPPLIERS
COLLEAGUES
How we engaged and what we did
to consider stakeholders
Decision
The Board decided to approve the acquisition
of Pro Tiler Limited, and also to finance the
internal development of the Tile Warehouse
business.
Taken together, these decisions represent a
meaningful step into the Online Pure Play
market, a major strategic move for the Group.
Customer analysis identified specific customer
groups that were less well served by the
Group’s core omni-channel retail business
(Topps Tiles). We researched customer trends
with a view to developing a new offer to reach
customers that we do not currently serve.
We carefully considered if and how the
investment/development would generate value
and the risks of it destroying value through
sensitivity analysis and a general consideration
of the Group’s risk appetite.
We considered whether we could either work
with existing suppliers to the Group and add
additional volume, or provide opportunities
for new suppliers.
The Board considered whether the investment
would increase employment opportunities for
existing or new colleagues, or increase job
security across the Group.
TOPPS TILES PLC ANNUAL REPORT AND ACCOUNTS FOR THE 52-WEEK PERIOD ENDED 1 OCTOBER 2022 49
Case Study Topic – Matter Discussed
Capital allocation policy and revised dividend policy
Stakeholders
considered
SHAREHOLDERS
BANKING PARTNERS
How we engaged and what we did
to consider stakeholders
Decision
We engaged with key Shareholders in the early
stages of defining our new capital allocation
policy. Their perspectives were therefore taken
into account in our decision-making process.
We considered our partner banks’ current
attitude to our financial strength and stability,
and the likely impact on their appetite to support
us moving forward as a result of any change in
our policy.
The Board approved plans to increase
dividend payments to a moderate degree and
reduce dividend cover from 25 adjusted EPS
to 1.55 adjusted EPS over a two-year period,
as announced in the Interim Results
announcement.
Case Study Topic – Matter Discussed
Change of Charity Partner
Stakeholders
considered
SOCIETY/CHARITY
GROUPS
COLLEAGUES
How we engaged and what we did
to consider stakeholders
Decision
The management team approved the move to
our new charity partner, Alzheimer’s Society,
as voted for by our colleagues.
We have a rotation policy for charity support
partners and completed our seven-year support
period for Macmillan during 2022. We
therefore reviewed potential charity partners
in the year, and developed a shortlist of four
potential partners.
We conducted a colleague vote to determine
our new partner from the shortlist – the vote
was won by Alzheimer’s Society. Colleagues
are encouraged to support the Society through
getting involved, including through volunteering
and direct fundraising.
STRATEGIC REPORT 50
SUSTAINABILITY
ENVIRONMENT
In 2021, Topps Group incorporated Environmental Leadership into our overall strategy, setting a core target of net zero carbon
emissions by 2030. In 2022, we have defined a second core pillar, to support the development of a circular economy through
recycling, reuse, and innovation.
Core target
What
Link to SDGs
1. CARBON NEUTRAL BY 2030
• Partnership with World Land Trust to measure, reduce
and offset
• Renewable electricity
• Phased replacement of ICE vehicles with HEVs and EVs;
introduction of EV charging points at Head Office
• Rolling LED lighting upgrades throughout stores network
• Utilising strong supplier relationships to influence
Scope 3 reductions
2. SUPPORTING A CIRCULAR
• Responsible waste management to facilitate reuse
ECONOMY
and recycling
• Membership of the Plastic Pact UK to eliminate
unnecessary single-use plastics and improve packaging
recyclability
• Promoting recycled content use and signposting this
at the point of sale to support customer environmental
considerations
1. CARBON BALANCED BY 2030 (SCOPES 1 AND 2)
CALCULATING OUR CARBON EMISSIONS
Thanks to ongoing collaborations with the World Land Trust, we are
improving understanding of our carbon emissions across Scopes
1 and 2 and where these can be reduced. This will help us better
prioritise and plan our carbon reduction and offsetting journey.
Over the coming year, a roadmap of specific reduction and
offsetting targets to guide the Group towards achieving its 2030
net balanced goal will be published. In the meantime, initiatives
across property, transport, and finance will continue our push
towards reducing Scopes 1 and 2 emissions.
SCOPES 1 AND 2 EMISSIONS
TOTAL EMISSIONS1
2022
2021
CO2
(Tonnes)
CO2
(Tonnes)/
Store
Electricity
Gas and oil
Commercial fleet
Company cars
Total
4
2,555
2,079
162
4,800
0.0
8.3
6.7
0.5
15.5
CO2
(Tonnes)
2,669
2,928
2,210
133
7,940
CO2
(Tonnes)/
Store
8.1
8.8
6.7
0.4
24.0
1 Data provided by our energy suppliers (based on consumption multiplied by
Environmental Agency approved emissions factors) and for vehicle emissions,
from our inhouse transport team (based on mileage multiplied by manufacturer
published emissions data). 2021 figures for Commercial Fleet have been
amended to exclude Scope 3 (Commercial vehicles previously stated as 3,282
tonnes for 2021).
Scopes 1 and 2 carbon emissions have decreased by 3,100
tonnes for 2022 to just 4,800 tonnes. This is comparative to the
2021 total of 7,940 tonnes.
Our primary energy consumption is electricity and gas used
across our store estate. Electricity is primarily required for in-
store lighting and the significant reduction on 2021 reflects our
switch to 100% renewable electricity, as well as the impact
of our ongoing LED lighting upgrades. Gas is primarily used
for heating across our store estate and the decrease on 2021
relates to the reduction of the store chain over this period. Details
of Commercial Fleet and Company cars emissions data are
included on the Transport and Company Vehicles section below.
PROPERTY
We are continuously reviewing new ways to reduce the carbon
footprint of our property estate, by focusing on energy efficiency
and targeted reuse of display fixturing.
We completed the installation of LED lighting in all stores in
2022 (excluding strategic stores) and are continuing to explore
further lighting options to reduce overall consumption.
Most of our store estate have automatic smart energy meters
installed which allows us to closely monitor and analyse gas
and electricity use and we are now planning data driven
initiatives to support stores with reducing energy through
smarter operation of systems.
In supporting the Group’s commitment to a greener vehicle fleet,
we have installed “super-fast electric vehicle chargers” at our
Grove Park site.
TOPPS TILES PLC ANNUAL REPORT AND ACCOUNTS FOR THE 52-WEEK PERIOD ENDED 1 OCTOBER 2022
51
The new financial year will see our first solar powered store
open in Guildford and we have also committed to installing
solar power systems on both warehouses at our Distribution
Site at Grove Park which is estimated to generate a combined
340,000 kWh of electricity per annum, reducing our reliance
on grid-supplied electricity.
Any fixtures and fittings from recent store closures have been
reused in existing store display projects and this now forms
part of all new store projects at planning stage.
TRANSPORT AND COMPANY VEHICLES
During 2022, our transport fleet (including the use of sub-
contractors) has covered a total of 3.80 million kilometres using
1.17 million litres of fuel, corresponding to a distance travelled
increase of 22.8% with a fuel consumption decrease of 6.4%.
This can be attributed to new, more fuel-efficient vehicles
introduced halfway through the year, driver training, and the
implementation of modern route planning systems at the end of
2021. Most of our vehicle fleet have the latest Euro 6 engines
which are returning excellent fuel economy statistics and
reducing the amount of fuel required for our fleet.
We have also introduced a liquified natural gas (LNG) vehicle
to our fleet this year which will also contribute to a reduction
in emissions. Around half of our Drivers have been recruited in
the past 12 months – each Driver enjoying a comprehensive
induction period which includes lots of driving time with our
Driver Trainer. This means they are in the best place to drive our
vehicles in the most efficient manner by the time they start driving
on their own.
Our plans for the coming year include extending the skills of our
Driver Trainer to our existing Drivers – using our telematics to
identify areas where Drivers require additional training. Our new
route planning system has enabled us to reduce the distance
travelled through the optimisation of routes resulting in reduced
fuel usage.
We recognise that the potential for reducing emissions is, in
some areas, limited by the pace of technological progress. For
example, there remains uncertainty regarding a viable fossil fuel
alternative for heavy goods vehicles, at present. Our long-term
strategy in such cases is to continue investing in the newest
technology, and to look at auditable offsetting where reduction
is not possible.
As part of our supply chain strategy, we are looking to trial
a delivery hub, which will reduce final mile distance and open
up the opportunity to explore alternative fuels such as electric.
Also contributing to our Scope 1 emissions are company cars
leased across the organisation for sales and support staff. Of
these, 10% are hybrid electric vehicles (HEVs), with an additional
5% being electric vehicles (EVs). We are encouraging the gradual
replacement of remaining internal combustion engine vehicles with
EVs via the introduction of a new fleet operator with a greater
specialism in and selection of EVs, as well as by installing EV
charging points at our Leicester Head Office. This, coupled with
continued fuel efficiency improvements, will serve to reduce Scope
1 emissions over the coming years. We are pleased to report that,
at the time of writing, an additional 5% of our Company vehicles
that are on order are to be replaced with EVs.
SCOPE 3 EMISSIONS
Although Scope 3 emissions lie outside the Group’s direct
remit, we can support supply chain emissions reductions
using our buying scale, supplier relationships, and consumer
market share. Our buying teams understand the importance of
supporting sustainable innovation, utilising their wide network
of suppliers to ensure we can offer customers a greater choice
of environmentally conscious products. This will help incentivise
additional industry investment into such products.
2. SUPPORTING CIRCULARITY
OUR VISION
The aim of our second Environmental Leadership core pillar,
supporting circularity, is to minimise depletion of natural
resources while, hand in hand, diverting waste streams away
from environmentally high-risk end points such as landfill. This
can be achieved by working towards closed loop circularity –
repurposing waste from the tile industry into new materials for
use in the industry. Where this is not possible, we can support
open loop circularity – repurposing waste from other industries
into tile products and vice versa.
RECYCLED
CONTENT
IN OTHER
INDUSTRIES
TILES WITH
RECYCLED
CONTENT
TILES
WASTE
MATERIAL
WASTE FROM
OTHER
INDUSTRIES
Envisioned closed loop (turquoise arrows) and open loop (navy arrows) circularity
within tile manufacturing.
RESPONSIBLE WASTE MANAGEMENT
To drive our vision of circularity, we are taking steps to reduce
waste and ensure that waste which cannot be reduced is reused
or recycled.
REDUCING WASTE
As part of our partnership with Commercial, we have launched
a new range of cleaning products into our Retail stores in August
2022. This includes five refillable bottles (glass, bathroom,
kitchen cleaners etc), which can be refilled using dissolvable
sachets. This change will mean that our store teams no longer
order replacement bottles, but will instead order sachets only,
saving a total of 3600 plastic bottles (0.5 tonnes of plastic),
across our store estate.
STRATEGIC REPORT irrespective of its original vendor or purchase date, to any store
when purchasing a new one. These electrical products are then
collated at our distribution centre and sent for recycling.
CIRCULAR PACKAGING
For materials to be recycled, they must first be recyclable.
As such, to achieve our core target of supporting circularity,
an important step is to ensure the total recyclability of our
packaging.
THE PLASTIC PACT UK (WRAP)
We are collaborating with climate non-governmental
organisation WRAP as a member of their Plastic Pact UK. The
Plastic Pact, initiated in 2018, aims to “tackle the scourge of
plastic waste” by implementing the following targets by 2025:
1. Eliminate problematic or unnecessary single use packaging;
2. 100% of plastic packaging to be reusable, recyclable or
compostable;
3. 70% of plastic packaging to effectively be recycled or
composted; and
4. 30% average recycled content across plastic packaging.
C
C
A
A
S
S
E
E
S
S
T
T
U
U
D
D
Y
Y
52
SUSTAINABILITY
RECYCLING
We are collaborating with Acorn Recyclers to manage recycling
of our packaging waste. Packaging waste is collected from the
store network by our own transport fleet and centrally sorted at
our Leicester warehouse. We are then able to pass this onto
Acorn, based within 25 miles of our warehouse, for reprocessing
with minimal associated transport emissions. Across 2022 to
date, we have recycled 40 tonnes of cardboard, 36 tonnes
of polythene, and, in a recently started initiative, 5 tonnes of
plastic pallets. Once with Acorn, this material is sorted by hand
to remove any contaminates, washed, dried, and then palletised
(or baled) for use within both open and closed loop examples of
circularity, being reprocessed into end products such as refuse
sacks and paper board.
We also centrally collate tile, adhesive and grout waste from
our stores to be sent for specialised end-of-life reprocessing.
We work in partnership with Green4Life to recycle damaged
tiles into aggregate for use in the construction industry. We
are proud to have recycled 97% of this waste stream during
2022, corresponding to a more-than threefold increase on the
preceding year.
THE UK WASTE ELECTRICAL AND ELECTRONIC
EQUIPMENT (WEEE) REGULATIONS
The 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,
LAMPAS
Topps Group continues to invest in working
with manufacturing partners to bring more
recycled content onto the UK marketplace.
An example of this is our Lampas range of
gloss tiles – aesthetically stunning, durable,
and containing 60% recycled content. With
strong sales, such products embrace circularity without
any compromise on quality or customer satisfaction
and drive further demand for recycled content.
Pictured: Lampas Peacock Tile,
with 60% recycled content
TOPPS TILES PLC ANNUAL REPORT AND ACCOUNTS FOR THE 52-WEEK PERIOD ENDED 1 OCTOBER 2022
In 2022, we became the first company in the tiling industry
to sign the Plastic Pact UK, demonstrating our commitment to
environmental leadership. Each July, we now report our annual
packaging tonnage, by material type, to WRAP, who measure
our performance against the recyclability targets and advise on
how we can make further progress towards them.
THE ON-PACK RECYCLING LABEL (OPRL) SCHEME
Topps Tiles is a proud member of the On-Pack Recycling Label
(OPRL) Scheme. With over 750 members, this scheme aims to
deliver a simple and consistent on-packaging recycling message
to help consumers correctly recycle waste. This is an important
step in closing the circularity loop in packaging, as material
recovery is considerably detrimented by the contamination
which results from incorrect recycling. All Topps Tiles branded
packaging displays the appropriate OPRL labelling in
accordance with the guidelines of the scheme.
CHAMPIONING RECYCLED CONTENT
Beyond improving recyclability, we also understand the
importance of incorporating recycled content into our products;
namely – increased investment in techniques which enable
greater proportions of recycled content, increased demand for
recycled materials, and decreased demand for natural resources.
Indeed, actually utilising recycled content is vital for supporting
the development of a circular economy.
Currently, more than 50% of our tile products contain recycled
content. This information is, for the first time, displayed at the
point of sale in stores and online, improving transparency
and helping sustainability-conscious customers make informed
decisions with respect to the environmental impact of their
purchase.
53
SUPPLY CHAIN AND PRODUCT SOURCING
At Topps Tiles, 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 180 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, can 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 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.
We are working closely with Intertek, the leading Quality
Assurance Experts who have carried out independent third-party
auditing on production facilities where there is any product or
geographical risks. These Workplace Conditions Assessment
audits demonstrate compliance in relation to health and safety,
labour, wages and hours and environmental standards. Some
31 facilities have now been audited in geographical risk
areas and we are working closely with suppliers to ensure that
all non-compliances are being addressed within the agreed
timescales. Our fundamental aim is to work with our suppliers on
any issues using a continuous improvement model and we will
not work with suppliers that fail to engage with us in this process.
Intertek are providing additional compliance training to suppliers
where it has been identified that more support is required. This
partnership with Intertek is imperative as we look to operate
in different countries across the world due to the current price
pressures on shipping.
In 2015, the Modern Slavery Act came into 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 Slavery Statement can
be found on our website at www.toppstilesplc.com under Corporate Responsibility.
STRATEGIC REPORT 54
SUSTAINABILITY
SOCIAL
Core target
What
Link to SDGs
COLLEAGUE
EXPERIENCE
• MyVoice – annual engagement survey
• Diversity and Inclusion – increased focus on data collection
and action; International Women’s Day initiative
• Recognition – Topps Superstars, Store of the Year, Outstanding
Contribution Awards
• TeamTALK – colleague and manager forum at regional and
national levels
• Communications platform – new interactive two-way intranet
in social media style
COLLEAGUE
CAPABILITY
• Thrive LXP – new learning management platform with video
content covers training, well-being and communications
COLLEAGUE
WELL-BEING
• Leadership development – coaching in the workplace, high
potential performance development
• Career pathways – formal development plans for service
specialists in retail
• Apprenticeships – formal qualifications available to all colleagues
provided by our dedicated partners via the Apprenticeship Levy.
• Improve inductions – online and in-person training modules
designed for better new starter experiences and improved retention
• Well-being wheel – ongoing rotational plan considering physical,
mental, financial, social and career well-being
• BUPA – launch of employee assistance programme via leading
provider, includes assistance for immediate family for advice lines
• Mental Health First Aiders – Group-wide groups of colleagues
to provide mental health support signposting
• Event days – information provided with signposting for World
Mental Health Day, Mental Health Awareness Week, Dementia Action
Week, World Menopause Day
• Benefits – relaunch of Hapi Benefits providing everyday discounts,
offers and rewards to aid with financial well-being
This year work has focused on specific areas of development in our Leading People strategy under the pillars of Colleague
Experience, Colleague Capability and Colleague Well-being.
We recognise that the best colleagues, our “leading people” are those who are highly engaged, highly skilled, and have
a strong sense of the well-being of themselves and those around them, which in turn creates a sense of belonging with the
Group and focus on delivering results.
TOPPS TILES PLC ANNUAL REPORT AND ACCOUNTS FOR THE 52-WEEK PERIOD ENDED 1 OCTOBER 2022
55
COLLEAGUE EXPERIENCE
We monitor our colleagues’ views and feelings about the Group,
their managers, teams and work-life balance via our annual
engagement survey. Our winter 2021 survey enjoyed continued
high levels of participation at 80%, as well as an increase in
participation from 20% to 55% for our logistics team.
Overall engagement remained high at nearly 80% (2019 pre-
pandemic 75%), with 88% of all colleagues saying they were
committed to the success of the business. One area highlighted
by the survey was the need for additional training resources,
which has been provided by our new LX platform Thrive (see
below on Colleague Capability).
Another area highlighted by the 2021 survey was a requirement
for additional recognition, which has now increased to include
monthly Topps Superstars awards, announced by the Chief
Executive Rob Parker in his video Huddles (15 awards in
FY2021), as well as a Store of the Year Award, and awards
for Outstanding Contribution throughout the year, presented to
individuals at our annual conferences.
In addition, we consult with colleagues via our TeamTALK forums,
which have regional, departmental and national groups, comprising
elected colleagues who meet regularly to raise items of concern or
interest with Executive team leaders as well as undergo consultation
on relevant business matters. During the year we also launched a
new interactive communications platform which has a social media
look and feel, and enables colleagues to comment or take part in
two-way conversation on content which interests them.
Our work on diversity and inclusion continues to develop with
gathering of demographic data and various initiatives to support
equality, and for the year, 37% of applications for roles came from
females. At the end of the year, we had 27.0% female colleagues
in the Group, and our median Gender Pay Gap at April 2021
was 2.7%, significantly lower than the UK average of 15.4%.
We also celebrated International Women’s Day for the second
consecutive year and its theme of Break The Bias. Our D&I work
continues with leadership awareness training on representation,
store training on bias in recruitment, and the introduction of
mandatory training for all colleagues on equality and inclusion,
called Working Well With Everyone.
COLLEAGUE CAPABILITY
A large part of this year’s focus on capability has been via the
Thrive learning and development (L&D) platform (referenced
above) to give colleagues a focus on continuous improvement
and potential for development.
The platform includes more than 1,800 pieces of learning
content, of which approximately two thirds are related to product
and process training. The remaining are related to personal
development and well-being. More than 73% of the content has
been developed in-house, specifically for colleagues.
1,837
249,500
Pieces of L&D content
Number of content views
By the end of the year, all Topps Tiles Retail and Commercial
colleagues had access to Thrive. It is planned that during Q2 of
the new financial year, all remaining Group colleauges will have
access.
Our focus on continuous improvement is realised in our career
development opportunities. By the end of the year, 40% of
store managers and 58% of deputy managers had stepped into
their role via internal promotions, and a new Career Pathways
framework was established to show Service Specialists how they
can progress their development.
APPRENTICESHIPS
We pay an Apprenticeship Levy and in the last financial year
have seen six colleagues in our Leicester support office complete
their qualification via this route.
This included payroll, project management and management
and leadership qualifications.
In the coming year we are working with our learning partners
including Kube, Babington and MBKB Limited to roll out the
apprenticeships scheme further across the Group, including a
Changing Lanes programme to assist warehouse colleagues to
attain an HGV driving licence.
COLLEAGUE WELL-BEING
The physical and mental health of our colleagues has long been
a priority for the Group and we have many initiatives in place
to assist those who request it.
In our 2021 colleague engagement survey, only 8% of colleagues
said they were not aware of mental health resources provided to
them by the Group, while 62% agreed the Company cared about
their well-being and 61% said they were comfortable talking about
their mental health.
This year we launched a new Employee Assistance Programme
with Bupa, which was accessed by 5.4% of colleagues from
June 21 to July 22, (national benchmark 6.3% annually), on
topics including mental well-being, legal and family issues.
We also have a cohort of mental health first-aiders across the
Group who have been trained in identifying mental health issues,
providing high-level support and signposting colleagues to
appropriate levels of help, should they require it.
In addition, we release information and advice, including
appropriate signposting pathways, for World Mental Health
Day, Mental Health Awareness Week, Dementia Action Week
(working with our charity partner Alzheimer’s Society) and World
Menopause Day.
Our Hapi benefits app was also relaunched during the year,
which features financial advice and everyday discounts on well-
known brands and stores. It was used more than 1,600 times in
the year, with a total saving of almost £10,000 on a total spend
of more than £161,000, with the average user saving at least
£20 on their purchases.
STRATEGIC REPORT 56
SUSTAINABILITY
SOCIAL
a new charity partner this year after raising more
than £1 million for Macmillan Cancer Support
across a seven-year association.
Topps Group was delighted to join forces with
Colleagues and customers have always been
generous supporters of our chosen charity, and in
January 2022, a colleague vote saw leading dementia charity
Alzheimer’s Society selected to be the Group’s new partner for a
five-year term.
Group colleagues quickly took the new charity to heart, taking
part in a series of fund-raising events as well as discovering more
about dementia as a condition and its impact on those who live
with it, and their families and carers.
The annual Tour de Topps cycle ride expanded to include
running and walking, and had its most successful year to date,
with 108 colleagues across the country raising more than
£10,000 in just two weeks.
Several smaller groups of colleagues pushed themselves to take
on intrepid challenges: a group from our buying, stock and
finance teams, based in our Leicester support office, undertook
a 26-mile trek in the Peak District in a day, raising more than
£6,000; a team from the northeast stores took to the air and
held a charity skydive, adding another £4,000 to the charity
funds; while five colleagues from the Greater London area took
on 4,413 feet of Ben Nevis and raised more than £1,300.
Smaller events including the raffle of a Leicester Tiger’s shirt
and a signed rugby ball, as well as a bake-off event, raised
hundreds more pounds.
Alzheimer’s Society also benefitted from the generosity of
customers who opted to donate their small change to charity by
rounding up their purchase to the nearest whole pound, via the
Pennies Digital Charity Box. This raised more than £60,000 by
the end of the year, bringing the total from mid-January to the
year end, to more than £90,000.
Outside of fundraising, colleagues took part in “lunch and learn”
sessions, signing up to become Dementia Friends and learn more
about the condition and ways they can help. We were also
delighted to welcome charity fundraisers, carers and people with
dementia into our hospitality box at Leicester Tigers.
LEICESTERSHIRE CARES
We are proud to continue our membership with Leicestershire
Cares, a charity which works with local businesses and
charitable groups to provide as much aid as possible.
Colleagues contribute time, money and items for activity
including toiletry collections for those affected by homelessness
and toy collections for children at a disadvantage at Christmas.
TOPPS TILES PLC ANNUAL REPORT AND ACCOUNTS FOR THE 52-WEEK PERIOD ENDED 1 OCTOBER 2022 57
ALZHEIMER’S SOCIETY
“We are delighted to have been chosen as Topps Tiles
charity partner and it has been fantastic to see their
amazing commitment to supporting our work. Already
colleagues and customers have raised over £60,000
through various activities including Tour de Topps, trekking
26 miles around the peak district during one of the
summer heat waves and taking on a skydive (rather them
than me!).
By 2025, one million people will be living with dementia
in the UK. With Topps Tiles support we can continue to
support people affected by dementia through some of
the hardest and most frightening times, to improve their
lives and help to avoid crisis. We are, and we empower
people affected by dementia to be, a leading force for
change – using cutting edge research and influencing to
push for breakthroughs that’ll change the lives of people
affected by dementia, now and in the future.
Facing dementia we are always better together.
On behalf of Alzheimer’s Society I would like to say a
huge thank you to Topps Tiles, it’s wonderful to be working
in partnership and we can’t wait to see what we achieve
over the coming years.”
Kate Lee, Alzheimer’s Society Chief Executive
WORDS FROM OUR PARTNERS
PENNIES:
“This year marks seven years of Pennies’ partnership
with Topps Tiles, and together we have hit some major
milestones.
At the end of 2021, after great dedication and diligence
from both teams, we rolled out Pennies micro-donations in
Topps Tiles e-commerce journey for the first time. This is in
addition to our original offering, which has seen customers
shopping in Topps stores given the option to round-up their
orders when paying by card since 2015.
We’ve been delighted to help Topps Tiles grow their
micro-donation offering, now providing customers with an
omni-channel donation experience whichever way they
shop, and critically boosting the potential funds raised for
charity too.
This has been an especially important development
in 2022 as Topps Tiles’ launched their new charity
partnership with Alzheimer’s Society. Since January,
customers have made more than 125,000 donations via
Pennies to support more people living with dementia.
Topps Tiles colleagues have remained a huge reason
for the continued success of this partnership, embracing
Pennies and engaging customers in conversations around
the impact of micro-donations – helping us edge ever
closer to the next major milestone.
We are proud of how our partnership continues to
grow, year after year, and we’re hugely grateful for
the continued support of Topps Tiles too – as a charity
ourselves, Pennies is able to thrive with the brilliant support
of partners like you.”
Alison Hutchinson CBE, CEO, Pennies
LEICESTERSHIRE CARES
“The past year has been very challenging for communities,
families, young people and businesses across our city and
county. We went in and out of lockdown, and saw prices
soar as the impact of the war in Ukraine hit energy prices.
So, it is very much to the credit of the staff from Topps Tiles
that they did not give up hope but continued to strive to
support our work with community groups and young people.
By donating treats and gifts for families on the breadline
or offering practical support to community projects through
team challenges, they helped to inspire people and replaced
despair with hope.
Time and time again, the staff of Topps Tiles step up
and show they really are committed to giving back to
the community and making a difference.
At a time when they have faced challenges with their own
operations it has been inspiring to see them, continuing to
give back and really putting effort into tackling poverty and
exclusion. A real shining example of a ‘Together We Can’
attitude.
We are looking forward to continuing our partnership
with Topps Tiles and are currently developing a range of
community challenges with them and partnering with them
again on our ‘Bags of Hope’ campaign, where their staff
will contribute essential items to families and young people in
danger of being left behind.”
Kieran Breen, Chief Executive Officer
STRATEGIC REPORT 58
TASK FORCE ON CLIMATE-RELATED
FINANCIAL DISCLOSURES
increasing our disclosure in this area moving forward,
where possible.
• Climate scenarios. We have not yet prepared climate
scenarios to examine the resilience of the organisation in
different climate outcomes. This is due to the complexity
of this task and availability of suitable analytical
capabilities within the organisation.
• Defining targets to be used to manage climate-related
risks. We have recently brought in additional resource in
this area and will define targets over the coming year, in
line with our strategy.
We report below for the first time against the 11 recommended
disclosures under four thematic pillars set out in the TCFD’s
recommendations: these being governance, strategy, risk
management, and metrics and targets.
This year is the first year that the Group has reported under
TCFD requirements. We are committed to implementing
the recommendations of the TCFD which aim to provide
investors and other stakeholders with useful information on
climate-related risks and opportunities that are relevant to
our business. We set out below more detail on how we are
seeking to align with these recommendations, recognising
that this will form an ongoing workstream as we further
develop our policies, processes, and disclosures over the
medium and long term.
In this context, we have considered our “comply or
explain” obligation under the Financial Conduct Authority’s
Listing Rule 9.8.6R (8) and confirm that we have made
disclosures consistent with the TCFD Recommendations
and Recommended Disclosures in this Annual Report and
Accounts, except in the following areas:
• Scope 3 emissions reporting. This is a complex area with
information not readily available. We will work towards
TCFD RECOMMENDATIONS
GOVERNANCE
DISCLOSE THE ORGANISATION’S GOVERNANCE AROUND CLIMATE-RELATED RISKS AND OPPORTUNITIES
Recommended disclosures
a. Describe the Board’s oversight of climate-related risks and opportunities
b. Describe Management’s role in assessing and managing climate-related risks and opportunities
The Chief Executive, Rob Parker, has executive responsibility
for climate-related risks and opportunities and is designated
as the Director responsible at a Board-level, chairing the
Executive Leadership steering group. He leads on the
Group’s Environmental Leadership strategy, sustainability, and
climate-related issues. As a standard agenda item, the Board
receives updates from Rob as part of his CEO report and it
has overall responsibility for oversight of climate-related risks
and opportunities. The Audit Committee reviews, in line with
the Group’s risk review framework, the Group’s key risks and
uncertainties which are set out on pages 42 to 45 and which
include the potential impact of and mitigation for climate-
related issues.
Cross-functional dialogue on climate-related risks and
opportunities is maintained through the Sustainability Council,
established in 2019, which meets every quarter. This is a
panel of representatives from across the business with a
considerable stake in climate-related issues. This includes
representatives responsible for property, transport, and waste
management. As such, the Council can identify specific risks
and opportunities and assign departmental responsibility
for resultant actions. The Council is chaired by Rob Parker,
providing a link between the Council’s agenda and the
Board-level strategy.
