TOPPS TILES PLC
Annual Report and Accounts
for the 52-week period
ended 30 September 2023
Contents
Business Overview
Highlights | 02 |
Celebrating 60 Years of Inspiring Customers | 04 |
Through Our Love of Tiles | |
Introducing Topps Group | 08 |
Group at a Glance | 10 |
Investment Case | 12 |
Chair's Statement | 16 |
Strategic Report
Marketplace | 22 |
Business Model | 24 |
Our Strategy | 26 |
Leading Product | 30 |
Leading People | 32 |
Environmental Leadership | 34 |
Our Channels | |
Omni-channel | 36 |
Commercial | 38 |
Online Pure Play | 40 |
Happy 60th Birthday Topps Tiles | 42 |
Key Performance Indicators | 46 |
Financial Review | 48 |
Our Engagement with Stakeholders | 54 |
Our Sustainability Strategy | 60 |
Task Force on Climate-related | 76 |
Financial Disclosures | |
Risks and Uncertainties | 82 |
Going Concern and Viability Statement | 90 |
Our Governance
Board of Directors | 94 |
Governance at a Glance | 96 |
Executive Committee | 97 |
Corporate Governance Report | 98 |
Audit Committee Report | 108 |
Nomination and Governance Committee Report | 114 |
Directors' Report | 119 |
Directors' Responsibilities Statement | 123 |
Directors' Remuneration Report | 124 |
Our Financials
Independent Auditor's Report | 150 |
Consolidated Statement of Profit or Loss | 158 |
Consolidated Statement of | 158 |
Comprehensive Income | |
Consolidated Statement of Financial Position | 159 |
Consolidated Statement of Changes in Equity | 160 |
Consolidated Cash Flow Statement | 161 |
Notes to the Financial Statements | 162 |
Company Balance Sheet | 201 |
Company Statement of Changes in Equity | 202 |
Notes to the Company Financial Statements | 203 |
Additional Information
Five-Year Record | 214 |
The Team | 215 |
Store Locations | 224 |
Celebrating
60 years of
Topps Tiles
Inspiring customers through our love of tiles.
This year, Topps Group marks the 60th anniversary of its first tile store opening in Manchester in 1963.
Our relentless focus on inspiring customers through our love of tiles, combined with our world-class levels of customer service, has characterised the last 60 years. Today, Topps Group is the largest tile specialist in the UK.
Read more about our history
on pages 04 to 07
2023 has been a successful year for the Group. We have delivered a third consecutive year of record sales, as well as exceeding our market-share goal of "One-In-Five by 2025", two years ahead of its target.
Read more about our Purpose, Goal and Strategy on page 16
Purpose
The core purpose of the Group is to inspire customers through our love of tiles. This purpose gives our business strategic clarity in that opportunities we pursue leverage our core specialism in tiles and closely associated products.
Goal
The Group's goal is to reach 20% market share by 2025.
Saplewood™ Grey
BUSINESS
OVERVIEW
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.
TOPPS TILES PLCANNUAL REPORT AND ACCOUNTS 2023 | 01 |
Highlights
Topps Tiles Plc ("Topps Group", the "Company" or the "Group"), the UK's leading tile specialist, announces its consolidated annual financial results for the 52 weeks ended 30 September 2023.
Adjusted Measures
Topps Tiles like-for-like Adjusted profit revenue year-on-year1 (%) before tax2 (£m)
Adjusted earnings per share3 (p)
Adjusted net cash at period-end4 (£m)
YoY: n/a | |||
19.6 | 9.4 | ||
3.1 | |||
20 | 21 | 22 | 23 |
(12.5) |
YoY: (19.9)%
15.0 | 15.6 | 12.5 | |
3.5 | |||
20 | 21 | 22 | 23 |
YoY: (26.9)%
6.02 | 6.14 | ||
1.52 | 4.49 | ||
20 | 21 | 22 | 23 |
YoY: +£7.2 million | |||
26.0 | 27.8 | 23.4 | |
16.2 | |||
20 | 21 | 22 | 23 |
Statutory Measures
Group revenue (£m) | Gross profit (£m) |
YoY: +6.3% | YoY: +2.8% |
Gross margin (%)
YoY: (1.8) ppts
Profit before tax (£m)
YoY: (37.6)%
192.8 | 228.0 | 247.2 | 262.7 |
20 | 21 | 22 | 23 |
112.8 | 130.7 | 135.4 | 139.2 |
20 | 21 | 22 | 23 |
58.5 | 57.3 | 54.8 | 53.0 |
20 | 21 | 22 | 23 |
14.0 | 10.9 | 6.8 | |
20 | 21 | 22 | 23 |
(9.9) |
Basic earnings per share | Total dividend per share |
YoY: (64.6)% | YoY: Flat |
5.47 | 4.6 | 1.63 | |