The newly formed Sustainability Team, led by Technical
and Sustainability Manager Kevin Bingham, coordinates
cross-functional engagement with climate-related risks and
opportunities. With technical expertise and environmental
compliance experience, this team will ensure strategy
implementation is synchronised throughout the business. This
includes managing relevant projects between departments,
between suppliers, and between external partners.
Additionally, sitting within the Buying team, the Sustainability
Team is ideally positioned to drive progress in Scope 3, an
area in which we have historically lacked resource.
TOPPS TILES PLC ANNUAL REPORT AND ACCOUNTS FOR THE 52-WEEK PERIOD ENDED 1 OCTOBER 2022 59
TCFD RECOMMENDATIONS
STRATEGY
DISCLOSE THE ACTUAL AND POTENTIAL IMPACTS OF CLIMATE-RELATED RISKS AND OPPORTUNITIES ON THE
ORGANISATION’S BUSINESSES, STRATEGY AND FINANCIAL PLANNING WHERE SUCH INFORMATION IS MATERIAL
Recommended disclosures
a. Describe the climate-related risks and opportunities the organisation has identified over the short, medium and long term
b. Describe the impact of climate-related risks and opportunities on the organisation’s businesses, strategy and financial planning
c. Describe the resilience of the organisation’s strategy, taking into consideration different climate-related scenarios, including
a 2°C or lower scenario
CLIMATE-RELATED OPPORTUNITIES:
Product opportunity – Tiles and associated products
can be manufactured with a variety of source materials.
We are selling an increasingly large amount of tiles with a
degree of recycled content, and utilising recycled content is
vital for supporting the development of a circular economy.
We now publish the percentage of recycled content on all
tiles in store and online. Other considerations are the amount
of energy used to make a tile, the amount of water used,
where it is sourced from, its life span as a building material
and its recyclability at end of life. Our ability to work with
innovative suppliers from around the world presents an
opportunity to offer customers unique products designed for
a circular, low carbon economy. Other products such as
adhesives can also be reformulated to use recycled content,
for example, our Regenr8 adhesive which contains up to
53% recycled materials (Ecosand), replacing the need for
natural extracted sand.
We believe our strategy is reasonably resilient but have
not yet considered different climate-related scenarios. We
recognise the importance of developing our assessment of
scenarios and are considering our approach to this.
CLIMATE-RELATED RISKS:
Transition risk – Governments may implement new taxes,
regulations or legislation which may be designed to penalise
companies which do not effectively minimise their impact on the
environment and communities. This may increase compliance
costs for the Group, which would need to be shouldered by the
Group or passed onto the customer. The former would lead to
reduced margin, while the latter would lead to reduced demand.
Response – Delivering our goal of being carbon balanced
by 2030 should minimise the extent to which the Group is
exposed to any such punitive taxes or legislation.
Transition risk – If customers do not feel as though
we are sufficiently focused on reducing our impact on
the environment, there is a risk they may choose to shop
elsewhere and possibly cause reputational damage to
the Group, especially if accompanied by social media
campaigns to boycott the Group.
Response – Our Group strategy includes the priority area
of Environmental Leadership, which requires us to clearly
demonstrate that our business is leading the sustainability
agenda within our sector. We are represented on industry
bodies attempting to drive best practice, and we have the
strategy and governance in place to ensure we deliver against
it. We plan to increase our customer facing communication
over time – for example, we now show the percentage of
recycled content in all of our tiles in store and online.
Physical risk – Climate change means increased
likelihood of extreme weather events such as flooding. Such
events could affect stores, causing temporary closures and
increased estate maintenance costs. These events could also
impact our supply chain; for example, a flooded factory
would temporarily reduce our supply of particular products.
Response – Very few of our stores are at substantial risk of
flooding. In the short term, we are regularly assessing them for
upgrades and, in the medium and long terms, we would be
able to relocate, if necessary, as they are leased. Our supplier
base is wide so, even if some suppliers became unable to
function in the medium term, our buying teams would be able
to source affected products from alternative suppliers.
STRATEGIC REPORT 60
TASK FORCE ON CLIMATE-RELATED
FINANCIAL DISCLOSURES
TCFD RECOMMENDATIONS
RISK MANAGEMENT
DISCLOSE HOW THE ORGANISATION IDENTIFIES, ASSESSES, AND MANAGES CLIMATE-RELATED RISKS
Recommended disclosures
a. Describe the organisation’s processes for identifying and assessing climate-related risk
b. Describe the organisation’s processes for managing climate-related risks
c. Describe how processes for identifying, assessing and managing climate-related risks are integrated into the organisation’s
overall risk management
We have established a “Three Lines of Defence” risk
management model to identify, monitor and manage all
risks, including those that are climate-related. The first line
of defence is our Executive management team who have
day-to-day responsibility for business operational supervision
and, hence, are required to consider current and developing
risks that could impact on the achievement of our strategic
objectives, including ESG and climate-related risks. Executive
management is ultimately responsible for the implementation
and maintenance of the agreed processes and controls to
mitigate the assessed risks.
Climate and ESG risks have been integrated into our strategic
risk process, including consideration of all key items, such as
regulatory, reputational and physical risks. The identification
and assessment of climate and ESG risks uses the same
likelihood and impact criteria as all Group risks on both an
inherent and residual basis. A detailed risk assessment is
conducted annually to identify emerging risks and to ensure
that the focus and management of all risks is appropriate.
This assessment includes input from the key internal and
external stakeholders. The Audit Committee reviews the results
of the annual strategic risk assessment and the Board reviews
Executive management updates to the risks and mitigations
on a quarterly basis.
The Environmental Leadership steering group serves as
another key part of the second line of defence and evaluates
material ESG risks and corresponding mitigation activities.
This also provides a forum to receive and consider new ideas
and feedback from colleagues representing all areas of the
business on environmental issues. This ground-up approach
helps to ensure that all levels of the business are engaged in
our Environmental Leadership strategy.
The third line of defence is our Internal Audit function,
which provides an independent and objective view on the
effectiveness of the internal control environment, which is
reported to the Audit Committee.
In addition to the above, our partnerships with the World
Land Trust and Wrap provide us with independent and
invaluable insight and advice.
TOPPS TILES PLC ANNUAL REPORT AND ACCOUNTS FOR THE 52-WEEK PERIOD ENDED 1 OCTOBER 2022 61
TCFD RECOMMENDATIONS
METRICS AND TARGETS
DISCLOSE THE METRICS AND TARGETS USED TO ASSESS AND MANAGE RELEVANT CLIMATE-RELATED
RISKS AND OPPORTUNITIES WHERE SUCH INFORMATION IS MATERIAL:
Recommended disclosures
a. Describe the metrics used by the organisation to assess climate-related risks and opportunities in line with its strategy and risk
management process
b. Disclose Scope 1, Scope 2 and, if appropriate, Scope 3 greenhouse gas (GHG) emissions and the related risks
c. Describe the targets used by the organisation to manage climate-related risks and opportunities and performance against
targets
METRICS
Herein, we disclose the metrics to be used to assess our climate-related risks and opportunities. These are split into direct and
indirect operations, the former comprising Scopes 1 & 2, and the latter Scope 3. In future years, we will disclose year-on-year
progress for each metric.
Metric
Scopes 1 & 2 carbon emissions
Scopes 1 & 2 carbon intensity (by revenue)
Scopes 1 & 2 carbon intensity (by floorspace)
Electricity consumption
Gas consumption
Proportion renewable electricity
Recycling rate
Scope 3 carbon emissions
Scope 3 carbon intensity (by Group revenue)
Proportion recyclable, reusable, or compostable own-
label plastic packaging
Reported
value 2022
4,800
19.41
25.02
11,262,360
14,025,914
99.8%
N.R.*
N.R.*
N.R.*
70%
Unit of measure
tCO2
tCO2/£1mil revenue
kgCO2/m2
kWh
kWh
%
%
tCO2
tCO2/£1mil revenue
%
Direct operations
Indirect operations
*N.R. – not reported at present
The Group has not yet attained operational capacity to report against all planned metrics. Reporting for these will commence
as detailed below.
Recycling rate
Scope 3 carbon emissions
Scope 3 carbon intensity (by Group revenue)
By end of 2024
By end of 2024
By end of 2024
TARGETS
Thus far, our Environmental Leadership strategy has committed us to the following targets:
• Carbon neutral (Scopes 1 & 2) by 2030
• 100% reusable, recyclable, or compostable plastic packaging on own-label and exclusive products by 2025 (a
commitment made as part of our membership of the Plastic Pact UK)
Over the year ahead, our Sustainability Team will work with Executive Leadership, the Sustainability Council, and other
key stakeholders to set additional targets to correspond to our reported metrics. These will be carefully considered in order
to minimise climate-related risk and maximise opportunity. These targets will be published in our report for the 2023/24
financial year.
STRATEGIC REPORT 62
GOING CONCERN AND
VIABILITY STATEMENT
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 more
pessimistic trading scenarios that are deemed severe but
plausible. The two downside scenarios modelled include a
moderate decline in sales and a more severe decline in sales,
which result in much lower sales and gross profit than the base
scenario, resulting in worse profit and cash outcomes. The more
severe downside scenario modelled this year was based on a
prolonged period of macroeconomic stress in the UK, lasting
for two years, with sales falling substantially in each year in our
main brand, Topps Tiles, as well as year-on-year declines in
gross margins.
The Group has already taken a number of actions to strengthen
its liquidity over the recent years, and the scenarios start from
a position of relative strength. 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 October 2022 and expires
at the earliest in October 2025. In all scenarios, the Board
has 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 continues to adopt the going concern
basis in preparing the financial statements.
LONG-TERM VIABILITY STATEMENT
In addition to the Going Concern statement the Directors have
also assessed the prospects of the Group over a longer period.
This assessment has been done over a period of three years for
the following reasons:
• Our Group 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”; 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 refinance of loan facilities concluded
in October 2022 and the principal 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 macro-
economic changes, global supply chain pressure, reduction in
consumer confidence and major reputational damage from cyber
security 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 three 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
three 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 three 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 14.
•
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 24 and pages 50 to 53;
− Colleagues on pages 22 and 54;
− Gender diversity on pages 87 and 88;
− Social matters on pages 56 and 57;
− Respect for human rights on page 87; and
− Anti-corruption and anti-bribery matters on page 76.
TOPPS TILES PLC ANNUAL REPORT AND ACCOUNTS FOR THE 52-WEEK PERIOD ENDED 1 OCTOBER 2022 63
• Where principal risks have been identified in relation to any
of the matters listed above, these can be found on pages 42
to 45, 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.
• All key performance indicators of the Group, including those
non-financial indicators, are on pages 34 and 35.
• The Financial Review section on pages 36 to 41 includes,
where appropriate, references to, and additional
explanations of, amounts included in the entity’s annual
accounts.
ANNUAL GENERAL MEETING
The Annual General Meeting for the period to 1 October 2022
will be held on 18 January 2023. Please see the Notice of
Annual General Meeting for more details. The Strategic Report
was approved by the Board of Directors and signed on its
behalf by:
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.
Rob Parker
Chief Executive
Stephen Hopson
Chief Financial Officer
30 November 2022
Pictured: Mora™ White Tile
WHAT OUR CUSTOMERS SAY:
GORGEOUS FLOORING
We were recommended this flooring by our tiler –
couldn’t decide on the white or oak, but decided to
go with white, and so glad we did. The kitchen looks
fantastic. Easily cleaned and really hardwearing with
the kids and dog.”
STRATEGIC REPORT 02 OUR
GOVERNANCE
CONTENTS
Board of Directors
Executive Committee
Corporate Governance Report
Directors’ Report
Directors’ Responsibilities Statement
Directors’ Remuneration Report
66
68
69
86
89
90
Pictured: Saplewood Grey
66
BOARD OF DIRECTORS
DARREN SHAPLAND
NON-EXECUTIVE CHAIRMAN
CHAIR OF THE
NOMINATION AND
GOVERNANCE COMMITTEE
COMMITTEE MEMBERSHIP
N
Darren joined the Board
in March 2015. He has
over 35 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
of Carpetright Plc for two
years to 2013.
ROB PARKER
CHIEF EXECUTIVE
STEPHEN HOPSON
CHIEF FINANCIAL OFFICER
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 DOWN
SENIOR INDEPENDENT
NON-EXECUTIVE DIRECTOR
AND CHAIR OF THE AUDIT
COMMITTEE
COMMITTEE MEMBERSHIP
A N R I
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 BREEZE
KARI DANIELS
HELEN EVANS
NON-EXECUTIVE DIRECTOR,
NON-EXECUTIVE DIRECTOR,
COMPANY SECRETARY
CHAIR OF THE
REMUNERATION
COMMITTEE
EMPLOYEE ENGAGEMENT
DIRECTOR
COMMITTEE MEMBERSHIP
COMMITTEE MEMBERSHIP
A N R
A N R
Diana joined the Board
in February 2021. An
experienced HR Director,
Kari joined the Board in
Helen was appointed
April 2021. An experienced
General Counsel and
retail and consumer sector
Company Secretary with
Diana has broad experience
Chief Executive, latterly
effect from November
across the retail and
consumer, logistics and
property sectors. Since
2019, Diana has been
Chief Executive Officer of
2022 having led the client
Tesco Ireland. Prior to Ireland
contracting function at
Kari held senior directorship
Clipper Logistics prior to
Group HR Director at Bunzl
Group in Europe and the
plc and has previously held
UK. Prior to Tesco she
positions across the Tesco
joining Topps Tiles. She
qualified as a solicitor in
2012 and has gained
senior management positions
was a senior executive at
extensive legal and
with Land Securities, J
Superdrug, Wella and S C
compliance expertise
Sainsbury and Accenture.
Johnson.
from both private practice
and in-house roles. Helen
holds an MBA from the
triple accredited Sheffield
University Management
School.
A Audit Committee
N Nomination and Governance Committee
R Remuneration Committee
Committee Chair
I
Senior Independent Director
TOPPS TILES PLC ANNUAL REPORT AND ACCOUNTS FOR THE 52-WEEK PERIOD ENDED 1 OCTOBER 2022 DARREN SHAPLAND
ROB PARKER
STEPHEN HOPSON
KEITH DOWN
NON-EXECUTIVE CHAIRMAN
CHIEF EXECUTIVE
CHIEF FINANCIAL OFFICER
SENIOR INDEPENDENT
CHAIR OF THE
NOMINATION AND
GOVERNANCE COMMITTEE
COMMITTEE MEMBERSHIP
N
NON-EXECUTIVE DIRECTOR
AND CHAIR OF THE AUDIT
COMMITTEE
COMMITTEE MEMBERSHIP
A N R I
Darren joined the Board
in March 2015. He has
Rob joined the Board in
2007, serving as Chief
Stephen joined the Board
in November 2020 from
over 35 years of retail and
Financial Officer until 2019
Molson Coors Beverage
Keith joined the Board in
February 2015. A chartered
accountant, Keith is currently
consumer experience, having
when he was appointed to
Company, where he was
the group finance director
held senior financial and
operational positions within
the Burton Group, Arcadia
and Kingfisher. Darren was
Chief Financial Officer at J
the role of Chief Executive.
Rob’s previous roles before
joining the Group included
Director of Central Finance
of Selfridges Group, having
for Western Europe. Before
held this post since July
senior finance roles with the
years at Travis Perkins Plc,
Boots Group and Savers
including three years as
this, Stephen spent five
2018. He was previously
the Chief Financial Officer
of Dunelm Group Plc, Go-
Sainsbury Plc between 2005
Health & Beauty Ltd. Rob
Finance Director for BSS, and
Ahead Group Plc and JD
and 2010. He was also
is accountable for Group
has also held senior finance
Wetherspoons Plc.
Non-Executive Chairman of
Strategy, leadership of the
roles at Mitchells & Butlers Plc
Sainsbury’s Bank from 2006
Executive team, and Chairs
where he was responsible
to 2013 and Chief Executive
the Group Health and
of Carpetright Plc for two
Safety and Environmental
years to 2013.
Committees.
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.
DIANA BREEZE
NON-EXECUTIVE DIRECTOR,
CHAIR OF THE
REMUNERATION
COMMITTEE
KARI DANIELS
NON-EXECUTIVE DIRECTOR,
EMPLOYEE ENGAGEMENT
DIRECTOR
HELEN EVANS
COMPANY SECRETARY
COMMITTEE MEMBERSHIP
A N R
COMMITTEE MEMBERSHIP
A N R
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
plc 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, latterly
Chief Executive Officer of
Tesco Ireland. Prior to Ireland
Kari held senior directorship
positions across the Tesco
Group in Europe and the
UK. Prior to Tesco she
was a senior executive at
Superdrug, Wella and S C
Johnson.
Helen was appointed
General Counsel and
Company Secretary with
effect from November
2022 having led the client
contracting function at
Clipper Logistics prior to
joining Topps Tiles. She
qualified as a solicitor in
2012 and has gained
extensive legal and
compliance expertise
from both private practice
and in-house roles. Helen
holds an MBA from the
triple accredited Sheffield
University Management
School.
67
THE COMPANY
TOPPS TILES PLC
REGISTRATION NUMBER
3213782
REGISTERED OFFICE
Topps Tiles, Thorpe Way,
Grove Park, Enderby,
Leicestershire LE19 1SU
COMPANY SECRETARY
Helen Evans
LONDON STOCK EXCHANGE
SYMBOL
TPT
THE GROUP
Comprises Topps Tiles Plc and
all subsidiary companies.
OUR ADVISERS
INDEPENDENT AUDITOR
Pricewaterhouse Coopers LLP
Donington Court
Pegasus Business Park
Castle Donington, DE74 2UZ
United Kingdom
BANKERS
Barclays Bank PLC
3 Hardman Street,
Spinningfields, Manchester
M3 3HF
REGISTRARS
Link Group
Central Square
10th Floor, 29 Wellington Street
Leeds
LS1 4DL
SOLICITORS
Osborne Clarke LLP
One London Wall
London, EC2Y 5EB
FINANCIAL PR ADVISERS
Citigate Dewe Rogerson
8th Floor, Holborn Gate
26 Southampton Buildings
London, WC2A 1AN
BROKERS
Peel Hunt LLP
100 Liverpool Street
London
EC2M 2AT
Liberum Capital Limited
Ropemaker Place Level 12
25 Ropemaker Street
London, EC2Y 9LY
OUR GOVERNANCE 68
EXECUTIVE COMMITTEE
ROB PARKER
CHIEF EXECUTIVE
STEPHEN HOPSON
CHIEF FINANCIAL OFFICER
Read the biography on
Read the biography on
page 66
page 66
RICHARD CARTER
MANAGING DIRECTOR
OF RETAIL
Appointed 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 had
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 LITTLE
MANAGING DIRECTOR
OF COMMERCIAL
Appointed Managing Director of
Commercial in October 2021. An LLM
graduate holding an MSc in Property,
Dan has more than 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.
LINDA SLEATH
HR DIRECTOR
TIM TATLOCK
BUYING 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 for Brakes UK, part of the
Sysco Organisation. Linda has worked
in operational and HR leadership
roles across FMCG and retail for such
organisations as Boots International,
Molson Coors and United Biscuits.
Linda is a qualified Executive Coach
and holds a post-graduate qualification
in psychology and neuroscience from
Henley Business School. She 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.
TOPPS TILES PLC ANNUAL REPORT AND ACCOUNTS FOR THE 52-WEEK PERIOD ENDED 1 OCTOBER 2022 CORPORATE GOVERNANCE REPORT
69
COMMITTED
TO THE
HIGHEST
STANDARDS
GOOD GOVERNANCE IS ESSENTIAL TO THE
SUCCESSFUL DELIVERY OF OUR STRATEGY
AND SUSTAINABLE SUCCESS OVER THE
LONG TERM.”
Darren Shapland
Non-Executive Chairman
DEAR SHAREHOLDER,
I am pleased to present our Corporate Governance Report for
the period ending 1 October 2022 (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.
Although the impact of the Covid-19 pandemic has receded it
nonetheless continued to provide a challenge during the Period,
notwithstanding which, we have maintained focus on delivery of
our strategic agenda and remain confident in the Group’s ability
to successfully manage any further short-term uncertainty that
might arise from the re-emergence of Covid-19, or from current
economic headwinds, and deliver our strategy over the long
term. I am pleased to report that, having held some meetings
in the Period remotely, we have now returned to holding in-
person meetings.
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.
STATEMENT OF COMPLIANCE WITH THE
UK CORPORATE GOVERNANCE CODE
The Company complied fully with the principles and provisions
of the UK Corporate Governance Code 2018 (the “Code”)
throughout the year ended 1 October 2022. Details of how the
main principles of the Code have been applied are both set out
below and found in the Strategic Report, Directors’ Remuneration
Report and Audit Committee Report.
ANNUAL GENERAL MEETING
Shareholders 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.
2022 ANNUAL GENERAL MEETING
Covid-19 restrictions continued to impact how we conducted
our AGM, as a result of the Omicron variant. With the safety
of our colleagues, Shareholders and other attendees being of
paramount importance, we followed best practice guidance
at the time and held a closed meeting at our Head Office in
Leicester. We provided a facility for Shareholders to submit
questions in advance and voting was by proxy.
2023 ANNUAL GENERAL MEETING
For our next Annual General Meeting in January 2023, we are
keen to welcome Shareholders in person. We are, therefore,
proposing to hold the Annual General Meeting at the Marriott
Hotel, Smith Way, Grove Park, Leicester LE19 1SW and to help
manage proceedings, are asking Shareholders who wish to
attend to register their intention to do so in advance. In the event
that there is a re-emergence of Covid-19 restrictions, or for any
other reason, such that we consider it is no longer possible or
practical for Shareholders to attend the meeting, we will notify
Shareholders of any changes to the arrangements on our website
and make a public announcement via a Regulatory Information
Service.
OUR GOVERNANCE 70
CORPORATE GOVERNANCE REPORT
The Annual General Meeting provides Shareholders with a
good opportunity to meet with and ask questions of the Directors
and, to ensure we are in a position to respond and engage in
detail at the meeting we would ask that these are, if possible,
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 in advance
online by proxy. Voting on all resolutions will be conducted by
way of a poll rather than a show of hands which is a more
transparent method of voting with Shareholders’ votes counted
according to the number of shares registered in their names,
rather than according to the number of Shareholders who attend
the Annual General Meeting. The results will be published on our
website www.toppstilesplc.com, and also released to the London
Stock Exchange via a Regulatory Information Service.
Please see the Notice of Annual General Meeting, and
accompanying notes, for details of the resolutions, when
and how to vote and how to ask a question in advance.
RESOLUTIONS AT 2022 AGM
At the 2022 Annual General Meeting, resolutions 4 (to Re-elect
Darren Shapland as a Director), 12 (Directors’ Authority to Allot
Shares), 13 (Disapplication of Pre-emption Rights – General), 14
(Disapplication of Pre-emption Rights - Specific) and 15 (Authority
to Make Market Purchases of Shares) each passed with less than
80% of votes cast in favour.
In accordance with provision 4 of the Code, the Board consulted
and engaged with Shareholders to understand and discuss their
views with respect to these resolutions. It considers that Darren
Shapland, who was appointed to the Board in March 2015,
continues to discharge his role as Chairman effectively and
that his contribution is important to the Company’s long-term
sustainable success. Resolutions 12–15, which also appeared
on the Investment Association’s Public Register in 2021, are
considered routine practice for UK listed companies and
within the Investment Association’s Share Capital Management
Guidelines. The Board is aware, however, that some non-UK
resident investors may have a policy of not supporting resolutions
of this nature which, when passed, grant the Board specific
authorities without the need to seek further Shareholder approval.
While the Board continues to consider that the flexibility afforded
by these authorities is in the best interests of the Company and its
Shareholders, it, nonetheless recognises, following Shareholder
engagement, that certain special resolutions concerning share
capital management will not command sufficient Shareholder
support to be approved and, hence, will not be seeking their
renewal at the forthcoming AGM.
The views of all Shareholders are important to the Company
and the Board is committed to maintaining ongoing engagement
with its Shareholders.
DIALOGUE AND BEING AVAILABLE TO SHAREHOLDERS
The Board maintains ongoing 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 are available to discuss any
questions regarding the running of the Company.
The Directors build on a mutual understanding of objectives
between the Company and its Shareholders, with annual
presentations and regular communications over the year. There
has been extensive engagement with the Company’s major
Shareholders, both prior and subsequent to the 2022 AGM,
to understand their views on governance and performance
against the strategy while the Committee Chairs also engage
on significant matters related to their areas of responsibility.
This year, Diana Breeze, our Remuneration Committee Chair,
has engaged with and sought the views of major Shareholders
representing more than 60% of the share register on the
proposed new Remuneration Policy that will be submitted to the
AGM for approval in January 2023 and Stephen Hopson, our
CFO, engaged with major Shareholders throughout the process
of forming our new capital allocation and dividend policy which
is outlined in the Financial Review on pages 36 to 41.
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 analysts’
research relating to the Company are circulated to Directors and
the Company receives a monthly Investor Relations report, which
includes an analysis of the Company’s Shareholder register, details
of which are provided to all members of the Board.
Pictured: Diamante Lavender
TOPPS TILES PLC ANNUAL REPORT AND ACCOUNTS FOR THE 52-WEEK PERIOD ENDED 1 OCTOBER 2022 71
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. This year, the decision was made to outsource the
whistleblowing procedure to a specialist third party to improve
the perception of independence and encourage colleagues to
raise any concerns they may have. 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.
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 incentives
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 them, which is available on the Group’s
corporate website.
NON-EXECUTIVE DIRECTORS
The Board ensures that at least half of its members, excluding
the Chairman, are independent Non-Executives and annually
reviews any relationships or circumstances which are likely to
affect their independence.
As Senior Independent Director, Keith Down 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 annually, without the Chairman present, to
discuss the Chairman’s performance and any other matters
as required. The Non-Executive Directors provide constructive
challenge, strategic guidance and, with the Chairman, meet
regularly without the Executive Directors present to appraise
the performance of the Executive Directors against agreed
performance targets.
TIME COMMITMENT
When making new appointments, the Board carefully considers
the competing demands on candidates’ time and candidates are
required to disclose any significant commitments together with
the 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.
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.
OUR GOVERNANCE 72
CORPORATE GOVERNANCE REPORT
BOARD COMPOSITION
There have been no changes to the Board’s composition during the Period.
DARREN SHAPLAND (19–03–15) I
Non-Executive/Board Chair
ROB PARKER (10–04–07)
Executive/Chief Executive
Audit
I
Nomination
and Governance
Remuneration
Audit
Nomination
and Governance
Remuneration
C
I
I
I
I
STEPHEN HOPSON (02–11–20)
Executive/Chief Financial Officer
KEITH DOWN (02–02–15) I
Non-Executive/Senior Independent Director
Audit
I
Nomination
and Governance
Remuneration
Audit
Nomination
and Governance
Remuneration
I
I
C
M
M
DIANA BREEZE (01–02–21) I
Non-Executive
KARI DANIELS (01–04–21) I
Non-Executive/Employee Engagement Director
Audit
M
KEY:
C Chair
Nomination
and Governance
Remuneration
Audit
Nomination
and Governance
Remuneration
M
C
M
M
M
M Member
I Invitation – may attend at the invitation of the Chair
I Independent
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 receive detailed papers which provide current information about trading performance, the
Group’s overall financial position and its achievement against the prior year, budgets and forecasts. Regular agenda items include
updates on health and safety, sustainability, diversity and inclusion, the Group’s performance against key performance indicators and
progress towards strategic objectives. Members of the Executive team are regularly invited to attend and update the Board on 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; 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:
Darren
Shapland
12 12
Rob
Parker
12 12
Stephen
Hopson
Keith
Down
12 12
12 12
I
I
2
2
100%
I
I
I
I
I
I
100%
100%
4
4
4
4
2
2
100%
Diana
Breeze
12 12
4
4
4
4
2
2
100%
Kari
Daniels
12 12
4
4
4
4
2
2
100%
Meetings attended
Possible meetings
I Invitation – may attend at the invitation of the Chair
TOPPS TILES PLC ANNUAL REPORT AND ACCOUNTS FOR THE 52-WEEK PERIOD ENDED 1 OCTOBER 2022
73
• 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 strategic plan.
• Keith Down: a qualified accountant and experienced
Chief Financial Officer, with substantial retail and
consumer experience. Keith chairs the Audit Committee
and, as Senior Independent Director, provides a
sounding board for the Chairman, serving as an
intermediary for the other Directors when necessary
and is 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. Kari acts as Employee Engagement
Director.
Pictured: Quarry Red
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
more than 35 years of retail and consumer experience.
He sets the agenda for meetings in consultation with Rob
Parker our Chief Executive, Stephen Hopson our Chief
Financial Officer and our Company Secretary, chairs
the meetings and promotes a culture of openness and
debate, including inviting the Executive and Non-Executive
Directors to debate and challenge the Group’s Strategy.
• Rob Parker: a qualified accountant with over 15
years of Board experience who has led the Group since
2019, including through the challenges of Covid-19.
Rob formulates and proposes the strategic direction of
the Group and incorporates this into business plans for
regular discussion and agreement by the Board. He has
overall responsibility for the operational and financial
performance of the Group.
INDEPENDENCE
The Board reviews the independence of Non-Executive Directors
on an ongoing basis and is satisfied that all Non-Executive
Directors remain independent in accordance with the Code.
RE-ELECTION
In line with best practice, all Directors will be subject to annual
re-election at the Annual General Meeting in January 2023.
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
While all Board members are responsible for their own
development, they are provided with 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
annual timetable for regular updates, including from the
Company’s advisers, on key areas covering the economy,
the market, Directors’ duties and corporate governance, and
developments in remuneration practice, each of which were
received by the Board during the Period.
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.
OUR GOVERNANCE 74
CORPORATE GOVERNANCE REPORT
BOARD
KEY RESPONSIBILITIES
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
KEY RESPONSIBILITIES
• Chair and Executive Directors’
AUDIT
COMMITTEE
KEY RESPONSIBILITIES
• Financial reporting
NOMINATION AND
GOVERNANCE COMMITTEE
KEY RESPONSIBILITIES
• Board structure
remuneration
• Senior management
remuneration
• Share incentive plans
• Narrative reporting (fair,
• Board evaluation
balanced and understandable)
•
Internal controls and risk
management systems
• Employee benefits structures
• Compliance, whistleblowing
and fraud
•
Internal audit
• External audit
• 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
We recognise the strategic benefits of developing and delivering
the agenda and targets for Environment, Social and Governance
(“ESG”) throughout the Group which supports key areas of Group
focus and is an important part of the Group’s strategy. Information
on our environmental initiatives, in support of our Group strategy,
is found on pages 24 and 25, and pages 50 to 53 of the
Strategic Report and our report under the Taskforce for Climate-
related Financial Disclosures is found on page 58. Information on
social initiatives, including our continuing focus on diversity and
inclusion, is found on pages 54 to 57 of the Strategic Report.
Each ESG topic is reviewed by the Board no less than twice
annually, with reports and presentations during the year from
the Chief Executive, Company Secretary, relevant members
of the Executive team and, where appropriate, external
advisers on developments to enable the Board to consider and
agree on priorities for the forthcoming year and beyond with
implementation plans prepared and monitored by the Board
and, if relevant, appropriate Board Committee.
TOPPS TILES PLC ANNUAL REPORT AND ACCOUNTS FOR THE 52-WEEK PERIOD ENDED 1 OCTOBER 2022 75
BOARD EFFECTIVENESS
We consider Board effectiveness in our internal Board and
Committee evaluation review process. This aims to stimulate
the Board’s thinking on how members of the Board can carry
out their roles and encourages them to focus on continually
improving both their, the Board, and its Committees’
effectiveness. During the Period and following a review of
the process, the evaluation was undertaken with an online
governance assessment tool supported by an external provider,
Independent Audit Limited, to provide a more in-depth objective
analysis of Board and Committee effectiveness, identify key
areas for discussions and, hence, deliver a more robust review
process.
While we recognise that there is always potential to improve our
effectiveness, we believe that our Board is a strong team that
works well together. Following last year’s evaluation, we agreed
on several actions and have reported progress against these on
page 83, this year we have again agreed 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, details of
which are set out on pages 42 to 45.
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 22 and 23
SECTION 172
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 49.
FAIR, BALANCED AND 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.
OUR GOVERNANCE 76
CORPORATE GOVERNANCE REPORT
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 core factories supplying our retail and
commercial businesses. We are working closely with Intertek,
the leading Quality Assurance Experts who have carried out
independent third-party auditing on production facilities where
there is any product or geographical risks. These Workplace
Conditions Assessment Audits have focused on regional risks
within the building and construction sector.
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
30 November 2022
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.
The Group has established internal control and risk management
systems concerning the process for preparing the consolidated
financial statements. 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.
GROUP SOURCING POLICY
To ensure that there is appropriate governance and control,
and to, wherever possible, deliver competitive commercial
advantage, the Group has, for a number of years, operated
and adhered to a sourcing policy. This governs all commercial
relationships with suppliers, including those that are
Shareholders, whereby, subject to Executive Management
approval, no more than 10% of the Group’s total Coverings
purchase value is sourced from any single supplier subject to
where sourcing is from outside the EU where purchases from any
region shall not exceed 15% of spend, and no more than 20%
for Essential Products, particularly grouts and adhesives which
tend to have a narrower supply base.
TOPPS TILES PLC ANNUAL REPORT AND ACCOUNTS FOR THE 52-WEEK PERIOD ENDED 1 OCTOBER 2022 77
WHAT OUR CUSTOMERS SAY:
LOVELY, REALISTIC AND HARD-WEARING
We first put these in our hall, study and utility room then
blended in with some rustic ones through to the dining
room and more recently in the upstairs bathrooms.
Everyone compliments them and asks if they’re wood . . .
very hard wearing and the perfect alternative to wooden
floors when you have dogs. Highly recommend.”
Pictured: Linear Calacatta Matt and Gloss, Oakhurst Brown
OUR GOVERNANCE 78
CORPORATE GOVERNANCE REPORT
AUDIT COMMITTEE
REPORT
THE COMMITTEE
The Committee held four scheduled meetings during the
Period, based on an annual plan agreed with the Chair
of the Committee.
THE COMMITTEE CONTINUES TO OPERATE
EFFECTIVELY PROVIDING APPROPRIATE
ASSURANCE TO THE BOARD.”
Keith Down
Chair of the Audit Committee
OVERVIEW
OTHER MEMBERS:
• Diana Breeze
• Kari Daniels
MEETINGS HELD:
4
The Audit Committee comprises three independent Non-Executive
Directors Keith Down (Chair), Diana Breeze and Kari Daniels.
Their qualifications and experience are detailed on pages 66
and 67. 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 COMMITTEE
The Audit Committee considers the nature, scope and
effectiveness of the audit process (both internal and external)
to ensure that the programme is aligned to key risks. It also
monitors, reviews, and approves the internal audit programme
and receives regular internal audit reports 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 Auditors’ independence
and objectivity and the effectiveness of the audit process.
The Committee is also responsible for ensuring that arrangements
are in place to enable colleagues, in confidence, to raise any
concerns about possible improprieties in matters of financial
reporting or other issues. In the year, to further strengthen
the existing process, the Committee approved a decision to
outsource the whistleblowing process to a third-party provider,
which should encourage colleagues to raise any concerns
through a completely confidential and independent channel.
2022 KEY ACHIEVEMENTS
• Oversight of a rigorous tender process and the proposal to
appoint a new external Auditor for the 2023 accounting year.
• Oversight of ongoing work to streamline year-end processes
to support delivery of an efficient external audit.
• Oversight of improvements in the continued development
of data-led approach to the management and reporting of
inventory provisions.
• Oversight of ongoing improvements to the implementation
of IFRS 16.
• Oversight of the Internal Audit agenda and review of
progress of internal audit priorities, including a decision
to outsource the whistleblowing process.
AREAS OF FOCUS IN 2023
• Oversight of work to continue the development of 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 transition to the new external Auditor, subject
to approval of Shareholders.
• Oversight of development of the Group’s response to further
audit and corporate governance reforms.
TOPPS TILES PLC ANNUAL REPORT AND ACCOUNTS FOR THE 52-WEEK PERIOD ENDED 1 OCTOBER 2022 79
The Audit Committee Chair, in conjunction with the Company
Secretary, ensures that there is an annual evaluation of the
Committee’s effectiveness and its processes. During the Period
this was conducted internally and comprised use of an online
governance assessment tool, supported by an external provider.
While recognising certain areas for development, the conclusion
was that the Committee continues to operate effectively providing
appropriate assurance to the Board.
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 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 macroeconomic factors, including the risks presented by
inflationary pressures on consumers and businesses, and
global factors such as supply chain disruption.
• 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.
• 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. Progress has
been made in this area, however, the continued development
of this process will be a key area of focus in 2023.
• 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. The
calculation of inventory provisions has been a significant
focus this year, with good steps made by the finance function
to use increasingly sophisticated data analysis to derive
an appropriate inventory provision based on historical sell
through of any discontinued or low selling product lines.
As such, the level of management judgement required has
reduced, which is encouraged by the Committee. 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 three-year look-forward basis. The conclusions of those
reviews are included in the Strategic Report.
• Annual Review of the Group Tax and
Treasury Policy – this review is performed annually
and published on the Company’s website.
• Monitoring the Group’s compliance with Accounting
Standards, reviewing all material judgemental accounting
areas, and reviewing all items considered to be adjusting to
support external understanding of underlying performance.
OUR GOVERNANCE 80
CORPORATE GOVERNANCE REPORT
2022 EXTERNAL AUDIT
The scope of the external audit of the 2022 Annual Report and
Accounts was presented by the external Auditor to the Committee
in May 2022 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 Auditor.
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 Auditor have not provided non-audit
services to the Company during the Period.
During the year, our Auditor has specifically focused on the
implementation of IFRS 16 “Leases” and also the development
of enhanced inventory provisioning methodology.
The audit fee for the statutory audit of the Company’s
consolidated financial statements and audit-related services
for the Period is £373,000 (2021: £303,000).
TENDER AND PROPOSED APPOINTMENT
OF NEW EXTERNAL AUDITOR
Following thorough consideration, this year the Committee
decided to conduct a tender process for the appointment of a
new external Auditor for the 2023 financial year. The process
was designed to be completed by year end, so that the chosen
firm could be recommended to Shareholders for approval at the
2023 AGM. The scope of the tender was for the Topps Tiles
Group audit, the audit of Topps Tiles Plc, and statutory audits
of relevant subsidiary companies.
Pictured: Mystone Blanco, Mystone Perla and Nordbon Nogal
TOPPS TILES PLC ANNUAL REPORT AND ACCOUNTS FOR THE 52-WEEK PERIOD ENDED 1 OCTOBER 2022 81
PROCESS AND GOVERNANCE
The overall objective of the audit tender process was to select
the best Auditor in terms of audit quality within a reasonable
price range. To deliver this objective, a Tender Panel (“Panel”)
was appointed consisting of the Chair of the Audit Committee,
the Chief Financial Officer, the Director of Finance, the Financial
Controller and a Financial Accounting Assistant. The Panel
ensured that the Audit Committee was updated throughout the
process, and ultimately the Audit Committee was responsible
for presenting two options to the Board, together with a justified
preference for one of them for a final decision to be made.
Following a desktop review of the market, five audit firms were
initially invited to meet the Panel. The minimum requirements at
this stage included confirmation that firms were willing to bid,
were free of any conflicts of interest, and were able to accept
the appointment if selected. One firm withdrew from the process
during this period and four made initial presentations to the
Panel. Following this stage, a formal request for proposal was
made to two firms, who were invited to present to the Panel.
Before the final presentation, equivalent access to management
was given to both firms, including meetings with the Chair of
the Audit Committee, the Chief Financial Officer, and relevant
members of the finance team, and any information requests were
carefully considered, with the same information provided to each
firm to ensure a level playing field. The criteria for the decision
were as follows:
• The approach to ensuring overall audit quality, including
technical skill and the transition plan;
• The quality of the audit service including quality of team,
audit planning and structure;
•
Insights and value added through the audit, including
industry knowledge and access to specialists; and
• Audit fee and value for money.
In the final meeting, following a presentation to the Panel, there
was a structured question and answer session, and both firms
were scored against the criteria described above.
OUTCOME
Both of the final tenders were to a very high standard however
the Panel unanimously proposed that Mazars LLP be appointed
as the new external Auditor, based on their high levels of
audit quality, good strength in depth, strong cultural fit and
acceptable value for money. The Audit Committee reviewed
the results of the process during its meeting in September 2022
and agreed to recommend to the Board that it should propose
Mazars LLP for appointment as the external Auditor of the
Group. A detailed paper was considered by the Board which
accepted the recommendation that, subject to approval from
Shareholders, Mazars LLP will be appointed as the new external
Auditor following the 2023 AGM. The careful transition from
Pricewaterhouse Coopers LLP to Mazars LLP will be a key focus
for the Audit Committee in the forthcoming year.
Keith Down
Chair of the Audit Committee
Pictured: Elevo Natural Chevron
OUR GOVERNANCE 82
CORPORATE GOVERNANCE REPORT
NOMINATION AND
GOVERNANCE
COMMITTEE REPORT
THE BOARD AND ITS COMMITTEES
CONTINUED TO PROVIDE EFFECTIVE
LEADERSHIP AND EXERCISE THE REQUIRED
LEVELS OF GOVERNANCE AND CONTROL.”
Darren Shapland
Chair of the Nomination and Governance Committee
OVERVIEW
OTHER MEMBERS:
• Diana Breeze
• Keith Down
• Kari Daniels
MEETINGS HELD:
2
THE COMMITTEE
The Committee, comprising independent Non-Executive Directors
Darren Shapland, who is Chair, Keith Down, Diana Breeze and
Kari Daniels, held two scheduled meetings during the Period,
based on an annual plan agreed with the Committee Chair.
ROLE OF THE COMMITTEE
The principal responsibilities of the Committee are to regularly
review the structure, diversity, size and composition of the Board
and 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, ensuring plans are in place for orderly
succession to both the Board and senior management positions,
2022 KEY ACHIEVEMENTS
• Board succession and development of plans for the orderly
succession of the roles of Chair and Senior Independent
Director.
• Executive succession and development plans, to ensure
that the Group’s medium and longer-term organisational
requirements are met.
• Support for and development of the Company’s ESG
agenda.
• Oversight of the Company’s developing strategy on Diversity
and Inclusion, including the Company’s response to new
reporting requirements under the Listing Rules, which will
apply from 2023, in respect of management levels below
the Board.
• 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; introduction of a new
Board and Committee evaluation process using an online
governance assessment tool supported by an external
provider and planning actions to address points raised in
the previous year’s evaluation feedback.
AREAS OF FOCUS IN 2023
• Development of plans for the orderly succession of the roles
of Chair and Senior Independent Director.
• Continued focus on and monitoring of the Company’s
strategy on Diversity and Inclusion.
• Executive development and succession planning to meet
medium and longer-term requirements.
• Oversight of the Company’s developing ESG agenda.
• Development of the Board and Committee evaluation
process.
TOPPS TILES PLC ANNUAL REPORT AND ACCOUNTS FOR THE 52-WEEK PERIOD ENDED 1 OCTOBER 2022 83
showed that it is effective in most areas, is well led, and that the
Directors challenge constructively. It concluded that the Board
and its Committees continued to provide effective leadership and
exercise the required levels of governance and control and that
each Director continued to contribute effectively and demonstrate
commitment to their role.
There were a number of recommendations arising from the
evaluation that have been considered by the Board which
agreed that an action plan, supported by the Company
Secretary, would be developed to address key findings of how
technology can drive the Strategy, improve oversight of cyber
risk and further develop people strategy and ESG. This plan
will form a standing part of the activities of the Board over the
coming year.
Following significant changes to the Board, last year’s evaluation
reflected a positive view on the performance of the Board
and its Committees. It found a positive approach to corporate
responsibility, adherence with and development of the Group’s
culture and values, strong combination of complementary
skills and experience from Board members and there being a
constructive debate and willingness to ask challenging strategic
and operational questions with the right balance between
challenge and support. The evaluation highlighted some
areas for attention in 2022, which we have addressed, as
reported below:
and oversees the development of a pipeline for succession
recognising the importance and benefits that can arise from
diversity of background, experience, ethnicity and gender.
Furthermore, the Committee oversees the delivery of high
standards of corporate governance throughout the Group.
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.
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. This year we carried
out an internal review of Board and Committee effectiveness
utilising an online governance assessment service supported by
an external provider, Independent Audit Limited, who helped us
prepare a report setting out findings for review.
While Board effectiveness reviews can, given their purpose,
feel somewhat negative with the outcome primarily being
consideration of areas for improvement, the review identified
many positive aspects of the current operation of the Board and
BOARD EVALUATION FINDINGS
Key 2021 Board evaluation findings
PROJECTS
ACTIONS TAKEN
While the review and analysis of future projects was very strong, it was recognised that the existing structures in place for post
implementation reviews could be improved. As a result, regular management strategy review meetings now include a section on
post implementation reviews to improve our ability to learn from the outcome of major projects and investments. A summary of all
of these reviews over a 12-month period is now included in the annual Strategy review process, held at Board level.
BOARD EVALUATION
ACTIONS TAKEN
We reviewed and developed the Board and Committee evaluation process with the use of an online governance process,
supported by an external specialist provider which helped with preparation of clear and concise reports setting out the results and
suggested actions for review.
DIVERSITY AND INCLUSION
ACTIONS TAKEN
There has been a review of the Board’s approach to ensuring diversity and inclusion in the Board and senior management team,
noting the requirements of the Listing Rules. A key element of the Group’s “Leading People” strategy is to embed gender and ethnic
diversity and inclusion throughout the Group and the Board has received and reviewed the process that has been, and continues
to be, developed for this to be achieved.
OUR GOVERNANCE 84
CORPORATE GOVERNANCE REPORT
BOARD EVALUATION PROCESS
STAGE 1
Following
recommendation by the
Committee it was agreed
by the Board to use an
online governance tool,
supported by an external
specialist provider, to
facilitate the internal
Board and Committee
effectiveness review.
STAGE 2
Board and Committee
members complete
questionnaires using
the online governance
service with multiple-
choice questions and
comment boxes.
STAGE 3
A report, using analytical
support from the external
specialist provider,
is compiled on the
effectiveness of the Board
and its Committees with
relevant results, comments
and suggested actions
discussed with the
relevant Chair.
STAGE 4
The results are presented
to the Board and
Committee members, for
discussion and agreement
and the relevant Chair,
supported by the
Company Secretary,
follows up on the findings
to agree on appropriate
actions.
Pictured: Manhattan Grey
Pictured: Catania™ Blue Tile
TOPPS TILES PLC ANNUAL REPORT AND ACCOUNTS FOR THE 52-WEEK PERIOD ENDED 1 OCTOBER 2022 OUR GOVERNANCE
85
WHAT OUR CUSTOMERS SAY:
STUNNING, CLASSY TILES
I ordered the Catania tiles in blue for my revamped
bathroom and am absolutely delighted with them. They
look fantastic and everyone who sees them remarks
on them. My builder told me that his next clients have
decided they want the same tiles in their bathroom!”
86
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 (“Company”) and its subsidiary companies)
together with the audited Financial Statements for the 52-week
period ended 1 October 2022 (the “Period”). The Corporate
Governance Report forms part of this report.
PRINCIPAL ACTIVITIES
The principal activity of the Group is the sale and 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 1 October 2022 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 pages
8 and 9, and the Strategic Report on pages 12 to 63, which
includes information on Environment, Social and Governance
(“ESG”) issues, which form part of the Directors’ Report.
The 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 34 and 35.
The Company conducts an annual strategic risk discussion with
the Chair 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 52-week
period ended 1 October 2022 are set out on pages 124 to
159. The Group’s profit for the Period from continuing operations,
after taxation, was £9,191,000 (2021: £10,676, 000).
An interim dividend of 1 pence per share was paid on 15 July
2022. Following careful consideration, and for the reasons given in
the Chairman’s Statement, the Board is recommending the payment
of a final dividend of 2.6 pence per share which, taken together
with the interim dividend will give a total dividend of 3.6 pence per
share for the year (2021: 3.1 pence per share ). The final dividend
will, subject to Shareholder approval at the 2023 Annual General
Meeting (“AGM”), be payable on 3 February 2023 to Shareholders
on the register on 23 December 2022. The ex-dividend date will be
22 December 2022.
BOARD OF DIRECTORS
The Directors of the Company who were in office during the year
and up to the date of signing the Financial Statements were as
follows:
D Shapland
Non-Executive Chairman
R Parker
Chief Executive
S Hopson
Chief Financial Officer
K Down
Senior Independent Non-Executive Director
D Breeze
Non-Executive Director
K Daniels
Non-Executive Director
Although not required by the Company’s Articles of Association,
in line with good Corporate Governance, all Directors will
retire voluntarily and offer themselves for re-election at the
Annual General Meeting in January 2023. For the Directors’
biographical details, see pages 66 and 67.
The Board considers that the contribution of each of the Directors
standing for election is important to the Company’s long-term
sustainable success. Further details are set out in the Corporate
Governance Report on pages 69 to 85.
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 which 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. A copy of
the Articles is 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 on pages 82 to 85
and Directors’ Remuneration Report from page 90.
VOTING AT THE ANNUAL GENERAL MEETING
The Board is again encouraging Shareholders to vote online
by proxy, appointing the Chair of the meeting as their proxy
regardless of whether they plan to attend in person which will
ensure that Shareholders’ votes will be counted even if they are
unable to attend. Voting on all resolutions will be conducted by
way of a poll rather than a show of hands. Voting by poll 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 and the results will be published on
our website www.toppstilesplc.com and released to the London
Stock Exchange via a Regulatory Information Service.
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.
TOPPS TILES PLC ANNUAL REPORT AND ACCOUNTS FOR THE 52-WEEK PERIOD ENDED 1 OCTOBER 2022 87
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.
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
As at 1 October 2022, the Company had been notified, in
accordance with the Disclosure Guidance and Transparency
Rules, of the following notifiable voting rights:
Number
% held
58,569,649
MS Galleon AG
28,898,766
Aberforth Partners LLP
21,597,274
Rex Partners LLP
Invesco Asset Management
9,790,934
MI Chelverton UK Equity Growth Fund 9,500,000
8,416,667
AXA Investment Managers SA
29.9
14.8
11.0
5.0
4.8
4.3
The interests in the table above are as stated by the Shareholders
at the time of the notification and current interests may vary.
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
Directors 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.
GREENHOUSE GAS EMISSIONS AND CARBON REPORTING
Information relating to greenhouse gas emissions and carbon
reporting data is set out on page 50 of the Strategic Report and
is incorporated by reference into this report.
CHARITABLE AND POLITICAL CONTRIBUTIONS
The Group has designated charitable partners; Alzheimer’s
Society and Leicestershire Cares. Across the Group’s business,
colleagues engage in numerous fundraising activities, which are
set out on pages 56 ad 57 of the Strategic Report. During the
Period, the Group made no monetary charitable donations and
no political contributions.
ESG
The Company has a long-standing ESG agenda covering
amongst other matters, Community, Charity, the Environment and
Our People, which includes our continuing focus on diversity
and inclusion. Details of our current activities are set out in the
Strategic Report, our Section 172 Statement and our report
under the Taskforce for Climate-related Financial Disclosures.
In the period from 1 October 2022 to the date of this report
we have received no notification in relation to substantial
shareholdings, in accordance with the Disclosure Guidance and
Transparency Rules.
We take the impact of our business on our environment extremely
seriously, having adopted a range of environmental metrics,
details of which are set out in the Strategic Report, and pay
particular attention to labour standards and factory conditions.
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.
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 Directors’ interests in the shares of the Company and
details of the Directors’ share options are given in the
Directors’ Remuneration Report on page 110.
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
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, please see page 76.
DIVERSITY
The Board recognises the importance and benefits of
diversity throughout the organisation and the Nomination
and Governance Committee regularly reviews the balance of
skills, knowledge, and experience on the Board and executive
management team. Appointments are made on merit, against
objective criteria and with due regard for the benefits that
diversity of background, experience and gender can bring. As
noted in the Corporate Governance Report, this year diversity
and inclusion has continued to be an area of focus and we fully
recognise the changing requirements of the Listing Rules, which
we are taking steps to address. Currently the Board is one third
female.
OUR GOVERNANCE 88
DIRECTORS’ REPORT
Our workforce at the Period-end date comprises:
Directors
Senior managers
Other employees
Total employees
% of total
2022
Male
Female
4
11
1,244
1,259
73%
2
3
451
456
27%
Total
6
14
1,695
1,715
Male
4
12
1,254
1,270
75%
2021
Female
2
3
429
434
25%
Total
6
15
1,683
1,704
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 Strategic Report,
Corporate Governance Report on page 69 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 Auditor is 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 Auditor
is aware of that information.
This confirmation is given and should be interpreted in
accordance with the provisions of s418 of the Companies
Act 2006.
APPOINTMENT OF THE COMPANY’S AUDITORS
Following a competitive tender process, details of which are
set out in the report from the Audit Committee on page 80,
a resolution to appoint Mazars LLP as the Company’s Auditor will
be proposed at the forthcoming Annual General Meeting.
TOPPS TILES PLC ANNUAL REPORT AND ACCOUNTS FOR THE 52-WEEK PERIOD ENDED 1 OCTOBER 2022
DIRECTORS’ RESPONSIBILITIES STATEMENT
89
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
30 November 2022
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 UK-adopted International Financial Reporting Standards
(“IFRSs”) and applicable law 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 UK-adopted IFRSs 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.
OUR GOVERNANCE 90
DIRECTORS’ REMUNERATION REPORT
REMUNERATION
COMMITTEE REPORT
PERFORMANCE MEASURES ARE
SELECTED THAT ARE ALIGNED WITH THE
PERFORMANCE OF THE GROUP AND
THE INTERESTS OF SHAREHOLDERS.”
Diana Breeze
Chair of the Remuneration Committee
OVERVIEW
OTHER MEMBERS:
• Kari Daniels
• Keith Down
MEETINGS HELD:
4
STATEMENT FROM THE CHAIR OF THE
REMUNERATION COMMITTEE
DEAR SHAREHOLDER
On behalf of the Remuneration Committee, I am pleased to
present the Directors’ Remuneration Report for the 52 weeks
ended 1 October 2022 (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)
(Amendment) Regulations 2013 (the “Regulations”), The UK
Corporate Governance Code 2018 (the “Code”) and the
Financial Conduct Authority’s Listing Rules and takes into account
the accompanying Directors’ Reporting Guidance and the
relevant guidelines of the Shareholder representative bodies.
The report is split into three parts:
1. This annual statement, from the Chair of the Remuneration
Committee.
2. Our Directors’ Remuneration Policy (the “Policy”). As
required, this year we will be taking our Policy (which has
been updated as set out below) to a binding Shareholder
vote at the AGM in January 2023. Subject to approval, the
updated Policy will then apply for three years from the date
of approval.
3. The Annual Report on 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 Report on Remuneration Report
is subject to an advisory Shareholder vote at the AGM in
January 2023.
REMUNERATION COMMITTEE
The Committee held four scheduled meetings during the
Period, based on an annual plan agreed with the Chair
of the Committee.
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 own remuneration.
ROLE AND RESPONSIBILITIES
The 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 a
high-performance culture.
TOPPS TILES PLC ANNUAL REPORT AND ACCOUNTS FOR THE 52-WEEK PERIOD ENDED 1 OCTOBER 2022 91
PROPOSED CHANGES TO THE DIRECTORS’
REMUNERATION POLICY
Over 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 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.
During the Period, the Committee carried out another review
of the Policy and decided to propose a number of changes
to the Policy to ensure that it:
•
•
is aligned with current and emerging best practice;
takes account of the feedback received from our
Shareholders prior to the 2023 AGM; and
• ensures compliance with the UK Corporate Governance
Code 2018 (the “Code”).
I wrote to our major Shareholders in October 2022 with an
outline of our proposed changes to the Policy and I would like
to thank those who provided feedback. This has been
considered by the Committee prior to coming to the final
proposal as outlined below and on page 93.
Pictured above: Lenton Forest Green
OUR GOVERNANCE 92
DIRECTORS’ REMUNERATION REPORT
The key changes to the Policy are as follows:
•
the introduction of a compulsory deferral of 30% of any
bonus payable into shares for two years;
• an increase in the maximum annual bonus opportunity from
100% to 125% for both Executive Directors;
• an increase in the proportion of annual bonus to be payable
by reference to non-financial performance (including strategic
objectives and ESG measures) from 20% to 30% with the
remaining 70% of bonus to be payable by reference to
financial objectives;
•
•
the introduction of a post-employment shareholding
requirement of 200% of salary (or the actual holding on
departure, if lower) for two years; and
further strengthening of the malus and clawback provisions
by including an additional trigger event of unreasonable
failure to protect the interest of employees and customers.
In addition to the above substantive changes, some minor
wording changes are being proposed primarily to clarify the
way that the Policy is intended to operate in certain areas.
THE NEW TOPPS TILES PLC 2023 SHARE PLAN
As our 2013 LTIP is due to expire on 23 January 2023 and
the Committee has decided to introduce deferred bonus
arrangements from FY23, a new employee share plan, Topps
Tiles Plc 2023 Share Plan, will be submitted to Shareholders for
approval. Awards will be made under this new plan for both
deferred bonus and LTIP from FY23.
PERFORMANCE IN FY22 AND REMUNERATION OUTCOMES
In FY22 we continued to see a level of uncertainty within the
economy. Despite this the business has continued to focus on
growing market share through its “1 in 5 by 2025” goal and
additionally, the purchase of Pro Tiler Tools and the launch of Tile
Warehouse in the year supports our journey to becoming a true
omni-channel retailer.
Following the upheaval of 2020 and 2021 the Committee
reverted to setting full year targets for the Annual Bonus Plan for the
Executive Directors. The adjusted profit before tax target to trigger
payment of a bonus was met and therefore, 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 £198k to Rob Parker and £106k to Stephen Hopson.
This was based on 37.3% in respect of profit targets and 10.8%
in respect of strategic targets which was a total of 48.1% of the
base salary earned over the full year period, as reported in detail
below under Annual Bonus.
The Long-Term Incentive Plan (“LTIP”) awards granted in December
2019 were based upon performance over the three financial
years to 1 October 2022. The awards required a cumulative
adjusted earnings per share (“EPS”) over the period to be at least
19.9p for 25% vesting, increasing to 22.3p for full vesting of the
awards, where the adjusted EPS was “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”.
Pictured above: Calacatta Marble SP Effects, Stello White and Zellica Antique White
TOPPS TILES PLC ANNUAL REPORT AND ACCOUNTS FOR THE 52-WEEK PERIOD ENDED 1 OCTOBER 2022 93
LONG-TERM INCENTIVE PLAN
During FY23, the Committee intends to grant LTIP awards to
the Executive Directors with a maximum opportunity of 100% of
salary under the new Topps Tiles Plc 2023 Share Plan. These
levels are unchanged from previous years. The Committee has
determined that it will again be appropriate for these awards
to be measured against EPS performance of the last financial
year in the three-year performance period (being FY25) rather
than setting cumulative EPS targets covering all three years. 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, with an EPS threshold of 3.56 pence.
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.
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 answer any
questions 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
30 November 2022
Given the impact of Covid-19 on the business following the
award of the shares, the Committee has decided that it is
appropriate to remove the impact of Covid to enable the ultimate
level of vesting to fairly reflect the underlying performance of the
Company and management during this Period.
Therefore, the cumulative adjusted EPS is 20.29 which resulted
in a vesting of 25%, the minimum level of vesting in line with the
Policy in force at the time of grant of the 2019 award. This only
applies to the CEO and not the CFO as the CFO does not hold
a 2019 LTIP award. Therefore, the CEO, Rob Parker will receive
25% of the shares granted, subject to the normal holding period.
REMUNERATION DECISIONS FOR FY23
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 the CEO should be awarded an
increase in base salary from October 2022 of 2% which this
year, given the cost-of-living impact for many of our colleagues,
was below that of the wider workforce. Accordingly, the CEO’s
salary moved to £420,240. For the CFO, as reported last
year, the benchmarking exercise carried out in FY21 indicated
that his salary was below the benchmark for similar-sized
companies, and it was agreed to approve a phased increase
across FY22 and FY23. The Committee approved the second
stage of this increase to Stephen’s base salary to £240,000
from 1 October 2022 (an increase of 9.09% which includes the
2% cost of living increase described above). This increase will
bring his salary closer in line with the external benchmark and
reward continued strong performance, strategic contribution, and
delivery in role.
ANNUAL BONUS
The Annual Bonus Plan for FY23 will continue to be subject to
full year targets for all participants of the scheme. The maximum
bonus opportunity will be 125% of base salary for the CEO
and the CFO in line with the proposed Policy. However, 30%
of any bonus payable will be deferred into shares for two years
under the new Topps Tiles Plc 2023 Share Plan, resulting in
a reduction, at the maximum, of 12.5% in any cash bonus
payable.
The financial element of the award will continue to be measured
against adjusted profit before tax and will account for 70% of
the award. The non-financial element, which accounts for 30%
of the maximum bonus, will be aligned with the Company’s
Strategy for FY23 and include two Strategic Business Objectives
and two ESG metrics, which for FY23 will be focused on
Environment and People.
OUR GOVERNANCE 94
DIRECTORS’ REMUNERATION REPORT
DIRECTORS’ REMUNERATION POLICY
This part of the report sets out the Directors’ Remuneration Policy (the “Policy”) for the Company which, as required under 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 “Regulations”), the Company will be submitting to Shareholders for approval at the AGM
on18 January 2023. The Policy, once approved, will take effect from that date.
THE ROLE OF THE COMMITTEE IN REVIEWING THE REMUNERATION POLICY
Our previous Policy was approved at the January 2020 AGM, which received 98.64% votes in favour. During the year, the
Committee carried out a review of the Policy and has decided to propose some amendments. These changes are being proposed
largely to enhance alignment of our Policy with best practice, taking into consideration feedback we have received from
Shareholders. A summary of the key changes being proposed is set out below:
• An increase in the maximum annual bonus opportunity from 100% to 125%;
• The introduction of annual bonus deferral of 30% of any bonus payable into shares for two years;
• At least 70% of annual bonus to be payable by reference to financial objectives and the remaining to be payable by reference
to non-financial objectives which may include strategic, personal and ESG metrics;
• The introduction of a two-year post-employment shareholding requirement of 200% of salary (or the actual level of holding on
departure, if lower); and
• Further strengthening of the malus and clawback provisions by including the trigger event of unreasonable failure to protect the
interest of employees and customers, and alignment of malus and clawback provisions for annual bonus and LTIP.
In addition, we have made minor changes to the wording of the Policy in a number of areas including:
• Determination of salary for new Executive Directors;
• Committee discretion in operation of annual bonus and LTIP;
• Leaver treatment of annual bonus and LTIP awards; and
• Executive Director external appointments.
Pictured above: Elevo Oak Chevron and Revolution
TOPPS TILES PLC ANNUAL REPORT AND ACCOUNTS FOR THE 52-WEEK PERIOD ENDED 1 OCTOBER 2022 EXECUTIVE DIRECTORS’ REMUNERATION POLICY TABLE
Purpose and
link to strategy
Operation
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.
95
Maximum opportunity
Performance measures
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 colleagues in the Group.
Not applicable.
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.
For new Executive Director hires, the
Committee has the flexibility to set the
salary at a below-market level initially
and to realign it over the following
years as the individual gains experience
in the role. In exceptional circumstances,
the Committee may agree to pay
above-market levels to secure or retain
an individual who is considered by the
Committee to possess significant and
relevant experience which is critical to
the delivery of the Group’s Strategy.
OUR GOVERNANCE 96
DIRECTORS’ REMUNERATION REPORT
Purpose and
link to strategy
BENEFITS
Fixed element of
remuneration set at a
market competitive level
with the aim to attract and
retain Executive Directors
of the calibre required.
Operation
Maximum opportunity
Performance measures
Not applicable.
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.
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.
PENSIONS
Provides appropriate
post-employment benefits
(or cash equivalent).
Any reasonable business-related
expenses (including the tax
thereon) can be reimbursed.
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.
Not subject to performance
measures in line with HMRC
practice.
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 and any
HMRC-approved plans that may
be introduced by the Company for
all colleagues.
TOPPS TILES PLC ANNUAL REPORT AND ACCOUNTS FOR THE 52-WEEK PERIOD ENDED 1 OCTOBER 2022 97
Purpose and
link to strategy
ANNUAL BONUS
Rewards performance
against annual targets
which support the strategic
direction of the Group.
Operation
Maximum opportunity
Performance measures
The maximum bonus opportunity for
an Executive Director will not exceed
125% of salary.
Awards are based on annual
performance against key
financial and/or strategic and
ESG targets.
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.
30% of any bonus payable
will be deferred into shares for
two years under the Topps Tiles
Plc 2023 Share Plan to be
approved by Shareholders in
January 2023.
Dividend equivalents may be
paid in respect of a vested
deferred bonus award by
reference to the value of
dividends payable during the
award’s vesting period.
Malus and clawback provisions
apply.
Targets are set annually
reflecting the Company’s
Strategy and are aligned with
key performance indicators.
Up to 70% of the maximum
bonus will be based on
financial objectives, which
may include, but are not
limited to, profit, cash/debt,
revenue, ROCE. The balance
will be assessed against
non-financial objectives which
may include, but are not
limited to, strategic, personal
and ESG metrics which are
aligned with the Company’s
business and ESG strategies.
FINANCIAL METRICS
0% of the maximum bonus
will be payable at threshold
performance and all the
maximum potential will
be payable for maximum
performance, with linear
vesting in between.
NON-FINANCIAL METRICS
Vesting of the awards based
on non-financial objectives
will be determined by the
Committee’s assessment
of the extent to which the
non-financial targets have
been met which may, if
appropriate, be based on
threshold, target and stretch
levels of performance with
scaled vesting in between.
OUR GOVERNANCE 98
DIRECTORS’ REMUNERATION REPORT
Purpose and
link to strategy
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.
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.
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 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.
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.
Long-term incentive awards are
granted under the Topps Tiles Plc
2023 Share Plan scheme rules,
to be approved by Shareholders
in January 2023.
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).
A two-year post-vesting holding
period will apply to shares
awarded, which will require
Executives to ordinarily retain any
shares vesting (net of tax) until the
fifth anniversary of grant.
Malus and clawback provisions
apply.
IN-EMPLOYMENT AND POST-EMPLOYMENT 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.
For awards granted on or after 2 October 2022, the Executive Directors will be subject to a two-year post-employment shareholding
requirement of 200% of salary (or the actual holding on departure, if lower).
LEGACY INCENTIVE PLANS
The Executive Directors retain existing, in flight LTIP awards granted under the previous Remuneration Policy, the “2020 awards”
and the “2021 awards”. These awards are subject to performance conditions based on a three-year performance period to FY23
and FY24 respectively. The awards will be allowed to vest on the terms on which they were granted, subject to achievement of the
applicable performance targets.
TOPPS TILES PLC ANNUAL REPORT AND ACCOUNTS FOR THE 52-WEEK PERIOD ENDED 1 OCTOBER 2022 99
COMMITTEE DISCRETION IN OPERATION
OF THE ANNUAL BONUS AND 2023 SHARE PLAN
The Committee operates under the powers it has been delegated
by the Board. In addition, it complies with rules that are either
subject to Shareholder approval or approval from the Board.
These rules provide the Committee with certain discretions which
serve to ensure that the implementation of the Policy is fair, both
to the individual Executive Director and to Shareholders. The
Committee also has discretion to set components of remuneration
within a range, from time to time. The extent of such discretion is
set out in the relevant rules. To ensure the efficient administration
of the annual bonus and LTIP, the Committee will apply certain
operational discretions. These include, but are not limited to, the
following:
• Selecting the participants in the plans;
• Determining the timing of grants of awards and/or
payments;
• Determining the quantum of awards and/or payments
(within the limits set out in the Policy);
• Determining the choice of (and adjustment of) performance
measures and targets for each incentive plan in accordance
with the Policy and the rules;
• Determining the extent of vesting based on the assessment
of performance and discretion relating to measurement of
performance in certain events such as a change of control
or reconstruction;
• Overriding formulaic annual bonus and LTIP vesting
outcomes, taking account of overall or underlying
Company performance;
• Whether malus and clawback shall be applied to any
award in the relevant circumstances and, if so, the extent
to which they shall be applied;
• Making appropriate adjustments required in certain
circumstances, for instance for changes in capital structure;
• Determining “good leaver” status for incentive plan purposes
and applying the appropriate treatment; and
• Undertaking the annual review of weighting of performance
measures and setting targets for the annual bonus and LTIP
award, where applicable, from year to year.
MALUS AND CLAWBACK PROVISIONS OF
ANNUAL BONUS AND LTIP AWARDS
The Committee has the right to reduce, cancel or impose further
conditions on annual bonus awards in respect of the financial
year starting on or after 1 October 2022 and any outstanding
LTIP awards, or to claw back amounts from participants within a
period of two years following the payment of any annual bonus
and vesting of any deferred bonus and LTIP awards, 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 Company’s financial
results, or if there has been a material failure of risk management
by the Company. In respect of LTIP awards granted from the date
of the AGM in January 2020 onwards, malus and clawback may
also apply in instances of corporate failure, discovery of serious
misconduct and/or error of calculation. For annual bonus and LTIP
awards granted on or after 2 October 2022, malus and clawback
may also apply in instances of unreasonable failure to protect the
interests of employees and customers.
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 non-
financial objectives as determined by the Committee. Bonuses
are currently based on adjusted profit before tax, strategic
objectives and ESG targets, which are aligned to delivering
the overall business strategy and encourage behaviours, which
facilitate profitable growth and the future development of the
business.
Long-term performance measures are chosen by the Committee
to provide a robust and transparent basis on which to measure
the Company’s performance over the longer term and to provide
alignment with the business strategy. They are selected to be
aligned with the interests of Shareholders and to drive business
performance while not encouraging excessive risk-taking. LTIP
awards are currently based on the earnings per share targets
being met at the end of the performance period, 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 deferred
bonus and 2013 and 2023 LTIP scheme.
OUR GOVERNANCE 100
DIRECTORS’ REMUNERATION REPORT
ILLUSTRATIONS OF APPLICATION OF REMUNERATION POLICY FOR FY23
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1,400
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1,000
800
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400
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£1,323k
31%
32%
37%
£1,533k
41%
27%
32%
£903k
23%
23%
54%
£483k
100%
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1,300
1,100
900
700
500
300
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£268k
100%
£766k
£886k
£508k
23%
24%
53%
31%
32%
37%
41%
27%
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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 2022),
benefits as disclosed in the
single figure table on page
106 for the year FY22 and
pension of 5% of salary.
Maximum performance
plus share price growth
No bonus.
62.5% of salary awarded for
achieving target performance
across both financial and non-
financial measures.
125% of salary awarded
for achieving maximum
performance across both
financial and non-financial
measures.
125% of salary awarded
for achieving maximum
performance across both
financial and non-financial
measures. (A share-based
bonus would be worth more if
share price growth occurred).
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.
TOPPS TILES PLC ANNUAL REPORT AND ACCOUNTS FOR THE 52-WEEK PERIOD ENDED 1 OCTOBER 2022
101
NON-EXECUTIVE DIRECTORS
Purpose and link to Strategy
Approach of the Company
Set at a level that reflects market
conditions and is sufficient to attract
individuals with appropriate knowledge
and experience
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.
For new Executive Director hires, the Committee has the
flexibility to set the salary at a below-market level initially and
to realign it over the following years as the individual gains
experience in the role. In exceptional circumstances, the
Committee may agree to pay above-market levels to secure
or retain an individual who is considered by the Committee
to possess significant and relevant experience which is
critical to the delivery of the Group’s Strategy.
• 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 colleagues (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.
The Committee may also alter the performance measures,
performance period and vesting period of the annual bonus
and deferred 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 325% of
salary.
OUR GOVERNANCE
102
DIRECTORS’ REMUNERATION REPORT
The Committee may make payments or awards in respect of
appointing an Executive Director 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.
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 no more than a12-
month notice period. Under an event of contract termination, any
severance payment would be subject to negotiation but would
take into account the 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
of six months’ notice.
These contracts are available for inspection, upon request from
the Company Secretary at the Group’s registered office.
In accordance with the Corporate Governance Code 2018, all
Directors offer themselves for annual re-election by Shareholders.
The date of appointment of each Non-Executive Director who
served during the year is set out in the table below.
Non-Executive Director
Darren Shapland
Keith Down
Diana Breeze
Kari Daniels
Original date of appointment
to Board
Date of letter of appointment
Total length of service
19/03/2015
02/02/2015
01/02/2021
01/04/2021
26/02/2015
02/02/2015
23/11/2020
23/11/2020
7 years and 8 months
7 years and 9 months
1 year and 9 months
1 year and 7 months
TOPPS TILES PLC ANNUAL REPORT AND ACCOUNTS FOR THE 52-WEEK PERIOD ENDED 1 OCTOBER 2022 103
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
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.
If the participant is terminated within six months of a Change of Control, the Payment in Lieu, (as de-fined in
the Service Agreement) shall include any bonus or commission payments, contractual benefits and holiday
entitlement they would have received during the period for which the Payment in Lieu is made.
“Bad leaver”
“Good leaver”
Annual bonus
Annual bonus awards will normally lapse in their
entirety in the event an individual is no longer
employed or serving their notice period at the time
of pay-out.
Unvested deferred bonus awards held by leavers will
ordinarily be forfeited on cessation of employment.
If the participant leaves due to death, illness, injury,
disability, redundancy, sale of their employer or
other reasons at the discretion of the Committee,
a bonus may become payable at the discretion of
the Committee. Where the bonus is payable, the
Committee retains discretion as to whether it is pro-
rated by reference to the period worked during the
year or whether all is payable in cash or whether part
of it is deferred either in cash or as deferred bonus
awards.
Deferred bonus awards held by leavers will ordinarily
vest on the normal timetable. The Committee can permit
early vesting at its discretion.
Shares acquired under deferred bonus awards will
ordinarily continue to be subject to the post-employment
shareholding requirement, unless the Committee
determines otherwise at its discretion.
OUR GOVERNANCE 104
DIRECTORS’ REMUNERATION REPORT
LTIP
Policy
“Bad leaver”
Unvested LTIP awards held by leavers will ordinarily
be forfeited on cessation of employment.
“Good leaver”
If the participant leaves due to death, illness, injury,
disability, redundancy, sale of their employer or any
other reason at the discretion of the Committee, any
unvested awards will ordinarily continue to be capable
of vesting at the normal vesting date (or, exceptionally
and at the Committee’s discretion, at an earlier date).
In either case, the extent of vesting will be determined
by the Committee taking into account the extent to
which the performance condition is satisfied and,
unless the Committee determines otherwise, subject to
pro-rating 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 pro-rating 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
and the post-employment shareholding requirement
for awards granted on or after 2 October 2022 will
ordinarily continue to apply irrespective of employment
status unless the Committee determines otherwise at its
discretion.
Awards that have already vested at the date of
cessation may be exercised for such period as the
Committee determines.
Mitigation
All employee
share plans
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.
Post-cessation
shareholding
requirements
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.
Deferred bonus and LTIP awards granted on or after 2 October 2022 will be subject to a two-year post-
cessation shareholding requirement of 200% of salary (or the actual level of holding on departure, if lower).
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 the post-cessation shareholding requirement.
TOPPS TILES PLC ANNUAL REPORT AND ACCOUNTS FOR THE 52-WEEK PERIOD ENDED 1 OCTOBER 2022 105
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 deferred bonus and LTIP awards
will vest on a change of control or other corporate events will be
determined in accordance with the rules of the deferred bonus
and LTIP scheme.
Deferred bonus and LTIP awards will normally vest early on
a takeover, merger, winding-up or other relevant corporate
event. The Committee will determine the level of vesting of LTIP
awards 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 by reference
to 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 deferred bonus
and 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
deferred bonus and 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, either
in cash or in part cash part deferred shares at the Committee’s
discretion.
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
COLLEAGUES 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 colleagues.
When determining the remuneration arrangements for Executive
Directors, the Committee takes into consideration, as a matter
of course, the pay and conditions of colleagues throughout the
Group. In particular, the Committee is kept informed on:
• salary increase for the general colleague 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 colleagues collectively,
as teams and one-to-one, which provide a forum for colleagues
to express their views on the Company’s executive and wider
employee reward policies.
EXTERNAL APPOINTMENTS
The Committee recognises that Executive Directors may be
invited to become non-executive directors in other companies
and that these appointments can enhance their knowledge and
experience to the benefit of the Company. Subject to the pre-
agreed conditions, and with the prior approval of the Board,
each Executive Director is permitted to accept one appointment
as a non-executive director in another listed company. The
Executive Director is permitted to retain any fees paid for such
service.
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 2023, the Committee
engaged with major Shareholders and institutional bodies setting
out the proposals and rationale for the changes.
OUR GOVERNANCE 106
DIRECTORS’ REMUNERATION REPORT
ANNUAL REPORT ON REMUNERATION
SINGLE FIGURE TABLE (AUDITED INFORMATION)
The tables below detail the total remuneration receivable by each Director for the 52-week period ended 1 October 2022.
2021/22
Salary
and fees
£’000
Taxable
Benefits
£’000
Annual
bonus
£’000
LTIP
£’000
Pension
£’000
Other
£,000
Executive Directors
R Parker, CEO
S Hopson, CFO
Non-Executive Directors
412
220
D Shapland
K Down
D Breeze
K Daniels
133
50
47
44
42
16
1.5
–
–
0.5
198
106
–
–
–
–
64
0
–
–
–
–
18
10
–
–
–
–
2
0
–
–
–
–
2020/21
Salary
and fees
£’000
Taxable
Benefits
£’000
Annual
bonus
£’000
LTIP
£’000
Pension
£’000
Other
£,000
Executive Directors
R Parker, CEO
S Hopson, CFO
Non-Executive Directors
408
187
D Shapland
K Down
D Breeze from
1 February 2021
K Daniels from
1 April 2021
A King to
20 January 2021
C Tiney to
16 June 2021
132
49
30
22
15
34
31
15
1.5
–
–
–
–
–
220
107
–
–
–
–
–
–
–
–
–
–
–
–
–
–
23
9
–
–
–
–
–
–
1
4
–
–
–
–
–
–
Total
remun-
eration
£’000
736
352
134.5
50
47
44.5
Total
remun-
eration
£’000
683
322
Total
fixed
remun-
eration
£’000
474
246
134.5
50
47
44.5
Total
fixed
remun-
eration
£’000
463
215
133.5
49
133.5
49
30
22
15
34
30
22
15
34
Total
variable
remun-
eration
£’000
262
106
–
–
–
–
Total
variable
remun-
eration
£’000
220
107
–
–
–
–
–
–
The figures in the single figure tables above are derived from the following:
Salary and fees
Benefits
Pension
Annual bonus
LTIP
Other
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 and fuel allowance. 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 108.
The LTIP figure for the period FY22 represents the award granted in December 2019. The performance condition
for the award was based on cumulative adjusted EPS performance over three financial years to 1 October
2022. A description of performance and outcome for the relevant period is provided on page 108.
This includes the value of SAYE scheme options granted during the relevant period.
TOPPS TILES PLC ANNUAL REPORT AND ACCOUNTS FOR THE 52-WEEK PERIOD ENDED 1 OCTOBER 2022 107
CHIEF EXECUTIVE PAY RATIO
The tables below compare the single total figure of remuneration for the Chief Executive with that of the Company’s colleagues who
are paid at the 25th percentile (lower quartile), 50th percentile (median) and 75th percentile (upper quartile) of its UK colleague
population, giving the ratios and underlying remuneration levels at those percentiles that were used to calculate the ratios.
Year
FY22
FY21
FY20
Method
Option A
Option A
Option A
Salary
Total remuneration
25th percentile pay ratio
Median pay ratio 75th percentile pay ratio
36:1
36:1
23:1
25th percentile
£18,268
£20,525
31:1
32:1
21:1
Median
£19,174
£23,694
23:1
23:1
16:1
75th percentile
£24,863
£31,582
The remuneration figures used for the colleague at each quartile were determined using reference data on the 1 October 2022 for
FY22. The Company chose Option A as this provides the most accurate method for calculating the CEO pay ratio. The ratios have
remained largely unchanged this year, despite the vesting of the 2019 LTIP for the CEO, which reflects our restrained approach
to Executive remuneration and is consistent with our pay, reward and progression policies for employees which relate pay levels
to performance and market benchmarks. While none of the three employees identified at the 25th, 50th and 75th percentiles are
eligible to receive LTIP awards, all three received a bonus within the year and are invited to participate in the all-employee share
plans on the same terms as the CEO.
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. This year the business took the approach to ensure a
greater percentage increase for the lower paid colleagues and a lower percentage increase for the CEO. Accordingly, the CEO’s
salary moved to £420,240. For the CFO, the benchmarking exercise carried out in FY21 determined that his salary was below the
benchmark for similar-sized companies, and it was agreed to approve a phased increase across FY22 and FY23. The Committee
approved the second stage of this increase to Stephen’s base salary to £240,000 from 1 October 2022. This increase will align his
salary to the external benchmark and reward continued strong performance, strategic contribution, and delivery in role.
R Parker – CEO
S Hopson – CFO
Base salary year ended
1 October 2021
Base salary year ended
1 October 2022
£412,000
£220,000
£420,240
£240,000
% increase
2
9
In line with the CEO, the Non-Executive Directors also received a fee increase of 2% effective from 1 October 2021; however, this was
applied to the base fees and the Board Chair fee only.
Details of the current fee policy for the Non-Executive Directors are set out in the table below.
Chairman’s fee
Non-Executive Directors’ basic fee
Additional fees
Senior Independent Director
Employee Engagement Director
Committee Chair
Fees year ended
1 October
2021
Fees year ended
1 October
2022
£133,132
£41,200
£135,795
£42,024
£3,000
£3,000
£6,000
£3,000
£3,000
£6,000
% increase
2
2
–
–
–
Note: the Chairman waived the Committee Chair’s fee for the Nomination and Governance Committee.
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).
OUR GOVERNANCE
108
DIRECTORS’ REMUNERATION REPORT
ANNUAL BONUS (AUDITED INFORMATION)
For the Period, the maximum annual bonus opportunity was 100% of salary. To encourage behaviours which facilitate profitable
growth and future development of the 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 strategic business objectives to drive the delivery of the strategic plan.
The following table sets out the performance outcome relative to targets and the resulting bonus pay-out to the Executive Directors
for FY22:
Targets
Weighting
Threshold (at
which 12.5%
of maximum
bonus is
earned)
Target (at
which 50%
of maximum
bonus is
earned)
Stretch
(at which
100% of
maximum
bonus is
earned)
Actual
Performance
Executive Director
bonus earned
as a percentage
of salary
Adjusted profit before tax
Strategic objectives:
Group market share (%)
Commercial sales (£m)
Retail coverings meterage (m2)
Retail digital visitor share (%)
Total bonus earned
80%
20%
5%
5%
5%
5%
100%
£12m
£16m
£19m
£15.6m
17.5%
9.5
4.90
30%
18.0%
10.9
5.00
32%
18.5%
12.2
5.10
34%
19%
10.9
4.7
31.81%
37.3%
10.8%
5%
3%
–
2.8%
48.1%
Adjusted PBT as defined in the Financial Review section of this report.
The bonuses were paid in cash in November 2022.
LONG-TERM INCENTIVES (AUDITED INFORMATION)
AWARDS VESTING IN RESPECT OF THE FINANCIAL YEAR
The LTIP awards granted in December 2019 were based on cumulative adjusted EPS targets over the three financial years to
30 September 2022. The performance targets for the awards were as follows:
Cumulative adjusted EPS for the period 2019/20 to 2021/22
Percentage of the award that will vest
19.9 pence
Greater than 19.9 pence but less than 22.3 pence
22.3 pence
25%
Determined on a straight-line basis between 25% and 100%
100%
By addressing the impact of Covid on Group trading the cumulative adjusted EPS is 20.2; whilst this is above the minimum vesting
of 25% in line with the Policy in force at the time of the grant of the 2019 award the Committee exercised its discretion in rounding
down to the 25% vesting threshold for the award to the CEO.
AWARDS GRANTED DURING THE FINANCIAL YEAR (AUDITED INFORMATION)
For the 52-week period ended 1 October 2022, the following awards were granted to Executive Directors in May 2022.
R Parker
S Hopson
Type of award
Nil-cost option
Nil-cost option
Percentage of
salary
100%
100%
Number of
shares
675,041
360,459
Face value
at grant1
£412,000
£220,000
1 Valued using a share price of 0.61 pence based on the average three-day share price ending on 6 October 2021.
% of award
vesting at
threshold
10%
10%
Performance
period
3 years
3 years
TOPPS TILES PLC ANNUAL REPORT AND ACCOUNTS FOR THE 52-WEEK PERIOD ENDED 1 OCTOBER 2022 109
The vesting of these awards will be based on adjusted EPS for the financial year FY24 (adjusted EPS 2024):
Adjusted EPS 2024
4.38 pence
Greater than 4.38 pence but less than 7.85 pence
7.85 pence
Percentage of the award that will vest
10%
Determined between 10% and 100%
100%
These targets were based on adjusted profit before tax of between £12.0 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.
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 EMPLOYEES 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 colleagues.
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 1 October 2022:
R Parker
S Hopson
Type of award1
Number of shares
Face value at grant2
3yr Discounted share option
3yr Discounted share option
20,156
0
£12.577
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 2021/2022, the share price at the date of invitation was 65.81 pence and the exercise price is 56.25 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 62.40 pence for
these options granted on1st February 2022).
OUR GOVERNANCE 110
DIRECTORS’ REMUNERATION REPORT
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% of salary. The table below sets out the number of shares held
or potentially held (including by connected persons where relevant) as of 1 October 2022:
The interests of each Executive Director of the Company as of 1 October 2022 were as follows:
Shares
Options
Shares
owned
as at
2 Oct 2021
Total shares
owned
as at
1 Oct 2022
Directors
Executive Directors
R Parker
S Hopson
552,893
n/a
n/a
–
n/a
n/a
Non-Executive Directors
D Shapland
K Down
D Breeze
K Daniels
200,000
n/a
n/a
n/a
736,264
n/a
n/a
–
n/a
n/a
200,000
n/a
n/a
n/a
Type
LTIP
SAYE
LTIP
SAYE
Options
exercised
during the
year
Vested
options
Unvested
options,
subject to
perfor-
mance
conditions
Unvested
options,
not subject
to perfor-
mance
conditions
Total options
as at
1 Oct 2022
183,371
n/a
584,834 1,502,342
n/a
n/a
n/a 2,087,176
34,257
34,257
–
n/a
n/a
n/a
n/a
n/a
–
n/a
n/a
n/a
n/a
n/a
774,109
n/a
n/a
38,880
774,109
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.
No changes in the Directors’ shareholdings have occurred between 1 October 2022 and the date of this report.
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.
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 1 October 2022. 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 FY22 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, given the nature of the index and the companies within it.
400
350
300
250
200
150
100
50
0
2012
2013
2014
2015
2016
2017
2018
2019
2020
2021
2022
Topps TIles
FTSE Small Cap
TOPPS TILES PLC ANNUAL REPORT AND ACCOUNTS FOR THE 52-WEEK PERIOD ENDED 1 OCTOBER 2022 111
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.
52-week period ended 1 October 2022
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
Total remuneration
£’000
Annual bonus as
a % of maximum
opportunity
LTIP as a %
of maximum
opportunity
736
673
403
541
538
765
1,180
2,027
849
564
48%
55%
0%
16%
14%
9%
67%
83%
99%
46.3%
25%
0%
0%
0%
0%
86.7%
100%
100%
n/a
n/a
DIRECTORS’ PAY ANNUAL CHANGE IN RELATION TO ALL COLLEAGUES
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 colleagues in the Group.
ANNUAL PAY CHANGE IN RELATION TO ALL EMPLOYEES
Percentage change
Salary
Taxable
benefits
Annual
bonus
Salary
Taxable
benefits
Annual
bonus
Salary
Taxable
benefits
Annual
bonus
FY22 vs FY21
FY21 vs FY20
FY20 vs FY19
Executive Directors
R Parker
S Hopson
Non-Executive Directors
D Shapland
K Down
D Breeze
K Daniels
Wider workforce
1% 35.5%
17.6%
6.7%
-10%
-1%
14.3%
n/a
0.7%
-33%
2%
56.7%
100%
–
–
–
n/a
n/a
n/a
n/a
7.2% 15.6%
-3.5%
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
31.6%
n/a
-11.2%
n/a
-100%
n/a
n/a
n/a
n/a
n/a
89.1%
-5.6%
-4.6%
n/a
n/a
-4.9%
-66.7%
-100%
n/a
n/a
12.8%
n/a
n/a
n/a
n/a
-24.4%
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
52-week period ended
1 October 2022
3.6 pence per share
£57,097,000
53-week period ended
2 October 2021
3.1 pence per share
£57,955,000
Percentage change
16.13%
-1.48%
Note: the increase spend on pay reflects a resumption of bonus payments and National Living Wage increases.
OUR GOVERNANCE 112
DIRECTORS’ REMUNERATION REPORT
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.
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 colleague benefits structures throughout the Company or Group.
ADVISERS
The Committee is assisted in its work by the CEO and CFO and the HRD. (The CEO is consulted on the remuneration of those who
report directly to him and of other senior management. No Executive Director or colleague is present or takes part in discussions in
respect of matters relating directly to their own remuneration).
The executive compensation business of Alvarez & Marsal (“A&M”) has acted as an independent adviser since August 2020.
Adviser
Details of appointment
Fees paid by the Company for advice to
the Committee and basis of charge
Other services provided to the
Company in the 52-week period
ended 1 October 2022
Alvarez & Marsal Appointed by the Committee
£48,648 (excluding VAT)
None
in August 2020
Charged on a time/cost basis or fixed fee
dependent on the nature of the project.
A&M is a signatory to the Remuneration Consultant’s Code of Conduct, which requires their advice to be impartial, and A&M
confirmed their compliance with the Code to the Committee. A&M has not carried out any other work for the Company during the
year. Based on the above, the Committee is satisfied that the advice is independent and objective.
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 19 January 2022:
Resolution
Votes for
% of vote Votes against
% of vote
Discretion
% of vote
Votes
withheld
Approve Remuneration
Report
149,124,453
99.32%
1,015,636
0.68%
0.0
0.0
43,138
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
Votes for
% of vote Votes against
% of vote
Discretion
% of vote
Votes
withheld
Approve Directors’
Remuneration Policy
131,671,974
98.64%
1,716,113
1.29%
87,329
0.07%
43,952
TOPPS TILES PLC ANNUAL REPORT AND ACCOUNTS FOR THE 52-WEEK PERIOD ENDED 1 OCTOBER 2022 113
IMPLEMENTATION OF THE DIRECTORS’ REMUNERATION POLICY IN FY2022/23
SALARY
For FY23, the CEO received a 2% increase effective from 1 October 2022 which was below that of the wider workforce. For the
CFO, the Committee approved the second phase of the increase in Stephen’s base salary to £240,000 from 1 October 2022 to
bring his salary in line with the benchmark and to reflect the continued strong performance and delivery in role.
PENSION
The Company pension benefit will be 5% of salary for the Executive Directors (taken as cash in lieu of contributions to the pension
plan in the case of the CEO), which is aligned with the rate available to the wider workforce.
ANNUAL BONUS
The maximum annual bonus opportunity for FY23 will be 125% of base salary for the Executive Directors. Up to 70% of total bonus
will be payable by reference to adjusted PBT. 15% will be measured against strategic objectives and the remaining 15% will be
measured against ESG targets.
The Committee considers that the forward-looking targets are commercially sensitive and has, therefore, chosen not to disclose them
in advance. Details of the targets will be set out retrospectively in next year’s Remuneration Report.
LTIP
For FY23, the Committee intends to make LTIP awards of up to 100% of salary to the CEO and CFO with a three-year performance
period ending FY25. The vesting of the awards will be subject to adjusted EPS performance for the financial year FY25 with the
awards vesting for threshold performance set at 10% of salary and an Adjusted EPS of 3.46 pence and the awards vesting for
maximum performance at 100% of salary and an EPS of 6.92%.
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.
NON-EXECUTIVE DIRECTOR FEES
The Non-Executive Directors’ fees are 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 2% was applicable from 1 October
2022; however, this was applied to the base fees only.
APPROVAL
This report was approved by the Board on 30 November 2022 and signed on its behalf by:
Diana Breeze
Chair of the Remuneration Committee
30 November 2022
OUR GOVERNANCE 03 OUR
FINANCIALS
CONTENTS
Group Financial Statements
Independent Auditor’s Report
116
Consolidated Statement of Profit or Loss
Consolidated Statement of Comprehensive Income 124
125
Consolidated Statement of Financial Position
124
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
126
127
128
160
161
162
Pictured: Enis Ivory, Rhomba Mora and Matrix® Spring Mint Gloss
116
INDEPENDENT AUDITOR’S REPORT
TO THE MEMBERS OF TOPPS TILES PLC
REPORT ON THE AUDIT OF THE FINANCIAL STATEMENTS
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 1 October 2022 and of the Group’s profit and the Group’s cash
flows for the 52 week period then ended;
•
•
the Group financial statements have been properly prepared in accordance with UK-adopted international accounting standards;
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:
the Consolidated Statement of Financial Position as at 1 October 2022; the Consolidated Statement of Profit and Loss, Consolidated
statement of Comprehensive Income, Consolidated Statement of Changes in Equity, Consolidated Cash Flow Statement, the
Company Balance Sheet and the 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.
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.
OUR AUDIT APPROACH
OVERVIEW
AUDIT SCOPE
• We conducted a full scope audit over Topps Tiles (UK) Limited (the main trading entity within the Group) and Topps Tiles Plc.
Testing was also performed, to Group materiality, over the balances which arise on consolidation (Goodwill and acquired
intangibles) or are centrally managed (IFRS right of use assets and leases);
• Where other entities within the Group contributed more than 5% of the total financial statement line item, and the balance was
above overall Group materiality, these balances were also included within the scope of our audit;
• All audit testing has been performed by a single UK Group Engagement Team; and
• Our scoping resulted in coverage of 95% (2021: 96%) of revenue, and 95% (2021: 96%) of total assets
KEY AUDIT MATTERS
•
Inventory carrying value (Group)
• Lease accounting (Group)
• Recoverability of amounts owed by and investments in subsidiary undertakings (Company)
MATERIALITY
• Overall Group materiality: £550,000 (2021: £685,000) based on 5% of profit before taxation.
• Overall Company materiality: £700,000 (2021: £620,000) based on 1% of Total assets.
• Performance materiality: £412,500 (2021: £510,000) (Group) and £525,000 (2021: £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.
TOPPS TILES PLC ANNUAL REPORT AND ACCOUNTS FOR THE 52-WEEK PERIOD ENDED 1 OCTOBER 2022 117
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.
The key audit matters below are consistent with last year.
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 and the Critical Accounting
Judgements and Key Sources of Estimation Uncertainty within the
Group Accounting Policies. The valuation of inventory involves
estimates in recording provisions for obsolete inventory. The
significant judgements and assumptions applied when calculating
the provisions are:
• slow moving stock, i.e., stock which has not been sold within
the last 13 months; and
• specific provisions recognised for stock classified as ‘to be
discontinued’ i.e., stock which is expected to be discontinued
in future periods and therefore require an estimate of
expected inventory write downs and realisable amounts.
More specifically, the key audit matter relates to whether the
provisions held against the above identified inventories are
complete and therefore that inventory is valued appropriately
at the lower of cost and expected sale proceeds.
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 period end;
We reviewed the past accuracy of managements estimates and
identified no material concerns regarding the accuracy of the
prior period estimates;
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 managements on the appropriateness of the provision
levels and the use of historic trends given the current economic
environment. As a result of our challenge further disclosures were
made in relation to this area of managements estimate;
We performed testing over post period end inventory sales to
validate the sales were made at above cost (or where at a loss
this was reflected correctly in the provision held); and
We reviewed the disclosures of this estimate made by management
and challenged the level of disclosures around the key estimates.
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.
LEASE ACCOUNTING (GROUP)
Refer to matters considered by the Audit Committee within the
Corporate Governance Report and the Critical Accounting
Judgements and Key Sources of Estimation Uncertainty within the
Group Accounting Policies on pages.
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;
The Group adopted IFRS 16 from 29 September 2019 utilising
the modified retrospective approach. The process of integrating
IFRS 16 numbers, managed through a separate IT system, to the
trial balance relies upon a significant amount of manual review
and reconciliation. As a result, in the prior period audit, we
identified a few errors which were corrected by management.
Due to the magnitude of the balance and the manual nature of
the review we have included this as a Key Audit Matter. This
specifically relates to the Accuracy of the reported lease liabilities
and assets and the completeness of the leases subject to IFRS 16.
We have reviewed the accuracy of the underlying data by
tracing a sample of leases back to underlying lease agreements
and 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;
We reviewed the disclosures in the financial statements; and
We are satisfied that they are consistent with the evidence
obtained and compliant with IFRS 16.
Overall, we concluded that the key estimates and judgements
used by management (being discount rate, determination of lease
term and the determination of a lease being in or out of scope
for IFRS 16) for lease liabilities and right of use assets were
supportable and no material exceptions were noted in our audit.
OUR FINANCIALS
118
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
RECOVERABILITY OF AMOUNTS OWED BY AND INVESTMENTS IN SUBSIDIARY UNDERTAKINGS (COMPANY)
Refer to pages 166 and 167 – Note 4 Investments and
Note 5 Debtors to the company financial statements.
Investments and amounts due from subsidiary companies
are tested for impairment if impairment indicators exist. The
main assets of the Company relate to the investments and
receivables due from subsidiary companies.
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
period end and by comparing the performance of the Group in
the period to previous budgets and agreed that no impairment
trigger was noted. 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.
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 consists of fifteen legal entities within, comprising the Group’s operating business and centralised business functions. This is
structured as one segment being the distribution and sale of Tiles, predominantly in the UK.
In establishing the overall approach to the Group audit, we identified one legal entity, Topps Tiles (UK) Limited, which, being the main
trading legal entity in the Group, required an audit of its complete financial information due to its financial significance to the Group.
In addition, Topps Tiles Plc was included as a full scope component as it had the majority of the Group-wide balances. Testing was
performed over the items which arise on consolidation (Goodwill and Intangibles) or were managed centrally (IFRS 16) to Group
materiality.
Further specific audit procedures were performed where a single balance (or disclosure) within one of the fourteen out of scope
entities represented 5% of the consolidated Group amount and the balance was above Group materiality.
We also considered the reporting of the impact of climate change on the Group, where appropriate (for example on the
determination of useful economic lives of assets or consideration of climate change within future cash flow forecasts for asset
impairments).
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 above work resulted in coverage of 95% of reported revenues (2021:96%) and 95% of total assets (2021:96%) being obtained
during our audit.
TOPPS TILES PLC ANNUAL REPORT AND ACCOUNTS FOR THE 52-WEEK PERIOD ENDED 1 OCTOBER 2022 119
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:
Overall
materiality
How we
determined it
Rationale for
benchmark
applied
Financial statements – Group
Financial statements – Company
£550,000 (2021: £685,000).
£700,000 (2021: £620,000).
5% of profit before taxation
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
are the primary measure used by the shareholders in assessing
the performance of the entity and is a generally accepted
auditing benchmark. Materiality was capped at the component
materiality level of £350,000.
For each component in the scope of our Group audit, we allocated a materiality that is less than our overall Group materiality. The
range of materiality allocated across components was between £450,000 and £350,000.
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% (2021: 75%) of overall materiality, amounting to £412,500 (2021: £510,000)
for the Group financial statements and £525,000 (2021: £465,000) for the Company financial statements.
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 £25,000 (Group
audit) (2021: £34,400) and £25,000 (Company audit) (2021: £34,400) as well as misstatements below those amounts that, in
our view, warranted reporting for qualitative reasons.
OUR FINANCIALS
120
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 their “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 challenged management, in relation to the achievability of the forecast cash flows in the context of the current economic
uncertainty;
• 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 in the context of the required disclosures regarding
management’s assessment and the basis of their conclusions.
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.
TOPPS TILES PLC ANNUAL REPORT AND ACCOUNTS FOR THE 52-WEEK PERIOD ENDED 1 OCTOBER 2022 121
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, which includes reporting based on the Task Force on Climate-
related Financial Disclosures (TCFD) recommendations. 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 1 October 2022 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.
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.
OUR FINANCIALS 122
INDEPENDENT AUDITOR’S REPORT
TO THE MEMBERS OF TOPPS TILES PLC
REPORT ON THE AUDIT OF THE FINANCIAL STATEMENTS
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.
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 UK employment 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 UK tax legislation and 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 journal entries with unexpected account combinations, management bias in significant accounting estimates and/or
judgements and the misreporting of significant or unusual transactions. Audit procedures performed by the engagement team included:
• Discussions with management and those charged with governance, over consideration of known or suspected instances of non-
compliance with laws, regulations and fraud;
• Reviewing board minutes and discussions with the head of Internal Audit to ascertain the completeness of the above disclosures;
• Challenging assumptions and judgements made by management in their significant accounting estimates and judgements, in
particular in relation to inventory provisioning;
•
Identifying and testing higher risk journal entries, in particular any journal entries posted with unexpected account combinations
and those recorded to increase reported revenues. Testing was also performed to validate the completeness of the data on which
our risk-based procedures were performed; and
• Reviewing the financial statetments for adequate and appropriate disclosures in compliance with the Companies Act.
TOPPS TILES PLC ANNUAL REPORT AND ACCOUNTS FOR THE 52-WEEK PERIOD ENDED 1 OCTOBER 2022 123
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.
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 4 years, covering the years ended 28 September 2019 to 1 October 2022.
OTHER MATTER
In due course, as required by the Financial Conduct Authority Disclosure Guidance and Transparency Rule 4.1.14R, these financial
statements will form part of the ESEF-prepared annual financial report filed on the National Storage Mechanism of the Financial
Conduct Authority in accordance with the ESEF Regulatory Technical Standard (‘ESEF RTS’). This auditors’ report provides no
assurance over whether the annual financial report will be prepared using the single electronic format specified in the ESEF RTS.
Andrew Lyon (Senior Statutory Auditor)
for and on behalf of PricewaterhouseCoopers LLP
Chartered Accountants and Statutory Auditors
East Midlands
30 November 2022
OUR FINANCIALS 124
CONSOLIDATED STATEMENT OF PROFIT OR LOSS
FOR THE 52 WEEKS ENDED 1 OCTOBER 2022
Group revenue
Cost of sales
Gross profit
Distribution and selling costs
Other operating expenses
Administrative costs
Sales and marketing costs
Group operating profit
Finance income
Finance costs
Profit before taxation
Taxation
Profit for the period
Profit is attributable to:
Owners of Topps Tiles Plc
Non-controlling interests
All results relate to continuing operations of the Group.
1 See note 2(A) for an explanation of the prior year restatement.
Earnings per ordinary share:
– Basic
– Diluted
52 weeks
ended
1 October
2022
£’000
Notes
53 weeks
ended
2 October
2021
(restated)1
£’000
3
247,241
227,997
(111,818)
(97,297)
135,423
130,700
(89,316)
(5,953)
(83,591)
(6,100)
(19,827)
(18,419)
(5,495)
14,832
123
(4,010)
10,945
(1,754)
9,191
9,005
186
9,191
52 weeks
ended
1 October
2022
£’000
(4,564)
18,026
87
(4,158)
13,955
(3,279)
10,676
10,648
28
10,676
53 weeks
ended
2 October
2021
(restated)1
£’000
4.60p
4.55p
5.47p
5.41p
6
6
4
7
Notes
9
9
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
FOR THE 52 WEEKS ENDED 1 OCTOBER 2022
Profit for the period
Total comprehensive income for the period is attributable to:
Owners of Topps Tiles Plc
Non-controlling interests
1 See note 2(A) for an explanation of the prior year restatement.
52 weeks
ended
1 October
2022
£’000
9,191
9,005
186
9,191
53 weeks
ended
2 October
2021
(restated)1
£’000
10,676
10,648
28
10,676
TOPPS TILES PLC ANNUAL REPORT AND ACCOUNTS FOR THE 52-WEEK PERIOD ENDED 1 OCTOBER 2022
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
AS AT 1 OCTOBER 2022
125
Non-current assets
Goodwill
Intangible assets
Property, plant and equipment
Other financial assets
Deferred tax assets
Right-of-use assets
Current assets
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
1 See note 2(A) for an explanation of the prior year restatement.
The accompanying notes are an integral part of these financial statements.
Notes
10
11
12
14
15
14
16
14
17
18
19
20
14
22
2022
£’000
2,101
5,423
2021
(restated)1
£’000
–
468
20,888
23,680
1,947
114
2,335
564
88,545
95,418
119,018
122,465
38,605
32,758
542
6,419
16,241
61,807
518
4,538
27,789
65,603
180,825
188,068
–
(43,650)
(18,187)
(1,152)
(352)
(63,341)
(1,534)
–
(47,425)
(19,521)
(2,027)
(353)
(69,326)
(3,723)
14
22
(84,741)
(3,694)
(91,817)
(1,969)
(151,776)
(163,112)
29,049
24,956
23
24
25
6,556
2,636
(415)
(399)
5,162
20,359
(7,319)
26,580
2,469
29,049
6,555
2,625
(1,216)
(399)
4,642
20,359
(7,610)
24,956
–
24,956
The financial statements of Topps Tiles Plc, registered number 3213782, on pages 124 to 159 were approved by the Board of
Directors and authorised for issue on 30 November 2022. They were signed on its behalf by:
Rob Parker
Stephen Hopson
Directors
OUR FINANCIALS 126
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
FOR THE 52 WEEKS ENDED 1 OCTOBER 2022
Share
capital
£’000
Share
premium
£’000
Own
shares
£’000
Merger
reserve
£’000
Share-
based
payment
reserve
£’000
Capital
redemption
reserve
£’000
Accumu-
lated
losses
£’000
Non-
controlling
interest
£’000
Total
equity
£’000
6,548
2,492
(1,483)
(399)
3,965
20,359 (17,400)
(28) 14,054
–
–
–
–
–
–
(390)
–
(390)
6,548
2,492 (1,483)
(399) 3,965
20,359 (17,790)
(28) 13,664
–
7
–
–
–
–
–
133
–
–
–
–
–
–
267
–
–
–
–
–
–
–
–
–
–
–
–
677
–
–
–
–
–
–
–
–
10,648
28
10,676
–
(267)
–
(47)
(154)
–
–
–
–
–
140
–
677
(47)
(154)
6,555
2,625 (1,216)
(399) 4,642
20,359 (6,992)
– 25,574
–
–
–
–
–
–
(618)
–
(618)
6,555
2,625 (1,216)
(399) 4,642
20,359 (7,610)
– 24,956
–
–
1
–
–
–
–
–
–
11
–
–
–
–
–
–
–
(207)
1,008
–
–
–
–
–
–
–
–
–
–
–
–
–
–
520
–
–
–
–
–
–
–
–
9,005
(8,015)
–
–
(699)
–
–
186
9,191
–
–
–
–
–
(8,015)
12
(207)
309
520
2,283
2,283
6,556
2,636
(415)
(399) 5,162
20,359 (7,319)
2,469 29,049
Balance at 26 September
2020 as originally
presented
Correction of error
(net of tax)
Restated balance at
26 September 20201
Profit and total
comprehensive income for
the period (restated)1
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
as originally presented
Correction of error
(net of tax)
Restated balance at
2 October 20211
Profit and total
comprehensive income
for the period
Dividends
Issue of share capital
Own shares purchased
in the period
Own shares issued in the
period
Credit to equity for
equity-settled share-based
payments
Acquisition of non-controlling
interest on business
combination
Balance at 1 October
2022
1 See note 2(A) for an explanation of the prior year restatement.
TOPPS TILES PLC ANNUAL REPORT AND ACCOUNTS FOR THE 52-WEEK PERIOD ENDED 1 OCTOBER 2022 CONSOLIDATED CASH FLOW STATEMENT
FOR THE 52 WEEKS ENDED 1 OCTOBER 2022
Cash flow from operating activities
Profit for the period
Taxation
Finance costs
Finance income
Group operating profit
Adjustments for:
Depreciation of property, plant and equipment
Depreciation of right-of-use assets
Amortisation of intangible assets
Loss on disposal of property, plant, equipment and intangibles
(Gain)/loss on sublease
Impairment charge/(reversal) of property, plant and equipment
Impairment of right-of-use assets
Gain on lease disposal
Share option charge
Increase in earn out liability provision
Non-cash gain in derivative contracts
Decrease in trade and other receivables
Increase in inventories
Decrease in payables
Cash generated from operations
Interest paid
Interest received on operational cash balances
Interest element of lease liabilities paid
Taxation paid
Net cash generated 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 investment activities
Financing activities
Payment of capital element of lease liabilities
Dividends paid
Proceeds from issue of share capital
Purchase of own shares
Receipt on disposal of own shares
Repayment of bank loans
Net cash used in financing activities
Net decrease in cash and cash equivalents
Cash and cash equivalents at beginning of period
Cash and cash equivalents at end of period
1 See note 2(A) for an explanation of the prior year restatement.
127
53 weeks
ended
2 October
2021
(restated)1
£’000
10,676
3,279
4,158
(87)
18,026
6,268
20,508
186
1,736
134
(604)
2,402
(2,563)
677
–
7
(3,421)
(11,209)
32,147
(468)
–
(3,728)
(1,535)
52 weeks
ended
1 October
2022
£’000
9,191
1,754
4,010
(123)
14,832
5,609
18,212
500
394
(88)
240
1,473
(1,544)
520
1,581
(455)
(1,080)
(4,362)
(5,603)
30,229
(354)
58
(3,626)
(3,453)
22,854
26,416
–
65
493
(3,090)
(115)
183
(3,968)
(6,432)
(19,601)
(8,015)
12
(207)
309
(468)
(27,970)
(11,548)
27,789
16,241
11
76
629
(4,221)
(194)
2,096
(154)
(1,757)
(23,026)
–
133
–
–
(4,995)
(27,888)
(3,229)
31,018
27,789
OUR FINANCIALS 128
NOTES TO THE FINANCIAL STATEMENTS
FOR THE 52 WEEKS ENDED 1 OCTOBER 2022
1 GENERAL INFORMATION
Topps Tiles Plc is a public limited company, limited by shares, incorporated and domiciled in the United Kingdom and registered
in England under the Companies Act 2006. The address of the registered office is given on page 41. The nature of the Group’s
operations and its principal activity are set out in the Directors’ Report on page 52.
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, other than the IFRIC regarding cloud computing (see note 2A), 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. The Group is continuing to assess the impact of IFRS 17
“Insurance Contracts” and the implications on accounting for future transactions and arrangements. The impact is believed not to be
significant and the Group will update for any changes in this assessment in future reporting periods.
IFRS 17, “Insurance contracts” (effective 1 January 2023 or when IFRS 9 is applied) subject to endorsement.
Amendments to IFRS 16 Leases: Covid-19-Related rent concessions beyond 30 June 2021 – (effective 1 April 2021).
Amendments to IFRS 9, IAS 39, IFRS 7, IFRS 4 and IFRS 16 Interest Rate Benchmark Reform – Phase 2 (effective 1 January 2021).
Annual Improvements 2018–2020 (effective 1 January 2022).
Narrow scope amendments to IFRS 3, IAS 16 and IAS 37 (effective 1 January 2022).
2 ACCOUNTING POLICIES
The principal accounting policies adopted are set out below.
A) BASIS OF ACCOUNTING
The financial statements of Topps Tiles Plc have been prepared in accordance with UK-adopted International Accounting Standards
and with the requirements of the Companies Act 2006 as applicable to companies reporting under those standards. On
31 December 2020, IFRS as adopted by the European Union at that date was brought into UK law and became UK-adopted
international accounting standards, with future changes being subject to endorsement by the UK Endorsement Board.
Topps Tiles Plc transitioned to UK-adopted International Accounting Standards in its Consolidated Financial Statements on 3 October
2021. This change constitutes a change in accounting framework. However, there is no impact on recognition, measurement or
disclosure in the Period reported as a result of the change in framework.
The financial statements have been prepared on the historical cost basis, except for the revaluation of derivative financial instruments.
Historical cost is generally based on the fair value of the consideration given in exchange for goods and services.
The accounting policies set out below have, unless otherwise stated, been applied consistently to all periods presented in these
Group financial statements.
IFRIC: CONFIGURATION OR CUSTOMISATION COSTS IN A CLOUD COMPUTING ARRANGEMENT
(IAS 38 INTANGIBLE ASSETS)
During the current year, management has re-evaluated the impact of the IFRIC guidance released during the prior year relating to
accounting for cloud-based SaaS arrangements. This guidance was incorrectly applied in the prior year, resulting in costs associated
with a cloud-based SaaS being capitalised and not expensed as incurred in the consolidated statement of financial performance.
During 2020, £456k was capitalised with no amortisation being charged. During the prior period a further £319k was capitalised
again with no amortisation being charged. As a result of this error, the intangible assets as at 26 September 2020 were overstated
by £456k and operating costs for the period understated by the same amount. As at 2 October 2021, the intangible assets and net
assets were overstated by £775k and operating costs were understated by £319k for the period then ended. In addition, during the
period ended 26 September 2020 operating cash flows were overstated by £456k and investing cash flows overstated by the same
amount. Likewise, for the period ended 2 October 2021 the operating cash flows were overstated by £319k and the investing
cash flows overstated by the same amount. A summary of the impact, including taxation, is included in the following tables:
TOPPS TILES PLC ANNUAL REPORT AND ACCOUNTS FOR THE 52-WEEK PERIOD ENDED 1 OCTOBER 2022 2 ACCOUNTING POLICIES CONTINUED
Consolidated Statement of Profit or Loss impact
Administrative costs
Profit before taxation
Tax charge
Basic earnings per ordinary share (pence)
Diluted earnings per ordinary share (pence)
Consolidated Statement of Financial Position impact
Intangible assets
Deferred tax asset
Total assets
Net assets
Accumulated losses
Total equity
Consolidated Cash Flow Statements
Profit for the period
Taxation
Net cash from operating activities
Purchase of intangibles
Net cash used in investing activities
Consolidated Statement of Financial Position impact
Intangible assets
Deferred tax asset
Total assets
Net assets
Accumulated losses
Total equity
129
2021
(previously
reported)
£’000
(18,100)
14,274
(3,370)
5.59
5.52
1,243
407
188,686
25,574
(6,992)
25,574
10,904
3,370
26,735
(513)
(2,076)
2020
(previously
reported)
£’000
916
1,406
205,080
14,054
(17,400)
14,054
Restatement
£’000
2021
Restated
£’000
(319)
(319)
(18,419)
13,955
91
(3,279)
(0.12)
(0.11)
(775)
157
(618)
(618)
(618)
(618)
(228)
(91)
(319)
319
319
Restatement
£’000
(456)
66
(390)
(390)
(390)
(390)
5.47
5.41
468
564
188,068
24,956
(7,610)
24,956
10,676
3,279
26,416
(194)
(1,757)
2020
Restated
£’000
460
1,472
204,690
13,664
(17,790)
13,664
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 more pessimistic trading scenarios that are deemed severe but plausible. The two downside scenarios
modelled include a moderate decline in sales and a more severe decline in sales, which result in much lower sales and gross profit
than the base scenario, resulting in worse profit and cash outcomes. The more severe downside scenario modelled this year was
based on a prolonged period of macroeconomic stress in the UK, lasting for two years, with sales falling substantially in each year in
our main brand, Topps Tiles, as well as year on year declines in gross margins.
The Group has already taken a number of actions to strengthen its liquidity over the recent years, and the scenarios start from a position
of relative strength. 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 were reviewed against current lending facilities in both the base case and the
severe but plausible downside scenario. The current lending facility was refinanced in October 2022 and expires at the earliest in
October 2025. In all scenarios, the Board has 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 continues to adopt the going concern basis in preparing the financial statements.
OUR FINANCIALS 130
NOTES TO THE FINANCIAL STATEMENTS
FOR THE 52 WEEKS ENDED 1 OCTOBER 2022
2 ACCOUNTING POLICIES CONTINUED
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.
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 7 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 2022 mean “at 1 October 2022” or the
52 weeks then ended; references to 2021 mean “at 2 October 2021” or the 53 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.
TOPPS TILES PLC ANNUAL REPORT AND ACCOUNTS FOR THE 52-WEEK PERIOD ENDED 1 OCTOBER 2022 131
2 ACCOUNTING POLICIES CONTINUED
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.
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.
Brands acquired by the Group are stated at cost less amortisation and impairment losses, and are amortised over their useful
economic life. The Pro Tiler brand has an expected useful economic life of ten 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
over the period of the lease, up to 50 years on a straight-line basis
Fixtures and fittings
Plant and Machinery
Motor vehicles
Freehold land is not depreciated.
over 10 years, except for the following: four years for computer equipment or five years for
display stands, as appropriate
over 10 years on a straight line basis
25% per annum on a reducing basis
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.
OUR FINANCIALS 132
NOTES TO THE FINANCIAL STATEMENTS
FOR THE 52 WEEKS ENDED 1 OCTOBER 2022
2 ACCOUNTING POLICIES CONTINUED
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. This includes the impact, if any, arising from climate change.
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.
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.
TOPPS TILES PLC ANNUAL REPORT AND ACCOUNTS FOR THE 52-WEEK PERIOD ENDED 1 OCTOBER 2022 133
2 ACCOUNTING POLICIES CONTINUED
M) FOREIGN CURRENCY
The individual financial statements of each Group company are presented in pounds sterling (its functional currency). For the purpose
of the consolidated financial statements, the results and financial position of each Group company are expressed in pounds sterling,
which is the functional currency of the Company, and the presentational currency for the consolidated financial statements.
Transactions in currencies other than the entity’s functional currency (foreign currencies) are recorded at the rates of exchange
prevailing on the dates of transactions. At each period end, monetary assets and liabilities that are denominated in foreign currencies
are retranslated at the rates prevailing on that date. Non-monetary items carried at fair value that are denominated in foreign
currencies are retranslated at the rates prevailing at the date when the fair value was determined. Non-monetary items that are
measured in terms of historical cost in a foreign currency are not retranslated.
Exchange differences arising on the settlement of monetary items, and on the retranslation of monetary items, are included in the
statement of financial performance for the period.
Exchange differences arising on the retranslation of non-monetary items carried at fair value are included in the statement of financial
performance for the period.
N) LEASES
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.
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.
OUR FINANCIALS 134
NOTES TO THE FINANCIAL STATEMENTS
FOR THE 52 WEEKS ENDED 1 OCTOBER 2022
2 ACCOUNTING POLICIES CONTINUED
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.
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 subleases 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 then 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.
TOPPS TILES PLC ANNUAL REPORT AND ACCOUNTS FOR THE 52-WEEK PERIOD ENDED 1 OCTOBER 2022 135
2 ACCOUNTING POLICIES CONTINUED
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.
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.
OUR FINANCIALS 136
NOTES TO THE FINANCIAL STATEMENTS
FOR THE 52 WEEKS ENDED 1 OCTOBER 2022
2 ACCOUNTING POLICIES CONTINUED
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.
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.
TOPPS TILES PLC ANNUAL REPORT AND ACCOUNTS FOR THE 52-WEEK PERIOD ENDED 1 OCTOBER 2022 137
2 ACCOUNTING POLICIES CONTINUED
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.
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 a
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 de-recognition.
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) 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.
OUR FINANCIALS 138
NOTES TO THE FINANCIAL STATEMENTS
FOR THE 52 WEEKS ENDED 1 OCTOBER 2022
2 ACCOUNTING POLICIES CONTINUED
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.
ACQUISITION OF SUBSIDIARY UNDERTAKING
During the year the Group acquired 60% of Pro Tiler Limited with options to acquire the remaining 40% in 2024. The acquisition has
been accounted for as a business combination, with the earn out for the remaining 40% accounted for as remuneration.
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 which 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 1.25% and 7.91% 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 inventories where it is anticipated that net realisable value (NRV) will be
below costs. For the determination of NRV provisions, inventories are classified into three broad categories, being continuing,
discontinued and expected to be discontinued. The key estimate within the inventory provision relates to the lines which are
expected to be discontinued within the coming financial year. The provisions held are based upon the experience of write offs in the
preceding financial year. Analysis has shown that once inventory is discontinued, the likelihood of write off significantly increases.
For inventory identified as “to be discontinued within 12 months” an increase in the expected write off rate of 20% would result in
increased provisions of approximately £600,000.
VALUATION OF INTANGIBLES
Estimates have been made around the future cash flows of Pro Tiler Limited, that have been used in the valuation of the Pro
Tiler brand.
TOPPS TILES PLC ANNUAL REPORT AND ACCOUNTS FOR THE 52-WEEK PERIOD ENDED 1 OCTOBER 2022 3 GROUP REVENUE
An analysis of Group revenue is as follows:
Revenue from the sale of goods
Total revenue
139
52 weeks
ended
1 October
2022
£’000
247,241
247,241
53 weeks
ended
2 October
2021
£’000
227,997
227,997
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, trade 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.
Revenue can be split by the following geographical regions:
UK
EU
Rest of World
Total
52 weeks
ended
1 October
2022
£’000
246,866
240
135
247,241
53 weeks
ended
2 October
2021
£’000
227,997
–
–
227,997
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.
4 PROFIT BEFORE TAXATION
Profit before taxation for the period has been arrived at after charging/(crediting):
Depreciation of property, plant and equipment
Depreciation of right-of-use assets
Operating lease costs not within the scope of IFRS 16 – low value and short-term rentals
Impairment charge/(reversal) of property, plant and equipment
Impairment of right-of-use assets
Loss on disposal of property, plant, equipment and intangibles
Amortisation of intangibles
Staff costs (see note 5)
Exchange (gains)/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 nil freehold properties (2021: three freehold properties).
Analysis of the Auditors’ 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
52 weeks
ended
1 October
2022
£’000
5,609
18,212
2,201
240
1,473
394
500
57,096
(1,060)
4,254
108,622
52 weeks
ended
1 October
2022
£’000
111
262
373
–
373
53 weeks
ended
2 October
2021
£’000
6,268
20,508
953
(604)
2,402
1,736
186
57,955
145
4,598
92,554
53 weeks
ended
2 October
2021
£’000
74
229
303
–
303
A description of the work of the Audit Committee is set out on page 78 and includes an explanation of how Auditors’ objectivity and
independence is safeguarded when non-audit services are provided by the Auditors.
OUR FINANCIALS 140
NOTES TO THE FINANCIAL STATEMENTS
FOR THE 52 WEEKS ENDED 1 OCTOBER 2022
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
52 weeks
ended
1 October
2022
Number
employed
1,390
361
1,751
53 weeks
ended
2 October
2021
Number
employed
1,533
314
1,847
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)
52 weeks
ended
1 October
2022
Number
employed
1,311
355
1,666
2022
£’000
53 weeks
ended
2 October
2021
Number
employed
1,455
283
1,738
2021
£’000
51,585
52,348
4,472
1,039
4,498
1,109
57,096
57,955
Details of Directors’ emoluments are disclosed on pages 106 to 111. The Group considers key management to be the Directors only.
Employee profit sharing of £7.9 million (2021: £8.3 million) is included in the above and comprises sales commission and bonuses.
The total charge for Share Based Payments recognised during the year was £0.5m (2021: £0.7m)
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
52 weeks
ended
1 October
2022
£’000
53 weeks
ended
2 October
2021
£’000
58
65
123
11
76
87
(384)
(3,626)
(4,010)
(430)
(3,728)
(4,158)
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 52-WEEK PERIOD ENDED 1 OCTOBER 2022 7 TAXATION
Current tax – charge for the period
Deferred tax – charge for the period (note 15)
Deferred tax – adjustment in respect of prior periods (note 15)
Effect of tax rate change on opening balance (note 15)
Total tax charge
52 weeks
ended
1 October
2022
£’000
2,577
360
(1,183)
–
1,754
The charge for the period can be reconciled to the profit per the statement of financial performance as follows:
Continuing operations:
Profit before taxation
Tax at the UK corporation tax rate of 19.0% (2021: 19.0%)
Expenses that are not deductible in determining taxable profit
Other movements
Fixed asset differences (non-deductible expenses)
Increase/(Reduction) in UK corporation tax rate
Non-taxable income
Adjustment in respect of prior periods
Tax expense for the period
52 weeks
ended
1 October
2022
£’000
10,945
2,080
8
391
657
–
(199)
(1,183)
1,754
141
53 weeks
ended
2 October
2021
(restated)1
£’000
2,418
1,143
145
(427)
3,279
53 weeks
ended
2 October
2021
(restated)1
£’000
13,955
2,651
11
(36)
709
(29)
(172)
145
3,279
In the period, the Group has recognised a corporation tax credit directly to equity of £nil (2021: £nil) and a deferred tax charge to
equity of £nil (2021: £46,701) in relation to the Group’s share option schemes.
The Group continues 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 (2021: £988,000).
1 See note 2(A) for an explanation of the prior year restatement.
8 DIVIDENDS
Amounts recognised as distributions to equity holders in the period:
Final dividend for the period ended 2 October 2021 of £0.031 (2020: £nil) per share
Interim dividend for the period ended 1 October 2022 of £0.01 (2021: £nil) per share
Total dividend paid in the period
Proposed final dividend for the period ended 2 October 2022 of £0.026 (2021: £0.031) per share
52 weeks
ended
1 October
2022
£’000
6,057
1,958
8,015
5,093
53 weeks
ended
2 October
2021
£’000
–
–
–
6,057
The proposed final dividend for the period ended 1 October 2022 is subject to approval by Shareholders at the Annual General
Meeting and has not been included as a liability in these financial statements.
OUR FINANCIALS 142
NOTES TO THE FINANCIAL STATEMENTS
FOR THE 52 WEEKS ENDED 1 OCTOBER 2022
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.
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 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 See note 2(A) for an explanation of the prior year restatement.
52 weeks
ended
1 October
2022
53 weeks
ended
2 October
2021
196,681,007
196,508,867
(1,099,370)
(1,344,844)
195,581,637
195,164,023
2,165,790
2,274,713
197,747,427
197,438,736
52 weeks
ended
1 October
2022
£’000
53 weeks ended
2 October
2021
(restated)1
£’000
9,005
3,005
12,010
4.60p
4.55p
6.14p
10,676
1,067
11,743
5.47p
5.41p
6.02p
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 2,165,790 (2021: 2,274,713).
Adjusted earnings per share were calculated after adjusting for the post-tax impact of the following items: rates relief £nil benefit
(2021: £1,839,000), impairment of property, plant, equipment of £393,000 (2021: £1,202,000), vacant property costs for
stores closed as part of store reduction programme of £1,402,000 (2021: £1,704,000), IFRS 16 one-off changes including
the impairment of closure programme stores of £104,000 (2021: £nil), restructuring costs of £42,000 (2021: £nil), project and
acquisition costs of £2,246,000 (2021: £nil) and a deferred tax credit in respect of previous periods of £1,183,000 (2021: £nil).
10 GOODWILL
Cost
At 2 October 2021
Acquisition of subsidiary
At 1 October 2022
Accumulated impairment losses
At 2 October 2021
Charge in the period
At 1 October 2022
Carrying amount
At 1 October 2022
At 2 October 2021
£’000
3,349
2,101
5,450
3,349
–
3,349
2,101
–
The Group acquired 60% of Pro Tiler Limited during the year and recognised £2,100,657 of goodwill relating to this purchase. The
carrying value of impairment losses relates to the goodwill recognised on the acquisition of Parkside Ceramics Limited in 2017 and
Strata Tiles Limited in 2019, that were written down to nil in a prior year.
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 52-WEEK PERIOD ENDED 1 OCTOBER 2022 143
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.
The Group anticipates that its ambition to become carbon neutral across Scopes 1 & 2 by 2030 will likely result in a level of
additional cost being incurred to achieve this in future years. Analysis to quantify the level of increased cost is ongoing and there
is currently no estimate of cost incorporated into the future cash flows used in the assessment for goodwill impairment. The key
assumptions underlying the anticipated future cash flows are prudent, so an increase in future costs associated with meeting climate
targets should not materially impact the Group’s current year assessment of recoverable amounts.
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. Discounted cash flows were calculated using a pre-tax rate of 18.6%.
11 INTANGIBLE ASSETS
Cost
Restated at 26 September 20201
Additions1
Restated at 2 October 20211
Additions
Acquisition of subsidiary undertaking
Disposal
At 1 October 2022
Accumulated amortisation
At 26 September 2020
Amortisation charge for the period
At 2 October 2021
Amortisation charge for the period
Disposal
At 1 October 2022
Carrying amount
At 1 October 2022
At 2 October 2021
Brand
£’000
Customer
relationships
£’000
Software
£’000
Total
£’000
1,064
–
1,064
–
5,341
–
6,405
1,042
–
1,042
–
–
–
1,042
1,064
1,042
–
1,042
–
–
1,042
–
1,064
292
–
1,356
5,049
–
981
194
1,175
115
–
(5)
1,285
521
186
707
208
(4)
911
3,087
194
3,281
115
5 5,341
(5)
8,732
2,627
186
2,813
500
(4)
3,309
–
–
374
468
5,423
468
1 See note 2(A) for an explanation of the prior year restatement.
The Group acquired 60% of Pro Tiler Limited during the year and recognised £5,341,000 brand value relating to this purchase. The
carrying value of impairment losses relates to the brand and trademarks recognised on the acquisition of Parkside Ceramics Limited in
2017 and Strata Tiles Limited in 2019, that were written down to nil in a prior year.
Software is amortised over its estimated useful life of four years. The Pro Tiler brand will be amortised over a period of ten years.
Amortisation is included within administrative costs within the Consolidated Statement of Financial Performance.
OUR FINANCIALS 144
NOTES TO THE FINANCIAL STATEMENTS
FOR THE 52 WEEKS ENDED 1 OCTOBER 2022
12 PROPERTY, PLANT AND EQUIPMENT
Land and buildings
Freehold
and long
leasehold
£’000
Short
leasehold
£’000
Fixtures and
fittings
£’000
Motor
vehicles
£’000
Plant and
Machinery
£’000
Cost
At 26 September 2020
Additions
Disposals
At 2 October 2021
Additions
Disposals
Acquisition of subsidiary undertakings
At 1 October 2022
Accumulated depreciation
At 26 September 2020
Charge for the period
Reversal of impairment
Eliminated on disposals
At 2 October 2021
Charge for the period
Impairment charge
Eliminated on disposals
At 1 October 2022
Carrying amount
At 1 October 2022
At 2 October 2021
1,612
1,566
86,803
–
(308)
1,304
174
(187)
4,020
(4,414)
1,553
86,409
–
–
252
(130)
1,304
1,675
268
31
–
(10)
289
26
–
–
315
1,087
111
(84)
(109)
1,005
98
(3)
(95)
1,005
2,775
(2,291)
82
86,975
61,463
6,120
(520)
(2,748)
64,315
5,454
243
(1,894)
68,118
989
1,015
670
548
18,857
22,094
72
27
(63)
36
–
(142)
215
109
65
6
–
(58)
13
15
–
(3)
25
84
23
Total
£’000
90,053
4,221
(4,972)
89,302
3,090
(2,571)
543
90,364
62,883
6,268
(604)
(2,925)
65,622
5,609
240
(1,995)
69,476
–
–
–
–
63
(8)
246
301
–
–
–
–
–
16
–
(3)
13
288
–
20,888
23,680
Cumulative finance costs capitalised in the cost of tangible fixed assets amount to £nil (2021: £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 the Group has provided for the
net book value of assets in relation to 15 stores (2021: seven) that are impaired. The carrying value of these assets has been fully
provided for in the period, with an increase in the provision of £240,000 in the period (2021: £604,000 decrease in the provision)
included within other operating expenses.
All assets classified as property, plant and equipment are UK based.
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.
TOPPS TILES PLC ANNUAL REPORT AND ACCOUNTS FOR THE 52-WEEK PERIOD ENDED 1 OCTOBER 2022 145
14 LEASES
AS A LESSEE
Right-of-use assets included in the Consolidated Statement of Financial Position were as follows:
At 26 September 2020
Additions
Disposals
Depreciation
Impairment
At 2 October 2021
Additions
Acquisition of subsidiary undertaking
Disposals
Depreciation
Impairment
At 1 October 2022
Land and
buildings
£’000
Equipment
£’000
Total
£’000
103,388
2,870
106,258
14,876
(3,010)
(19,018)
(2,402)
93,834
9,521
2,155
(746)
(17,084)
(1,473)
86,207
Land and
buildings
£’000
204
–
(1,490)
–
1,584
1,882
–
–
(1,128)
–
2,338
15,080
(3,010)
(20,508)
(2,402)
95,418
11,403
2,155
(746)
(18,212)
(1,473)
88,545
Equipment
£’000
Total
£’000
Lease liabilities included in the Consolidated Statement of Financial Position were as follows:
At 26 September 2020
Additions
Disposals
Interest
Repayment of lease liabilities
At 2 October 2021
Additions
Acquisition of subsidiary undertaking
Disposals
Interest
Repayment of lease liabilities
At 1 October 2022
The maturity analysis of the lease liabilities is as follows:
Current
Non-current
(121,285)
(2,871)
(124,156)
(15,220)
5,213
(3,678)
(201)
(15,421)
–
(50)
5,213
(3,728)
25,192
(109,778)
1,562
(1,560)
26,754
(111,338)
(9,429)
(2,155)
2,227
(3,573)
(1,860)
(11,289)
–
–
(53)
(2,155)
2,227
(3,626)
22,010
(100,698)
1,243
(2,230)
23,253
(102,928)
2022
£’000
(18,187)
(84,741)
2021
£’000
(19,521)
(91,817)
(102,928)
(111,338)
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
2022
£’000
21,787
61,484
44,396
2021
£’000
22,912
64,116
47,582
127,667
134,610
OUR FINANCIALS 146
NOTES TO THE FINANCIAL STATEMENTS
FOR THE 52 WEEKS ENDED 1 OCTOBER 2022
14 LEASES CONTINUED
The following amounts have been recognised in the Consolidated Statement of Financial Performance:
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
Land and
buildings
2022
£’000
17,084
1,473
3,573
–
1,764
Land and
buildings
2021
£’000
19,018
2,402
3,678
96
857
Equipment
2022
£’000
Total
2022
£’000
1,128
18,212
–
53
57
1,473
3,626
57
433
2,196
Equipment
2021
£’000
1,490
–
50
–
–
Total
2021
£’000
20,508
2,402
3,728
96
857
The total cash outflow for leases during the financial period was £23.2 million (2021: £26.8 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)
2022
£’000
430
65
2021
£’000
413
76
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.
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
2022
£’000
214
87
–
301
2021
£’000
214
300
–
514
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.
TOPPS TILES PLC ANNUAL REPORT AND ACCOUNTS FOR THE 52-WEEK PERIOD ENDED 1 OCTOBER 2022 147
14 LEASES CONTINUED
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
2022
£’000
599
1,317
800
2,716
(227)
2,489
542
1,947
2,489
2021
£’000
582
1,511
1,048
3,141
(288)
2,853
518
2,335
2,853
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 cash flows 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
cash flows was 14.6%.
An increase in pre-tax discount rate of 500bps at
year-end would result in an increase in value of
impairments of £0.1 million.
Long-term growth rate This is the average growth rate used to
Cash flow forecasts
extrapolate cash flows beyond the budget
period. At the year-end, a long-term growth rate
of 1.5% was applied.
Cash flows are derived from extrapolation of
trading performance of identified CGUs. Key
assumptions include:
• expected year-on-year growth in cash
contributions for stores; and
• expected cash flows associated with the
replacement of leased assets expected to
be incurred on the maturity of lease terms
for existing leases.
A decrease in the long-term growth rate of
1400bps at year-end would result in an increase
in value of impairments of £0.1 million.
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
£0.1 million.
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 £0.1 million.
OUR FINANCIALS 148
NOTES TO THE FINANCIAL STATEMENTS
FOR THE 52 WEEKS ENDED 1 OCTOBER 2022
15 DEFERRED TAX ASSETS
The following are the deferred tax assets/(liabilities) 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
Restated at 26 September 20201
Credit/(charge) to income
Charge in respect of previous periods
Effect of tax rate change on opening
balance
Charge to equity
Restated at 2 October 20211
Charge to income
Credit in respect of previous periods
Recognition on acquisition of subsidiary
At 1 October 2022
669
(149)
(48)
196
–
668
(149)
–
–
519
708
(1,249)
(97)
203
–
(435)
(29)
1,183
–
719
88
262
–
28
(47)
331
(255)
–
–
76
7
(7)
–
–
–
–
–
–
–
–
–
–
–
–
–
–
73
–
(1,273)
(1,200)
Total
£’000
1,472
(1,143)
(145)
427
(47)
564
(360)
1,183
(1,273)
114
1 See note 2(A) for an explanation of the prior year restatement.
A UK corporation rate of 25% (effective 1 April 2023) was substantively enacted on 24 May 2021. This will increase the Company’s
future current tax charge accordingly. The deferred tax asset at 1 October 2022 has been calculated at 25% (2021: 25%).
16 INVENTORIES
Goods for resale
2022
£’000
2021
£’000
38,605
32,758
Goods for resale includes a net realisable value provision of £1,906,000 (2021: £1,575,000). Write-downs of inventories to net
realisable value amounted to £4,254,000 (2021: £4,598,000) 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
2022
£’000
2021
£’000
3,469
(306)
861
2,395
6,419
1,829
(279)
1,089
1,899
4,538
The Directors consider that the carrying amount of trade and other receivables at 1 October 2022 and 2 October 2021
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 1 October 2022 amounted to £3.2 million
(2021: £1.6 million). These amounts mainly relate to sundry trade account generated sales. In relation to these sales, the average
credit period taken is 48 days (2021: 55 days) and no interest is charged on the receivables.
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.
TOPPS TILES PLC ANNUAL REPORT AND ACCOUNTS FOR THE 52-WEEK PERIOD ENDED 1 OCTOBER 2022 149
17 TRADE AND OTHER RECEIVABLES CONTINUED
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 (2021: £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 £306,000 by the end of the period (2021: £279,000).
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
2022
£’000
2021
£’000
15,543
27,064
391
307
495
230
16,241
27,789
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
2022
£’000
–
2022
£’000
–
–
–
–
2021
£’000
(106)
2021
£’000
–
–
(106)
(106)
The Directors consider that the carrying amount of the bank loan at 1 October 2022 and 2 October 2021 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
2022
%
–
2021
%
–
OUR FINANCIALS 150
NOTES TO THE FINANCIAL STATEMENTS
FOR THE 52 WEEKS ENDED 1 OCTOBER 2022
19 BANK LOANS CONTINUED
The following is a reconciliation of changes in financial liabilities to movement in cash from financing activities:
As at 26 September 2020
Repayment 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
Repayment of lease liabilities
Non-cash movement – Lease additions and disposals
Non-cash movement – leases acquired with business combination
Interest accrued on lease liabilities
Debt acquired through company acquisition
Repayment of debt
Amortisation of issue costs
As at 1 October 2022
Lease
liabilities
£’000
Current
borrowings
£’000
Non-current
borrowings
£’000
Unamortised
issue costs
£’000
124,156
–
(26,754)
10,208
3,728
–
–
111,338
(23,253)
9,062
2,155
3,626
–
–
–
102,928
5,000
(5,000)
–
–
–
–
–
–
–
–
–
–
(468)
468
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
(134)
–
–
–
–
(98)
126
(106)
–
–
–
–
–
–
106
–
At 02 October 2022, the Group had a revolving credit facility to June 2023 of £39.0 million. As at the financial period end, £nil
of this was drawn (2021: £nil), leaving £39.0 million of undrawn committed banking facilities. The loan facility contains financial
covenants which are tested on a bi-annual basis. The Group did not breach any covenants in the period.
On 21 October 2022, the Group entered into a new three-year revolving credit facility arrangement for £30.0 million expiring in
October 2025 with an option to extend for a further two years.
20 TRADE AND OTHER PAYABLES
Amounts falling due within one year
Trade payables
Other payables
Accruals
Deferred income
Contract liabilities
2022
£’000
2021
£’000
17,388
6,106
15,617
1,001
3,538
17,439
8,823
15,840
956
4,367
43,650
47,425
Trade payables and accruals principally comprise amounts outstanding for trade purchases and ongoing costs. The average credit
period taken for trade purchases is 41 days (2021: 47 days). No interest is charged on these payables.
The Directors consider that the carrying amount of trade payables at 1 October 2022 and 02 October 2021 approximates to their
fair value on the basis of discounted cash flow analysis.
Accruals includes amounts held in respect of expected customer returns of £1,131,000 (2021: £1,105,000).
Deferred income relates to consideration for trader loyalty points earned but not yet redeemed. The value of deferred income as at
02 October 2021 that was recognised as revenue for the 52 weeks ended 1 October 2022 was £759,000.
Contract liabilities relate to deposits received from customers for orders not yet fulfilled. The value of contract liabilities as at 02
October 2021 that was recognised as revenue for the 52 weeks ended 1 October 2022 was £4,579,000.
TOPPS TILES PLC ANNUAL REPORT AND ACCOUNTS FOR THE 52-WEEK PERIOD ENDED 1 OCTOBER 2022 151
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 2021. 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
2022
£’000
21,893
518
142,039
Carrying
value and
fair value
2021
£’000
32,192
63
153,440
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
2022
£’000
339
394
2021
£’000
238
495
2022
£’000
4,282
414
2021
£’000
2,876
155
OUR FINANCIALS
152
NOTES TO THE FINANCIAL STATEMENTS
FOR THE 52 WEEKS ENDED 1 OCTOBER 2022
21 FINANCIAL INSTRUMENTS CONTINUED
FOREIGN CURRENCY SENSITIVITY ANALYSIS
The Group is mainly exposed to the currencies of China, India, Brazil and Turkey (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
2022
£’000
358
2
(438)
(2)
2021
£’000
240
31
(293)
(38)
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
2022
£’000
2021
£’000
12,229
10,867
These arrangements are designed to address significant exchange exposures for the first half of 2023 and are renewed on a
revolving basis as required.
At 1 October 2022 the fair value of the Group’s currency derivatives is a gain of £518,177 within other debtors and prepayments
(note 17) (2021: gain of £63,006 within other debtors and prepayments (note 17)).
Gains of £455,171 have been included in cost of sales during the period (2021: £39,589 gain).
INTEREST RATE RISK MANAGEMENT
The Group is not exposed to interest rate risk as the Group has no bank debt.
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.
TOPPS TILES PLC ANNUAL REPORT AND ACCOUNTS FOR THE 52-WEEK PERIOD ENDED 1 OCTOBER 2022 153
21 FINANCIAL INSTRUMENTS CONTINUED
LIQUIDITY AND INTEREST RISK TABLES
The following table details the Group’s remaining contractual maturity for its non-derivative financial liabilities. The table includes both
interest and principal cash flows.
2022
Non-interest bearing
Lease liabilities
Variable interest rate instruments
2021
Non-interest bearing
Lease liabilities
Variable interest rate instruments
Less than
1 month
£’000
39,111
1,443
–
Less than
1 month
£’000
42,102
1,956
–
1–3
months
£’000
–
3 months
to 1 year
£’000
–
1–5
years
£’000
–
5+
years
£’000
Total
£’000
–
39,111
5,218
15,126
61,484
44,396
127,667
–
1–3
months
£’000
–
–
3 months
to 1 year
£’000
–
–
1–5
years
£’000
–
–
5+
years
£’000
–
Total
£’000
–
42,102
4,844
16,112
64,116
47,582
134,610
–
–
–
–
–
The Group is financed through a £39.0 million (2021: £39.0 million) revolving credit facility, of which £nil (2021: £nil) was utilised.
At the balance sheet date, the total unused amount of financing facilities was £39.0 million (2021: £39.0 million).
On 21 October 2022, the Group entered into a new three-year revolving credit facility arrangement for £30.0m, expiring in
October 2025 with an option to extend for a further two years.
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.
2022
Foreign exchange forward contracts
payments
Foreign exchange forward contracts
receipts
2021
Foreign exchange forward contracts
payments
Foreign exchange forward contracts
receipts
Less than
1 month
£’000
1–3
months
£’000
3 months
to 1 year
£’000
(2,147)
(4,440)
(5,642)
2,293
4,595
5,642
Less than
1 month
£’000
1–3
months
£’000
3 months
to 1 year
£’000
(2,099)
(1,862)
(6,906)
2,094
1,875
6,962
1–5
years
£’000
–
–
1–5
years
£’000
–
–
5+
years
£’000
Total
£’000
–
–
(12,229)
12,530
5+
years
£’000
Total
£’000
–
–
(10,867)
10,931
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 (2021: 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).
OUR FINANCIALS 154
NOTES TO THE FINANCIAL STATEMENTS
FOR THE 52 WEEKS ENDED 1 OCTOBER 2022
22 PROVISIONS
Dilapidations provision
Earn out liability
Current
Non-current
At 2 October 2021
Created in the year
Utilisation of provision
At 1 October 2022
2022
£’000
2,465
1,581
4,046
352
3,694
4,046
Earn out
liability
£’000
–
1,581
–
1,581
2021
£’000
2,322
–
2,322
353
1,969
2,322
Total
£’000
2,322
2,400
(676)
4,046
Dilapidations
provision
£’000
2,322
819
(676)
2,465
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 17 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 5.0% (2021: 5.5%). A 10% reduction in discount rate
would lead to an increase in property provisions of £55,000 (2021: £54,000).
The earn out liability represents remuneration costs in relation to the purchase of the remaining 40% of Pro Tiler Limited.
23 SHARE CAPITAL
Allotted, issued and fully paid ordinary shares of 3.33p
(2021: 3.33p)
2022
Shares
2021
Shares
2022
£’000
2021
£’000
At the start of the period
Issued in the period
At the end of the period
196,662,131
196,443,323
19,687
218,808
196,681,818
196,662,131
6,555
1
6,556
6,548
7
6,555
During the period the Group issued 19,687 (2021: 218,808) ordinary shares with a nominal value of £656 (2021: £7,294)
under share option schemes for an aggregate cash consideration of £12,600 (2021: £140,037).
The authorised share capital of the Group is £8,000,000 (2021: £8,000,000), which consists of 240,000,000 ordinary shares
(2021: 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
2022
£’000
2,625
11
2,636
2021
£’000
2,492
133
2,625
TOPPS TILES PLC ANNUAL REPORT AND ACCOUNTS FOR THE 52-WEEK PERIOD ENDED 1 OCTOBER 2022 25 OWN SHARES
At start of the period
Acquired in the period
Disposed of on issue in the period
At end of the period
155
2022
£’000
2021
£’000
(1,216)
(1,483)
(207)
1,008
(415)
–
267
(1,216)
A subsidiary of the Group holds 796,486 (2021: 1,259,275) shares with a nominal value of £414,676 acquired for an average
price of £0.52 per share (2021: £1,216,479 acquired for an average price of £0.97 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 (2021: £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 £1,039,000 (2021: £1,109,000). At the period end, the Group holds outstanding contributions of
£235,604 (2021: £203,595).
C) LEASE COMMITMENTS
At the balance sheet date, the Group had no outstanding commitments for future minimum lease payments under non-cancellable
operating leases (2021: none).
27 SHARE-BASED PAYMENTS
The Group operates four (2021: four) 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 are 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:
2022
2021
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
Weighted
average
exercise price
£
Number of share
options
Weighted
average exercise
price
£
Number of
share options
4,940,443
1,668,414
(164,442)
0.50 4,339,091
0.53 3,058,326
0.52
(749,549)
(1,380,846)
0.50
(1,451,424)
(627,377)
4,436,192
0.51
(256,001)
0.51 4,940,443
–
–
–
0.59
0.46
0.74
0.55
0.62
0.50
–
During the financial period, the Group granted 1,668,414 share options under the existing share option scheme due to vest in April
2025 with a fair value of £257,036.
OUR FINANCIALS 156
NOTES TO THE FINANCIAL STATEMENTS
FOR THE 52 WEEKS ENDED 1 OCTOBER 2022
27 SHARE-BASED PAYMENTS CONTINUED
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
— %
— %
62.40
52.64
39.39
3.0
1.0558
4.97
Expected volatility was determined by calculating the historical volatility of the Group’s share price over the previous three years
(2021: three years).
The weighted average remaining contractual life of the share options outstanding at the end of the period is 1.91 years
(2021: 2.23 years).
The exercise price for share options under the share save scheme range from 46.30 pence to 60.35 pence.
The weighted average share price at the date of exercise of options exercised during the year ended 1 October 2022 is 55 pence
(2021 restated: 71 pence).
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
2022
2021
Number of
share options
6,565,167
2,231,740
(1,681,100)
(183,371)
6,932,436
540,142
Weighted
average
exercise price
£
–
–
–
–
–
–
Number of share
options
6,617,309
2,949,924
(2,822,392)
(179,674)
6,565,167
723,513
Weighted
average
exercise price
£
–
–
–
–
–
–
During the financial period, the Group granted 2,231,740 share options under the existing share option scheme due to vest in
December 2024 with a fair value of £1,323,600.
The inputs to the Black–Scholes model are as follows:
Weighted average share price
Weighted average exercise price
Expected volatility
Expected life
Risk-free rate of interest
Dividend yield
— pence
— pence
— %
— years
— %
— %
68
Nil
39.34
3.00
0.44
4.56
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 (2021: one, two and three years).
The weighted average remaining contractual life of share options outstanding at the end of the period is 7.80 years (2021: 7.72 years).
The weighted average share price at the date of exercise of options exercised during the year ended 1 October 2022 is 39.75
pence (2021: 64.75 pence).
TOPPS TILES PLC ANNUAL REPORT AND ACCOUNTS FOR THE 52-WEEK PERIOD ENDED 1 OCTOBER 2022 157
27 SHARE-BASED PAYMENTS CONTINUED
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 were not met and the scheme
has lapsed.
Movements in 2020 Long-Term Incentive Plan options are summarised as follows:
2022
2021
Number of
share options
Weighted
average
exercise price
£
Number of share
options
Weighted
average exercise
price
£
Outstanding at beginning of the period
Forfeited during the period
Outstanding at end of the period
–
–
–
–
1,889,443
– (1,889,443)
–
–
–
–
–
The weighted average remaining contractual life of share options outstanding at the end of the period is nil years (2021: nil years)
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 which are due to vest in December 2022, December 2023 and December 2024. One set of options vested in
December 2021.
Movements in the 2020 Restricted Stock Plan options which vested in December 2021 are summarised as follows:
Outstanding at beginning of the period
Issued during the period
Exercised during the period
Outstanding at end of the period
2022
2021
Number of
share options
76,628
–
(48,641)
27,987
Weighted
average
exercise price
£
Number of share
options
Weighted
average
exercise price
£
–
–
–
–
–
76,628
–
76,628
–
–
–
–
The weighted average share price at the date of exercise of options exercised during the year ended 1 October 2022 is 52.50
pence (2021: £nil pence).
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
Forfeited during the period
Outstanding at end of the period
2022
2021
Number of
share options
153,329
–
(21,166)
132,163
Weighted
average
exercise price
£
Number of share
options
Weighted
average
exercise price
£
–
–
–
–
–
153,329
–
153,329
–
–
–
–
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
Forfeited during the period
Outstanding at end of the period
2022
2021
Number of
share options
229,888
–
(57,084)
172,804
Weighted
average
exercise price
£
Number of share
options
Weighted
average
exercise price
£
–
–
–
–
–
229,888
–
229,888
–
–
–
–
OUR FINANCIALS 158
NOTES TO THE FINANCIAL STATEMENTS
FOR THE 52 WEEKS ENDED 1 OCTOBER 2022
27 SHARE-BASED PAYMENTS CONTINUED
Movements in 2020 Restricted Stock Plan options due to vest in December 2024 are summarised as follows:
Outstanding at beginning of the period
Issued during the period
Forfeited during the period
Outstanding at end of the period
2022
2021
Number of
share options
–
229,348
(46,578)
182,770
Weighted
average
exercise price
£
Number of share
options
Weighted
average
exercise price
£
–
–
–
–
–
–
–
–
–
–
–
–
During the financial period, the Group granted 229,348 share options under the new share option scheme due to vest in December
2024 with a fair value of £136,022.
The inputs to the Black–Scholes model are as follows:
Weighted average share price
Weighted average exercise price
Expected volatility
Expected life
Risk-free rate of interest
Dividend yield
— pence
— pence
— %
— years
— %
— %
68
Nil
39.34
3.00
0.44
4.56
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 8.56 years (2021: 9.21 years).
In total, the Group recognised a total expense of £519,500 (2021: £677,287 expense) relating to share-based payments.
28 ACQUISITION OF SUBSIDIARY
The Group acquired a controlling 60% shareholding of Pro Tiler Limited on 9 March 2022, for consideration of £5.5 million, of
which £5.3 million was cash paid. The Group will acquire the remaining 40% of the issued share capital from March 2024, based
on an agreed multiple of profits for the 12-month period to March 2024.
The Group performed a purchase price allocation exercise on Pro Tiler Limited to restate assets and liabilities at their fair value.
Separately identifiable intangible assets were recognised in relation to the Pro Tiler brand.
On acquisition, the Group recognised tangible assets of £1.6 million, including £1.4 million of cash, £0.2 million of net working
capital, £0.5 million loan and £0.5 million of property, plant and equipment, and intangible assets consisting of the brand value of
£4.1 million net of deferred tax and goodwill of £2.1 million, together with a non-controlling interest of £2.3 million. The brand asset
will be amortised over ten years, in line with our accounting policies.
The future purchase of the remaining 40% of shares in Pro Tiler Limited will be accounted for as a remuneration expense rather than
contingent consideration, as required by IFRS 3, due to certain conditions placed on the selling Shareholders to remain employed
by the Group during this time. This expense will be treated as an adjusting item over the next two years and will therefore reduce
the Group’s statutory profit in forthcoming trading periods. This expense is not treated as a deductible expense for corporation tax
purposes and therefore the Group’s effective rate of corporation tax will increase in FY22 and the next two financial years as a result
of this accounting treatment.
Acquisition costs of £0.2 million and remuneration costs of £1.6 million in relation to the 40% share purchase were treated as
adjusting items within adjusted profit.
TOPPS TILES PLC ANNUAL REPORT AND ACCOUNTS FOR THE 52-WEEK PERIOD ENDED 1 OCTOBER 2022 28 ACQUISITION OF SUBSIDIARY CONTINUED
The fair value of the net assets acquired and liabilities assumed at the acquisition date were:
Property, Plant and Equipment
Inventories
Trade and other receivables
Trade and other payables
Loan
Cash and cash equivalents
Right-of-use lease asset
Lease liability
Brand valuation
Deferred tax
Non-controlling interest
Fair value of assets acquired
Total consideration
Goodwill
159
£’000
543
1,485
460
(1,749)
(468)
1,368
2,155
(2,155)
5,341
(1,273)
(2,283)
3,424
5,525
2,101
The residual goodwill recognised on the acquisition of Pro Tiler Limited represents the proportion of consideration attributable to value
acquired in excess of the separately identified assets and liabilities presented above.
Consideration comprised:
Cash
Directors’ loan payable to Pro Tiler Limited
Total consideration
The net cash outflow in the cash flow statement in the period was as follows:
Cash consideration
Cash acquired
Net cash outflow in the cash flow statement
£’000
5,336
189
5,525
£’000
5,336
(1,368)
3,968
Since the date of control, the following amounts have been included within the Group’s financial statements for the period (excluding
amortisation of the Pro Tiler brand):
Revenue
Profit before tax
£’000
9,196
576
Had the acquisition been included from the start of the period, £14,673,000 of revenue and £705,000 of profit before tax would
have been included in the Group’s financial statements for the period.
29 RELATED-PARTY TRANSACTIONS
MS Galleon AG is a related party by virtue of their 29.9% shareholding (58,569,649 ordinary shares) in the Group’s issued share
capital (2021: 20% shareholding of 38,992,750 ordinary shares).
At 1 October 2022 MS Galleon AG is the owner of Cersanit, a supplier of ceramic tiles with whom the Group made purchases of
£1,253,296 during the year which is 1.1% of cost of goods sold (2021: purchases of £460,000 during year which is 0.5% of cost
of goods sold).
An amount of £113,718 was outstanding with Cersanit at 1 October 2022 (2021: £60,000). All transactions were conducted 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 £1.4 million (2021:
£1.2 million) including share-based payments of £0.1 million (2021: £nil). Further information about the remuneration of the
individual Directors is provided in the Remuneration Report on pages 68 to 72.
30 POST BALANCE SHEET EVENT
Other than the refinancing of the Group’s debt facility per note 19, there have been no post balance sheet events.
OUR FINANCIALS 160
COMPANY BALANCE SHEET
AS AT 1 OCTOBER 2022
Non-current assets
Investments
Current assets
Debtors
Cash at bank and in hand
Creditors: amounts falling due within one year
Net current assets
Non-current 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
Total shareholders’ funds
Note
2022
£’000
2021
£’000
4
5
6
7
9
10
8,727
2,682
181,216
137,275
7,921
(124,521)
64,616
(1,581)
(126,102)
71,762
6,556
2,636
5,696
20,359
6,200
30,315
71,762
19,479
(88,936)
67,818
–
(88,936)
70,500
6,555
2,625
5,176
20,359
6,200
29,585
70,500
The Company made a profit after tax for the financial period ended 1 October 2022 of £8,745,000 (2021: £1,901,000).
The financial statements on pages 160 to 169 were approved by the Board of Directors on 30 November 2022 and signed on its
behalf by:
Rob Parker
Directors
Stephen Hopson
TOPPS TILES PLC ANNUAL REPORT AND ACCOUNTS FOR THE 52-WEEK PERIOD ENDED 1 OCTOBER 2022 161
COMPANY STATEMENT OF CHANGES IN EQUITY
FOR THE 52 WEEKS ENDED 1 OCTOBER 2022
Company
Called-up
share
capital
£’000
Share
premium
account
£’000
Share-
based
payment
reserve
£’000
Capital
redemption
reserve
£’000
Other
reserve
£’000
Profit
and loss
account
£’000
Total
£’000
Balance at 26 September 2020
6,548
2,492
4,499
20,359
6,200
27,684
67,782
Profit for the period
Issue of new shares
Credit to equity for equity-settled
share-based payments
Balance at 2 October 2021
Profit for the period
Dividend paid to equity Shareholders
Issue of new shares
Credit to equity for equity-settled
share-based payments
Balance at 1 October 2022
–
7
–
133
–
–
–
–
–
–
1,901
–
1,901
140
–
6,555
–
2,625
677
5,176
–
20,359
–
6,200
–
29,585
677
70,500
–
–
1
–
–
11
–
–
–
–
–
–
–
–
–
8,745
(8,015)
–
8,745
(8,015)
12
–
6,556
–
2,636
520
5,696
–
20,359
–
6,200
–
30,315
520
71,762
OUR FINANCIALS 162
NOTES TO THE COMPANY FINANCIAL STATEMENTS
FOR THE 52 WEEKS ENDED 1 OCTOBER 2022
1 GENERAL INFORMATION AND BASIS OF ACCOUNTING
Topps Tiles Plc is a public limited company, limited by shares, incorporated and domiciled in the United Kingdom and registered in
England under the Companies Act 2006. The address of the registered office is given on page 41.
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 which is a party to the transaction is wholly owned by such a member
v. The requirements of paragraphs 10(d), 10(f), and 134 to 136 of IAS 1 “Presentation of Financial Statements”
vi. The requirements of paragraphs 30 and 31 of IAS 8 “Accounting Policies, Changes in Accounting Estimates and Errors”
Where relevant, equivalent disclosures have been given in the Group 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
2 October 2021.
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 Company 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.
IFRS 17, “Insurance contracts” (effective 1 January 2023 or when IFRS 9 is applied) subject to endorsement
Amendments to IFRS 16 “Leases: Covid-19-Related” rent concessions beyond 30 June 2021 – (effective 1 April 2021)
Amendments to IFRS 9, IAS 39, IFRS 7, IFRS 4 and IFRS 16 “Interest Rate Benchmark Reform – Phase 2” (effective 1 January 2021)
Annual Improvements 2018–2020 (effective 1 January 2022)
Narrow scope amendments to IFRS 3, IAS 16 and IAS 37 (effective 1 January 2022)
TOPPS TILES PLC ANNUAL REPORT AND ACCOUNTS FOR THE 52-WEEK PERIOD ENDED 1 OCTOBER 2022 163
2 ACCOUNTING POLICIES
The principal accounting policies adopted are set out below. These policies have been applied consistently.
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 more pessimistic trading scenarios that are deemed severe but plausible. The two downside scenarios
modelled include a moderate decline in sales and a more severe decline in sales, which result in much lower sales and gross profit
than the base scenario, resulting in worse profit and cash outcomes. The more severe downside scenario modelled this year was
based on a prolonged period of macroeconomic stress in the UK, lasting for two years, with sales falling substantially in each year in
our main brand, Topps Tiles, as well as year-on-year declines in gross margins.
The Group has already taken a number of actions to strengthen its liquidity over the recent years, and the scenarios start from a position
of relative strength. 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 October 2022 and expires at the earliest in
October 2025. In all scenarios, the Board has 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 continues to adopt the going concern basis in preparing the financial statements.
B) FINANCIAL PERIOD
The accounting period is drawn up to a Saturday within 7 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 2022 mean “at 1 October 2022” or the
52 weeks then ended; references to 2021 mean “at 2 October 2021” or the 53 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.
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.
OUR FINANCIALS 164
NOTES TO THE COMPANY FINANCIAL STATEMENTS
FOR THE 52 WEEKS ENDED 1 OCTOBER 2022
2 ACCOUNTING POLICIES CONTINUED
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.
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 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.
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.
TOPPS TILES PLC ANNUAL REPORT AND ACCOUNTS FOR THE 52-WEEK PERIOD ENDED 1 OCTOBER 2022 165
2 ACCOUNTING POLICIES CONTINUED
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) 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.
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:
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).
OUR FINANCIALS 166
NOTES TO THE COMPANY FINANCIAL STATEMENTS
FOR THE 52 WEEKS ENDED 1 OCTOBER 2022
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 1 October 2022 of £8,745,000 (2021: £1,901,000).
The Auditors’ remuneration for services to the Company was £111,000 for audit-related work (2021: £73,750 for audit-related
work). Fees relating to non-audit work totalled £nil (2021: £nil); see note 4 to the Group financial statements for further details.
The Company had no employees other than the Directors (2021: same), whose remuneration is detailed on page 68.
The Company paid dividends of £8,015,000 during the financial period, detailed in note 8 of the Group Financial Statements.
4 INVESTMENTS
Cost and net book value at 26 September 2020
Acquisition of subsidiary
Movement in share options granted to employees
Impairment of investments in subsidiaries
Cost and net book value at 2 October 2021
Acquisition of subsidiary
Movement in share options granted to employees
Cost and net book value at 1 October 2022
For details of the acquisition, see note 28 of the Consolidated Financial Statements
£’000
2,005
154
677
(154)
2,682
5,525
520
8,727
TOPPS TILES PLC ANNUAL REPORT AND ACCOUNTS FOR THE 52-WEEK PERIOD ENDED 1 OCTOBER 2022 167
4 INVESTMENTS CONTINUED
The following were subsidiaries that the Company has investments in, both as at 1 October 2022 and 2 October 2021 except for
Pro Tiler Limited that was acquired in the current period:
Subsidiary undertaking
Topalpha Limited*
Topalpha (Warehouse) Limited
Topalpha (Stoke) Limited
Tiles4less Limited*
Topps Tiles (UK) Limited
Topps Tiles Holdings Limited*
Topps Tile Kingdom Limited
Multi-Tile Limited
Topps Tiles Distribution Limited
Multi-Tile Distribution Limited
Topps Tiles I.P Company Limited
% of issued
shares held Principal activity
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
Property management and investment
Property management and investment and provision of warehousing services
Property management and investment
Intermediate holding company
Retail and wholesale of ceramic tiles, wood flooring and related products
Intermediate holding company
Intermediate holding company
Retail and wholesale of ceramic tiles, wood flooring and related products
Wholesale and distribution of ceramic tiles, wood flooring and related products
Intermediate holding company
Ownership and management of Group intellectual property
Topps Tiles Employee Benefit Trust* 100%
Employee benefit trust
Strata Tiles Limited*
Parkside Ceramics Limited*
Pro Tiler Limited*
100%
100%
60%
* Held directly by Topps Tiles Plc.
Architectural ceramic sales and distribution
Commercial distribution of ceramic and porcelain tiles, natural stone and related products
Online specialist supplier of tiling-related consumables and equipment to trade customers
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, England,
LE19 1SN.
For the year ended 1 October 2022, 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
Company registration number
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
Pro Tiler Limited
Strata Tiles Limited
03150850
03714868
04123146
05840669
01697061
05236219
05008512
05235969
07154275
04501077
OUR FINANCIALS 168
NOTES TO THE COMPANY FINANCIAL STATEMENTS
FOR THE 52 WEEKS ENDED 1 OCTOBER 2022
5 DEBTORS
Amounts owed by subsidiary undertakings
Prepayments
Other debtors
2022
£’000
2021
£’000
179,669
135,844
38
1,509
22
1,409
181,216
137,275
Amounts owed by subsidiary undertakings are interest free, repayable on demand and not subject to any security.
6 CREDITORS: AMOUNTS FALLING DUE WITHIN ONE YEAR
Trade and other creditors
Amounts owed to subsidiary undertakings
Accruals
2022
£’000
272
121,811
2,438
124,521
2021
£’000
550
85,448
2,938
88,936
Amounts owed to subsidiary undertakings are interest free, repayable on demand and not subject to any security.
7 PROVISIONS
The earn out liability is for the purchase of Pro-Tiler and is all due in March 2024.
Earn out liability
Current
Non-current
8 LEASES
AS A LESSEE
Right-of-use assets included in the Balance Sheet were as follows:
At 26 September 2020
Disposals
Depreciation
At 2 October 2021
At 1 October 2022
Lease liabilities included in the Balance Sheet were as follows:
At 26 September 2020
Disposals
Interest
Repayment of lease liabilities
At 2 October 2021
At 1 October 2022
2022
£’000
1,581
–
1,581
2021
£’000
–
–
–
Equipment
£’000
647
(453)
(194)
–
–
Equipment
£’000
(649)
471
(2)
180
–
–
TOPPS TILES PLC ANNUAL REPORT AND ACCOUNTS FOR THE 52-WEEK PERIOD ENDED 1 OCTOBER 2022 8 LEASES CONTINUED
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
169
Equipment
2022
£’000
–
–
Equipment
2021
£’000
194
2
The total cash outflow for leases during the financial period was £nil (2021: £180,000).
9 CALLED-UP SHARE CAPITAL
Allotted, issued and fully paid 196,681,818 (2021: 196,662,131) ordinary shares of 3.33p each
(2021: 3.33p)
2022
£’000
2021
£’000
6,556
6,555
During the period 375,480 shares were purchased by Topps Tiles Employee Benefit Trust on behalf of the Group (2021: nil).
During the period the Group issued and allotted 19,687 (2021: 218,808) ordinary shares with a nominal value of £656
(2021: £7,294) under share option schemes for an aggregate cash consideration of £7,294 (2021: £140,037).
During the year, dividends of £8,015,000 (2021: £nil) were paid. See note 8 of the Consolidated Financial Statements for further
details.
10 OTHER RESERVES
The other reserves comprise an unrealised gain arising on the disposal of certain trademarks to a subsidiary company.
11 CONTROLLING PARTY
The Company has no individual controlling party.
OUR FINANCIALS 04 ADDITIONAL
INFORMATION
CONTENTS
Five-year Record*
The Team
Store Locations
* Unaudited.
172
173
182
172
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
29 September
2018
£’000
52 weeks
ended
28 September
2019
(restated)1
£’000
52 weeks
ended
26 September
2020
(restated)1
£’000
53 weeks
ended
2 October
2021
(restated)1
£’000
52 weeks
ended
1 October
2022
£’000
216,887
219,197
192,813
227,997
247,241
13,735
12,688
26,663
5.00p
3.40p
1.475
2,114
12,989
12,181
29,938
5.03p
3.40p
1.485
2,089
62.90p
66.60p
(6,141)
(9,925)
13,958
(4.16)p
Nil
n/a
2,001
51.40p
18,026
13,955
24,956
5.47p
3.10p
1.765
1,847
14,832
10,945
29,049
4.60p
3.60p
1.285
1,751
65.60p
38.50p
All figures quoted are inclusive of continued and discontinued operations.
1 See Consolidated Group Financial Statements note 2(A) for an explanation of the prior year restatement.
TOPPS TILES PLC ANNUAL REPORT AND ACCOUNTS FOR THE 52-WEEK PERIOD ENDED 1 OCTOBER 2022 173
THE TEAM
A
Aadil Mulla
Aaron Booth
Aaron Butler
Aaron Gauntlett
Aaron Goodman
Aaron James
Aaron Osei-Tutu
Aaron Powell
Aaron Ryan
Abdul Khaem
Abigail Stevenson
Abu Samad
Adam Connor
Adam Gilkes
Adam Heffer
Adam Holland
Adam Howes
Adam Nuttall
Adam Shearsmith
Adam Woollam
Aderemi Adediran
Adie Danvers
Adrian Gibbons
Adrian Gower
Agit Kunduru
Agnieszka Kozera
Agnieszka Rozmarynowska
Agnieszka Skrzypczak
Ahmad Hussain
Aidan Dawes
Aimee Gallagher
Aimee Kidby
Akshey Vadgama
Alain Gouro
Alan Lamb
Alan Maxwell
Alan Saunders
Aleksandr Lagowski
Alex Di Pace
Alex Douglas
Alex Saunter
Alexander Abram
Alexander Shepherd
Alexander Walton
Alexander Williams
Alexandros Poupazis
Alexandru Soim
Alice Cairns
Alise Matule
Alisha Millward
Alison Alexander
Alison Mazzei-Foster
Ally McLean
Allysha Byrne
Amanda Brogan
Amanda Lyon
Amanda Plumb
Amanda Samuel
Amanda Smyth
Amanpreet Singh
Amar Trivedi
Amardeep Singh Sanghera
Ambrose Watson
Amelia Chappell
Amelia Foster
Amelia Gohil
Amin Ali
Amman Afzal
Amy McDaid
Amy Swanson
Amy Wirtz
Ananthan Sivanesan
Andrea Moon
Andrew Carter-Riley
Andrew Collins
Andrew Davis
Andrew Dixon
Andrew Fenner
Andrew Goodman
Andrew Habbick
Andrew Harrison
Andrew Hawker
Andrew Haynes
Andrew Hopkinson
Andrew James
Andrew Jones
Andrew Oliver
Andrew Playfoot
Andrew Reilly
Andrew Ribbons
Andrew Robson
Andrew Roseby
Andrew Sansum
Andrew Shaw
Andrew Tibbetts
Andrew Warne
Andrew Waterfield
Andrew Wathan
Andrew Wilkinson
Andrew Woodier
Andrius Matusevicius
Aneta Akwe
Aneta Kleczek
Angela Capp
Angela Cooke
Angela George
Ankit Mahes
Ann Karas
Anna Hibberd
Anna Skoczylas
Annabelle Harris
Anna-Marie Putt
Anthony Cattell
Anthony Chamberlain
Anthony Daly
Anthony Davies
Anthony Dolan
Anthony Dunsmore
Anthony Gilbert
Anthony Langmead
Anthony Lyth
Anthony Molyneux
Anthony Reynolds
Anthony Taylor
Antonios Alvanos
Antony Belham
Antony Miles
Anub Varghese
Anwar Marshall
Arif Aswat
Aron Hoff
Aruna Mistry
Ashish Kumar
Ashish Patel
Ashley Burke
Ashley Cutler
Ashley Harwood
Ashley Hegarty
Ashley Hughes
Ashley Katinas
Ashley Leggett
Ashley Mansfield
Ashley Willats
Asim Khan
Astone Davids
Athina Sesay
Atul Patel
Azim Ahmed
B
Bailey Aldred
Bailey Thorington
Barbara Connor
Barbara Smith
Barry Beaver
Barry Gilbert
Barry Parker
Bayley Seymour
Beata Skoczylas
Belinda Irvine
Ben Chapman
Ben Charity
Ben Gaby
Ben Howard
Ben Johnson
Ben Macartney
Ben Murphy
Benito Garrod
Benjamin Broom
Benjamin Cunliffe
Benjamin Hale
Benjamin Hawes
Benjamin Rich
Benjamin Spicer
Bethanie Evans
Beverley Orton
Bhupinder Singh
Billy Stout
Bitrycka Malgorzata
Blake Ladeinde
Blayne Rut
Bolaji Adeyanju
Bonita Wright
Brad Kingsford
Bradley Cox
Bradley Rockell
Brandon Abels
Brandon Battle
Brandon Casey
Brandon Clow
Brandon Lodge
Brayan Pyzlowski
Brendan Flynn
Brett O’Harrow
Brett Simkiss
Bruce Fielding
Bruce Garrod
Bruno Bernasconi
Bryn Lewis
Bryn Slowley
Buffy Harding-Attwood
Byron Tree
ADDITIONAL INFORMATION 174
THE TEAM
C
Caitlin Pipes
Caitlin Timbrell
Calvin Christopher
Cameron Oakey
Campbell Marr
Carl Ainsworth
Carl Courtney
Carl Whatley
Carla Sinnott
Carlos Alford Maestre
Carlos Chowdhury
Carly Falcus
Carol Beattie
Carol Hawkes
Carol Hobbs
Carol Isherwood
Caroline Vernon-Sutton
Carolyn Paull
Carrie Peckston
Carrie-anne Burnett
Carys-Sian Wilson
Casey Dyson
Catherine Britton
Catherine Doulton
Catherine Platt
Chakib Ayoub
Chanel Sanganoo
Chantelle Gurney
Charjuan Knight
Charlene Walpole
Charles Hopper
Charles Robbins
Charles Rollins
Charles Taylor
Charlie Almond
Charlie Cox
Charlie Dowse
Charlie Foster
Charlie Turnbull Philips
Charlotte Bessent
Charlotte Cook
Charlotte Jackson
Charlotte Lammin
Charlotte Self
Chelsea Battle
Chelsea Goodeve
Chelsea Knight
Cheryl Vearncombe
Chetna Shah
Chloe Hall
Chloe Jackson
Chloe Jones
Chloe Singleton
Chris Foster
Christian D’Agostino
Christian McCarthy
Christine Taylor
Christine Thistlethwaite
Christopher Bailey
Christopher Bass
Christopher Bentley
Christopher Bodicoat
Christopher Bowden
Christopher Bree
Christopher Brown
Christopher Burrows-Simpson
Christopher Butler
Christopher Collins
Christopher Cooper
Christopher Curtis
Christopher D’Arts
Christopher Edwards
Christopher Farren
Christopher Fath
Christopher Green
Christopher Heyes
Christopher Holland
Christopher Hope
Christopher Howe
Christopher MacFarlane Leach
Christopher Moore
Christopher Nicholls
Christopher Nottle
Christopher Pinnock
Christopher Potter
Christopher Sansby
Christopher Sylvester
Christopher Taylor
Christopher Turley
Christopher Wells
Cian Beardmore
Ciaran Morgan
Clair Jeffries
Claire Crowhurst
Claire Herridge
Claire Lewis
Claire Paterson
Claire Ralphs
Clare Barden
Clare Long
Clifford Adams
Clifford Tomlinson
Colin Clarke
Colin Denson
Colin Harvey
Colin Markham
Colin Petch
Colin Rymer
Colin Smith
Connagh Latham
Conner Ockenden
Connor Gane
Connor Garrow
Connor Hills
Connor Thompson
Conrad Cassidy
Conrad Harrup
Cora Morrison
Courteney Colville
Courtney Maglone-Gillies
Courtney Thomas
Craig Dolling
Craig Green
Craig Johnson
Craig McPike
Craig Melnick
Craig Murphy
Craig Reed
Craig Richards
Cristian Olaru
Curtis Lee
D
Daisy Garnett
Damiano Seresini
Dan Bevan
Danial Holloway
Daniel Bath
Daniel Berkes
Daniel Brace
Daniel Brain
Daniel Caine
Daniel Chambers
Daniel Colk
Daniel Cox
Daniel Fallows
Daniel Faust
Daniel Geoghegan
Daniel Gillett
Daniel Harper
Daniel Horrocks
Daniel Jenkins
Daniel Jones
Daniel Little
Daniel Loft
Daniel Maslin
Daniel McLean
Daniel Milner
Daniel Moyse
Daniel Musguin
Daniel O’Callaghan
Daniel Pimm
Daniel Poile
Daniel Roberts
Daniel Rowe
Daniel Rowlands
Daniel Sewell
Daniel Sheppard-Brown
Daniel Shutler
Daniel Thornley
Daniel Turner
Daniel Varney
Daniel Whiter
Daniel Willows
Daniella Winstone
Danielle Noyes
Danielle O’Mara
Daniel-Paul Petrut
Danny Ostler
Darius Bright
Darnelle Riley
Darran Wood
Darren Bockarie
Darren Doughty
Darren Ealden
Darren Finnegan
Darren Harper
Darren Jones
Darren Mencarini
Darren Mitchell
Darren Morgan
Darren Shapland
Darren Square
Darren Wagg
Darren Young
Darron Kerr
Darron Soos
Darryl Lawson Innes
David Augustus
David Baxter
David Clare
David Clark
David Coupland
TOPPS TILES PLC ANNUAL REPORT AND ACCOUNTS FOR THE 52-WEEK PERIOD ENDED 1 OCTOBER 2022 175
David Fletcher
David Fox-Matthews
David Green
David Hance
David Hatton
David Henderson
David Hill
David Hirst
David Hooper
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 Mouland
David Murray
David Oliver
David Parcell
David Reynolds
David Sheehy
David Simms
David Sinclair
David Thomas
David Thomasson
David Thompson
David Webb
David Wilson
Davina Vitles
Dean Jones
Dean Marshall
Dean Rodger
Dean Titchen
Debbie Potts
Deborah Edwards
Deborah Turk
Debra Bandghiree
Declan Baker
Decland Speede
Deeandra Bellew
Deesha Bhatt
Deividas Korsakas
Denis O’Brien
Dennis Jovellanos
Dennis Winterburn
Denzil Johns
Dermott Reilly
Deryn Shipley
Desmond Alleyne
Devindren Govender
Dharmika Shah
Diana Breeze
Diana Lei
Dilawar Ali
Dino Tate
Dipal Parikh
Dolton Gordon
Dominic D’Souza
Dominic Hardman
Dominic Reilly
Donald Magullian
Douglas Nicol
Dylan Roberts
Dylan Worley
E
Eddy Hyde
Edward Harrison
Eesha Manick
Elaina Waterhouse
Elaine Johnson
Eleanor Grace Ashdown
Elise Ford
Elizabeth Fay
Elizabeth Innes
Elizabeth Lee
Elizabeth Sutton
Ella Jones
Ellie Jordan
Elliott Brown
Elliott Davis
Ellis Molyneux
Ellysia Sharples
Elsie Bird
Emily Connelly
Emily Davis
Emily Gardiner
Emily Gibbons-Filippini
Emily Lenham
Emily Lenton
Emily Mansell
Emma Fitzpatrick
Emma Gotch
Emma Greenfield
Emma Shaw
Emmanuel Melford-Rowe
Emran Mannan
Enrikas Kvietinskas
Erandika Senevirathna
Eren Ucman
Erik Fazekas
Erikas Mazeikis
Ermiyas Girma
Esme Sparrow
Ethan O’Grady
Euan Preece
Eugenia Grigoruta
Eve Riddle
Eve Ruckwood
Eve White
Ewelina Szreder-Politowska
Ezra Deans
F
Faizar Ali
Faye Highstead
Felipe Franco
Felipe West
Filip Rozmyslowicz
Filipe Albarraque
Finlay Nelmes
Finley Loughlin
Frances Aylward
Frank Hibbert
Fraser Lockley
G
Gabriel Semedo
Gareth Fogden
Garnet Hardy
Gary Bloomfield
Gary Davies
Gary Gear
Gary Gee
Gary Gledhill
Gary Nash
Gary Tipler
Gary West
Gary Wilkinson
Gary Williams
Gavin Bennett
Gavin Collins
Gavin Magwood
Gavin Winter
Gemma Bircham
Gemma Davies
Gemma Stephens
Geoffrey Greenwood
Geoffrey Thomas
George Astill
George Birkley
George Dewis
George Griffin
George Newton
George Wicks
Georgia Harding
Georgia Miles
Georgina Duffy
Geraint Griffiths
Gergo Poroszlai
German Ramirez Marin
Gillian Grace
Girish S Nair
Glenn Davies
Glenn Elgy
Glenn Smith
Gokhan Karadogan
Gordon Dalglish
Grace Emery
Gracjan Draheim
Graham Brown
Graham Foster
Graham Hancock
Graham Hitchin
Graham Livingstone
Graham Vance
Grant Smith
Grazvydas Garbacenokas
Gregor Robson
Gregory McHugh
Grenville Davies
Gurinder Chana
Guy Gorenski
H
Haider Durrani
Hana Alexandria
Hannah Booth
Hannah Emmott
Hannah Kennedy
Harriet Buckley
Harriet Goodacre
Harriet Hartley
Harry Biggs
Harry Page
Harry Williams
Harvey Collins
Harvey Williams
ADDITIONAL INFORMATION 176
THE TEAM
Hasan Ali
Hayden Hart
Hayden Mason
Haydn Young
Hazel Millington
Helen Gosling
Helen Hughes
Helen Meredith
Hilary Colgan
Holly Ballinger
Holly Dawson
Holly Hayes
Holly Meager
Holly Nettleton
Holly Peck
Holly Skerritt
Hugh Butler
I
Iain Arnott
Iain Black
Ian Barber
Ian Bloomfield
Ian Croton
Ian Fraser
Ian Marshall
Ian McNeish
Ian Merry
Ian Paterson
Ian Smithson
Ian Sykes
Igors Koselevs
Ildiko Barta
Ilia Nenovski
Ingrid Obernauer
Isaac Wright
Isaiah Khaoya
Isha Denny-Gardener
Ishaq Ahmed
Ivan Paitoo
J
Jacek Skubisz
Jack Ablett
Jack Beesley
Jack Ellis
Jack Fairburn
Jack Gallagher
Jack Garton
Jack Hill-Jones
Jack Holyoake
Jack Howard
Jack Millman
Jack Ockenden
Jack O’Neill
Jack Relfe
Jack Sharpe
Jack Swann
Jack Tillotson
Jack Veall
Jacob Allan
Jacob Machin
Jacob Powell
Jacqueline Desborough-
Morehead
Jade Clements
Jade Girgensons
Jade Gore
Jade Stone
Jadzia Webb
Jailuene Witterick Peake
Jake Carter
Jake Shopland
Jake Wescott
Jake Woods
Jakub Jackowski
James Barnett
James Beaumont
James Biesty
James Cameron
James Carpenter
James Carroll
James Charles
James Hawker
James Heard
James Hollis
James Howard
James Hyland
James Journet
James Joyce
James McClary
James McGuigan
James Morgan
James O’Driscoll
James Patston
James Peters
James Robertson
James Rolfe
James Ruse
James Saunders
James Snuggs
James Steeples
James Taylor
James Thatcher
James Watton
James White
James Wolstenholme
James Daniel Calvert
Jamie Austin
Jamie Calow
Jamie Cardall
Jamie Copland
Jamie Kelly
Jamie Martin
Jamie McCann
Jamie Ormrod
Jamie Sia
Jamie Thornton
Jamie Wenborn
Jamie Whitear
Janaka Alahapperuma
Janay Bell
Jane Williams
Janet Lee
Janet Robinson
Janis Cirulis
Jasbir Singh
Jasimron Dehl
Jason Barker
Jason Coupland
Jason Ealden
Jason Nelson
Jason Trawford
Jaspreet Sandhu
Javeed Parkar
Jay Davies
Jay Gurney
Jay Tinsley
Jayde Cheyne
Jayden Croft
Jayden Greaves
Jayesh Kantibhai Mistry
Jayne Young
Jaytan Vadher
Jedrzej Politowski
Jennifer Balfour
Jennifer Buddington
Jennifer Flowers
Jennifer Glover
Jennifer Gregory
Jennifer Opoku
Jennifer Seabrook
Jennifer Wall
Jenny Inkson
Jeremy Long
Jerome Matthew Ridley
Jessica Duncan
Jessica Hatton
Jessica Hinton
Jessica Jarman
Jessica Sawyer
Jessica Wood
Jo Adamson
Joana Oakes
Joanna Knapczyk
Joanne Cox
Joanne Elton
Jodie Du-Hamel
Jodie Jones
Joe Dwyer
Joe Guymer
Joe Mathews
Joe Raynsford
Joe Smith
Joe Walker
Joe Whalley
Joel Barker
Joel Bray
Johann Thompson
John Bourke
John Burton-Simm
John Fawkes
John Harris
John Hennessy
John Hesp
John Hughes
John McLaren
John McLarty
John Moat
John Morris
John Page
John Shaw
John Stannard
John Sweet
John Turnham
Jon O’Neill
Jon Reynolds
Jon Paul Hughes
Jonatan Muti
Jonathan Bradshaw
Jonathan Brett
Jonathan East
Jonathan Hall
Jonathan Perks
TOPPS TILES PLC ANNUAL REPORT AND ACCOUNTS FOR THE 52-WEEK PERIOD ENDED 1 OCTOBER 2022 Jonathan Pinchbeck
Jonathan Stone
Jonathan Wallace
Jonathan Wiles
Jonathan Williams
Jonathon Turner
Jonathon Underdown
Jonathon Wynder
Jordan Bannister
Jordan Ferguson
Jordan Joyce
Jordan Lindsay
Jordan Lowes
Jordan Mackay
Jordan Matthews
Jordan Scarbrow
Joseph Daly
Joseph Deevey
Joseph Durham
Joseph Gregorace
Joseph Haughney
Joseph Haynes
Joseph Hopper
Joseph Lewis
Joseph Marriott
Joseph Marsden
Josephina Lane
Josh McFadden
Joshua Batting
Joshua Bradley
Joshua Brown
Joshua Burgess
Joshua Coulton
Joshua Crombie
Joshua Curtis
Joshua Dutton
Joshua Hubbard
Joshua Norbury
Joshua Paton-Rolls
Joshua Rapley
Josiah Andrew-Razemba
Josie Colehan
Josie Walker
Juan Oliveira McDowell
Jude McGuigan
Judith Duncan
Julia Cristina Argudo Avendano
Julia Kerr
Julie Brachtvogel
Julie Mitchell
Julie Poolford
Julie Wood
Junior Oji
Justin Marlow
Justin Smalley
Justine Bowman
Justyna Logozna-Lisowska
Juttinder Digpal
K
Ka Tsun Wong
Kahseem Roberts
Kai Stevens
Kai Sylvester
Kajetan Marcinek
Kamaljit Atkar
Kamaljit Thandi
Kamlesh Shah
Karan Gill
Karen Dodds
Kari Daniels
Karis Hall
Karl Lusardi
Karl Reeves
Karl White
Kate Floyd-Jewell
Katherine Jackson
Katherine Toomassi
Kathryn Pell
Katie Brindley-Hughes
Katie Hill
Katie Wright
Katy Todd
Kavita Vaghela
Kay Dwelly
Kayleigh Clemson
Kayley Halliday
Keaton Bayliss
Keeleigh Gibson
Keely Powell
Keiran Ling
Keith Ambrose
Keith Down
Keith Fitzpatrick
Kellie Figueiredo
Kelly Blount
Kelly Goodacre
Kelly Savile
Kenneth Ostler
Kenneth Owen
Kerri Maguire
Kerrie Burcham
Kerry Hurst
Kerry McAuliffe
Kevan Richardson
Kevin Atherton
Kevin Baker
Kevin Bingham
Kevin Da Silva
Kevin Downie
Kevin Facer
Kevin Fox
Kevin Frampton
Kevin Hardy
Kevin Hooper
Kevin Nicol
Kevin Rabbatt
Kevin Thorne
Kieran Barnes-Warden
Kieran Brown
Kieran Fleet
Kieran Gardiner
Kieran Morgan
Kieran Scott
Kieran Warwick
Kim Jones
Kim Moriarty
Kimberley Vieira
Kirk Irvine
Kirk Randall
Kirk Taylor
Kirsten Cummings
Kirstie Leonard
Kirsty Graham
Kirsty Harris
Kirti Patel
Kouakou Ange Davis
Kranthi Billakanti
Kristian Catterall
Kristian Creese
Kristian Moore
Kristian Prosser
Krystle Milan
Krzysztof Zielinski
Kurt Folkes
Kurt Page
Kye Harman
Kyle Batley
Kyle Crichton
Kyle Foxon
Kyle Hardie
Kyle Landy
Kyle Martin
177
Kyle Northern-Neal
Kyle Rigby
Kyle Welford
Kyran Andrews
Kyron Soares
L
Laney Taylor
Latifah Spence
Laura Alder-Rose
Laura Buckley
Laura James
Laura Johnson
Laura Li
Laura Madigan
Laura Racey
Lauren Clinton
Lauren Munro
Lauren Sinnott
Lauren Smith
Laurence Bird
Lauryn Cotton
Laurynas Neverauskas
Lawrence Boi
Lawrence Devello-Waters
Layla Gearey
Leah Collings
Leah Sains
Leandro Silva
Leanne Curry
Lee Begley
Lee Brightman
Lee Butcher
Lee Eagling
Lee Fish
Lee Galloway
Lee Holyoake
Lee Hutchinson
Lee Woodman
Leighton Davies
Lenny Finch
Leon Pryce
Lesley Willcox
Levar Gardiner
Lewis Elkin
Lewis Harkins
Lewis Hill
Lewis Penn
Liam Bantin
Liam Corbett
Liam Ellis
ADDITIONAL INFORMATION 178
THE TEAM
Liam Flynn
Liam Hunt
Liam Leigh
Liam Lishman
Lianne Harrison
Libby Field
Lily Gardner
Lily Yeo
Linda Sleath
Lindsay Bond
Lindsey Flint
Lisa Algar
Lisa Cullen
Lisa Holmes
Lloyd Allen
Lloyd Blanks
Lloyd Jackson
Lois Bettinson
Loucas Louca
Louie Walker
Louis Bontemps
Louis Spaett
Louise Bunting
Louise Cox
Louise Groves
Louise Henbest
Louise Mclaren
Louise Reddell
Lucia Garces
Lucy Harper-Thompson
Lucy Jenner
Lucy Rock
Lucy Swain
Lukasz Pirga
Luke Abraham
Luke Barefield
Luke Colclough
Luke Kerr
Luke Kirkman
Luke McNally
Luke O’Connor
Luke Roberts
Luke Saunders
Luke Stratford
Luke Woodward
Lyndsey Farmer
Lynne Meldrum
Lynsey Smart
M
Macaulay Kirk
Macy Harvey
Madeline Pipes
Magdalena Chodynicka
Mahesh Wara
Maisie Bell
Mandy Antenbring
Manraj Sandhu
Marc Davies
Marc Harris
Marcin Kupczyk
Marco Costeira
Marcus Bullock
Marcus Oliver
Margaret Lawrie
Margarita Starcea
Maria Lacramioara Lacatusu
Mariia Kosonohova
Mark Allman
Mark Brown
Mark Burgess
Mark Cain
Mark Campbell
Mark Chantler
Mark Clark
Mark Coe
Mark Gasson
Mark Heath
Mark Hughes
Mark Hunter
Mark Johnston
Mark Keymer
Mark MacIver
Mark Matthews
Mark Owen
Mark Palmer
Mark Pancott
Mark Ridley
Mark Rogers
Mark Sloan
Mark Tennant
Mark Waldock
Mark West
Mark Williams
Mark Woodyatt
Mark Wordley
Mark Wright
Marshall Brewin
Martin Abel
Martin Brown
Martin Oliver
Martin Osborne
Martin Pickard
Martin Sweet
Martin Williams
Martin Wys
Martina Way
Martine Robinson
Martyn Spring
Matt Attwood
Matt Malloy
Matthew Atkinson
Matthew Barcas
Matthew Buckett
Matthew Cornish
Matthew Fisher
Matthew Foster-Smith
Matthew Grainger
Matthew Lindsay
Matthew Lynch
Matthew Mamamdo
Matthew Martin
Matthew McManus
Matthew Moore
Matthew Ponsford
Matthew Ralfs
Matthew Rowson
Matthew Stevenson
Matthew Vinters
Matthew Whitlock
Matthew Woodhouse
Matthew Wright
Mattia Galassi
Max Evans
Max Turnbull Philips
Medea Antal
Megan Boyle
Megan Hawtin
Megan Jones
Megan Robinson-Green
Megan Thorp
Megan Walsh
Mehlika Kilic
Menelik Cowan
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 Moss
Michael Quinn
Michael Sear
Michael Tory
Michael Upton
Michael Van Sittert
Michael Wallace
Michael Wright
Michael John Cordery
Michal Glinka
Michalina Mackiewicz
Michelle Gowland
Michelle Moore
Mike Booth
Minai Kanabar
Miriam Clair Wardle
Miroslaw Hebda
Mitchell Glover
Mitchell Perriss
Mkhonto Gumede
Mohammed Hoque
Mohammed Khalid
Mohammed Rauf
Mohammed Safwan
Mohammed Uddin
Mohammed Zain Shaikh
Mohd Jaji
Mohsin Ahmed
Montana Mills
Morgan Gerrard
Mr Topps (Retired)
Mubashir Uddin
Muhammed Abbus Uddin
Muhammad Choudhury
Mustafa Irkan
TOPPS TILES PLC ANNUAL REPORT AND ACCOUNTS FOR THE 52-WEEK PERIOD ENDED 1 OCTOBER 2022 179
N
Nancy Jacques
Naomi Baron
Naomi Carter
Narinder Chatha
Nasir Hussain
Nasreen Aideed
Natalie Hepburn
Natalie Milan
Natalie Paine
Nataliia Furness
Natasha Johnson
Natasha Stout
Nathan Austin
Nathan Coulthard
Nathan Goddard
Nathan Hughes
Nathan Taylor
Nathan Willcock
Nauris Vinkelis
Neely Stuart
Neha Shah
Neil Anderson
Neil Drage
Neil Grimley
Neil Homan
Neil Jeremy
Neil Jones
Neil Lutterloch
Neil North
Neil Topping
Neil Williams
Nichola Buffam
Nichola Cooper
Nicholas Culley
Nicholas Evans
Nicholas Gadd
Nicholas Lodge
Nicholas Stone
Nicholas Stubbs
Nicholas Taylor
Nicholaus Buchanan
Nick Walch
Nicky Glenister
Nicola Brownley
Nicola Fletcher
Nicola Greenaway
Nicola Howlett
Nicola McWatt
Nicola Monk
Nicola Rose
Nicola Tester
Nicole Andrews
Nicole Colvin
Nigel Slaughter
Nikhita Kaur
Nikita Bedford
Nikolay Georgiev
Nimisha Mistry
Nisha Sodha
Nishit Shah
Nita Rajani
Nixaal Patel
Nizam Mohamed
Norbert Kuta
Numan Usman
O
Oliver Hart
Oliver Iddon
Oliver Verrier
Olivia Dettmer
Olivia Newsome
Omar Bensadoune
Oscar Cork
Osemeke Nwokoro
Owen Tudor
Oz Masaya
P
Paavan Lodhia
Paresh Nagar
Parminder Garcha
Patrick Galvin
Patrick Howlett
Patrick Tompsett
Paul Baker
Paul Bourton
Paul Burkett
Paul Burrow
Paul Carr
Paul Cheetham
Paul Cowen
Paul Gee
Paul Hurt
Paul Irving
Paul Jenkinson-Finn
Paul Kelly
Paul Keymer
Paul Lawty
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
Paulina Bilinska
Pauline Harrison
Paulo De Oliveira Freire
Pawel Pudelko
Pawel Warych
Perran Kelly
Peter Ambrose
Peter Baker-Clements
Peter Callan
Peter Charles
Peter Charters
Peter Goodison
Peter Goulding
Peter Hanley
Peter Lees
Peter Little
Peter Lombardelli
Peter Roberts
Peter Turtle
Peter West
Peter White
Peter Young
Petronela Aidi
Philip Cranston
Philip Dunn
Philip Gallop
Philip Haynes
Philip Speed
Philip Stocks
Philippa Hill
Phillip Gilbert
Phillip Handley
Phillipa Hewitt
Portia Boehmer
Przemyslaw Krulikowski
R
Rachel Fletcher
Radoslaw Doktorski
Radoslaw Naruszewicz
Radoslaw Wojcik
Rafael Lima
Raj Surani
Rajan Toora
Rajesh Thanki
Rajiv Vadgama
Ramanathan Shanmugam
Ratip Hassan
Raymond Punt
Raymond Thompson
Rebeca Wallis
Rebecca Godfrey
Rebecca Love
Rebecca Mills
Rebecca Moore
Rebecca Oblein
Rebecca Wild
Reece Brewin
Reece Charlton
Reece Coppins
Rhiannon Holland
Rhys Baird
Ria Croft
Richard Adamson
Richard Arciero
Richard Austin
Richard Beaven
Richard Bleach
Richard Bourne
Richard Capel
Richard Carter
Richard Clark
Richard Eagland
Richard France
Richard Geare
Richard Gondwe
Richard Greenwood
Richard Heather
Richard Keane
Richard Lewis
Richard Napier
Richard Newbon
Richard Oates
Richard Oldale
Richard Palfrey
Richard Prescott
Richard Senior
Richard Small
Richard Sumner
Rickie Byrne
Ricky Bishop
ADDITIONAL INFORMATION 180
THE TEAM
Rishab Choudhary
Rizwan Saleh
Rob Moody
Robbie Coleman
Robert Adams
Robert Black
Robert Chawner
Robert Collins
Robert Dennis
Robert George
Robert Hardie
Robert Howker
Robert Ireland
Robert Jones
Robert Kroll
Robert Kweli
Robert Moss
Robert Myers
Robert Parker
Robert Prince
Robert Tillotson
Robert Tsui
Robert Wyatt
Robin Shields
Robin Stagg
Robin Williams
Rogan Ayres
Roger Lazenby
Romans Petuhovs
Romany Andrew
Rory Reeves
Rosanna Bastable
Rose Bola
Ross Ashbrook
Ross Langford
Ross Leitch
Ross Pannatt
Roxanne Daly
Roxanne Morris
Roxanne Seurre
Russell Ward
Ryan Apark
Ryan Buston
Ryan Coleman
Ryan Dunn
Ryan Farquhar
Ryan French
Ryan Harris
Ryan Henson
Ryan Izard
Ryan Kemp
Ryan Knauf
Ryan Lundberg
Ryan Needham
Ryan OConnor
Ryan Patterson
Ryan Randall
Ryan Russell
Ryan Simpson
Ryan Wade
S
Sahibjit Samra
Sally Hope-Davis
Sam Bucknall
Sam Davis
Sam Meyrick
Sam Randle
Samantha Davies
Samantha Gray
Samantha Jackson
Samantha Leavis
Samantha Stewart
Sameer Jamdar
Samuel Atkinson
Samuel Knowles
Samuel Linney
Samuel Sharpe
Samuel Underwood
Sandra Ramsay
Sandra Van Spronsen
Sanjeev Pal
Sarah Darby
Sarah Jordan
Sarah Kite
Sarah McLure
Sarah Peters
Satvinder Sandhu
Savio Coutinho
Scott Ahmad
Scott Andrews
Scott Birdseye
Scott Bond
Scott Carpmail
Scott Copeland
Scott Fountain
Scott Gane
Scott Hopwood
Scott Jesson
Scott Keeton
Scott McCartney
Scott Morrison
Scott Robinson
Scott Rogers
Scott Thirlaway
Sean Brandist
Sean Cahill
Sean Campbell
Sean Cundy
Sean Kimber
Sean McClafferty
Shafeek Mohamed
Shahid Mahmood
Shahiem Wilson
Shane Bryan
Shane Lunn
Shane Malone
Shane Mason
Shane Till
Shane Trim
Shanee Gately
Shannon Cochrane
Shannon Dewdney
Shannon Mccarthy
Sharif Islam
Sharna Joseph
Sharon Buckley
Sharon Papantoniou-Barrett
Shaun Gordon
Shaun Pawsey
Shaun Sargeant
Sheena Smith
Sheralyn Tidball
Shrina Shah
Shylo Brookes
Sian Garvey
Sian Horrigan
Sian McCracken
Silvi Atanasova
Silviu Oltean
Simon Badhams
Simon Beare
Simon Briggs
Simon Chapman
Simon Chappell
Simon Davenport-Sharp
Simon Farley
Simon Green
Simon Grimmett
Simon Hall
Simon Lasham
Simon Leslie
Simon MacDonald
Simon Marks
Simon Meider
Simon Neal
Simon Roberts
Simon Webb
Simon Witham
Sinan Demir
Siobhan Ashman
Slavka Ivan
Sonia Sapinska
Sophie Doggart-Hall
Sophie Edney
Sophie Pavey
Sophie Swann
Sophie Sylvester
Spencer Clifford
Spencer Day
Stefan Andronic
Stefan Clark-Carter
Steffan Midwinter
Stephanie Bannister
Stephanie Dinnis
Stephanie Hogben
Stephanie Nevett
Stephanie Shaw
Stephen Amos
Stephen Anthony
Stephen Boyd
Stephen Breslin Burn
Stephen Carr
Stephen Collins
Stephen Corkett
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 Smith
Stephen Velvick
Stephen Watson
Stephen Wright
Steve Brown
Steve Smythe
TOPPS TILES PLC ANNUAL REPORT AND ACCOUNTS FOR THE 52-WEEK PERIOD ENDED 1 OCTOBER 2022 181
Steven Barrowcliffe
Steven Dyer
Steven Howells
Steven Hughes-Jones
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
Summer Hubbard
Sunil Patel
Susan Law
Susanna Horwood
Suzanne Bradford
Sydney Bennett
Sylwia Wygachiewicz
Szabolcs Szudar
T
Tahmid Islam
Tammie O’Lone
Tanya Dix
Tanya Roberts
Tariq Gasmi
Tauseef Usman
Tegan Rowe
Tejay Smith
Terry Morris
Terry Salisbury
Theophilus Danquah
Thomas Ashmore
Thomas Bedford
Thomas Caldicott
Thomas Crook
Thomas Darlaston
Thomas Evans
Thomas Fuller-Winterburn
Thomas Harris
Thomas Knight
Thomas Langston
Thomas Lee
Thomas McGeown
Thomas McPherson
Thomas Murray
Thomas Otley
Thomas Ryan
Thomas Snell
Thomas Utting
Thomas Wade
Thomas Wilson
Tiffany Lowry
Tim Chatfield
Tim Redmond
Tim Richards
Timothy Bentley
Timothy Boardman
Timothy Hilton
Timothy Tatlock
Timothy Watkiss
Tina Hughan
Tina Pain
Tina Willett
Toby Vennard
Todd Bucknall
Todd Routledge
Tom Cheevers
Tom Newman
Tony Chandler
Tony Dumbleton
Tracey Mangan
Tracey Salter
Tracey Turner
Tracey Waterman
Tracy Wearmouth
Travis Prince
Troy Fearon
Troy Ledgerwood
Troy Miller
Tyler King
Tyler Lewis
Tyler Nossent
U
Udo Jungbecker
Uwais Ikleriya
V
Valentin Ivan
Veronica Evett
Veronica Zudaire
Victor Newton
Victoria Cunday
Vilius Meilus
Vincent Bonner
Vinod Joshi
Vishal Depala
Vitor M Rodrigues Tavares
W
Warren Pettersen
Wayne Randall
Wendy Martindale
Wesley Appadoo
William Aires
William Bailey
William Goodwin
William Halfhide
William Harman
William Morris
William Pollock
William Short
William Swain
Wyn Dunn-Davies
Y
Youssef Djeraoui
Yunus Ahmed
Yusuf Balogun
Yvonne Burgess
Yvonne Hardingham
Z
Zach Waterfield
Zara Warner
Zoe Fox
Zoe Gilbert
Zoe Harcus
Zoe Stevens
ADDITIONAL INFORMATION 182
STORE LOCATIONS
MIDLANDS
Barnsley
Binley
Boston
Burton upon Trent
Cannock
Chesterfield
Coventry Tile Hill
Derby Osmaston
Doncaster
Enderby
Erdington
Fenton
Grantham
Grimsby
Hinckley
Kettering Baron
Kidderminster
Kings Norton
Leamington Spa
Leicester Thurmaston
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
Tamworth
Telford
West Bromwich
Worksop
LONDON
Acton
Battersea
Beckenham Topps
Beckton
Bow
Brentford
Brixton
Bromley Common
Catford Bromley Rd
Charlton
Cheam
Chingford
Croydon
Croydon Purley
Dagenham
Dartford
Denham
Dorking
East Sheen
Eltham
Enfield
Epsom
Fulham Topps
Hayes Topps
Hemel Hempstead
Highgate
Hounslow
Ilford
Ilford Seven Kings
Kings Cross
Leyton
New Southgate
North Finchley
Old Kent Road
Orpington
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
NORTH
Aintree
Anfield
Birkenhead
Blackburn
Blackpool
Bolton
Bury
Carlisle
Cheadle
Cheetham Hill
Chester
Darlington
Durham Dragonville
Gateshead
Harrogate
Huddersfield
Hull
Leeds
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
Amersham
Andover
Ashford
Aylesbury
Banbury
Barnstaple
Basildon
Basingstoke
Bath
Bedford Elms
Bexhill
Bicester
Bishops Stortford
Bodmin
Bognor Regis
Borehamwood
Bounds Green
Bournemouth
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
Farnborough
Farnham
Folkestone
Frome
TOPPS TILES PLC ANNUAL REPORT AND ACCOUNTS FOR THE 52-WEEK PERIOD ENDED 1 OCTOBER 2022 183
WALES
Bangor
Barry
Bridgend
Cardiff
Cardiff Newport Road
Carmarthen
Haverfordwest
Llanelli
Merthyr Tydfil
Newport
Rhyl
Swansea Cwmdu
Wrexham
COMMERCIAL
SHOWROOMS
Chelsea
Clerkenwell
Leicester
Swerford
Salisbury
Saltash
Sittingbourne
Slough
Southend
St Neots
Stamford
Stevenage
Strood
Stroud
Sudbury
Sutton
Swindon
Taunton
Thetford
Thurrock
Tonbridge
Torquay
Truro
Tunbridge Wells
Uckfield
Waterlooville
Watford Imperial
Wellingborough
Welwyn Garden City
Weston Super Mare
Winchester
Witney
Woking
Wokingham
Worcester
Yeovil
Gatwick
Glastonbury
Gloucester
Gravesend
Great Yarmouth
Guildford
Harlow
Havant
Hedgend
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
ADDITIONAL INFORMATION T
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TOPPS TILES PLC
Thorpe Way, Grove Park, Enderby, Leicestershire, LE19 1SU
www.toppstilesplc.com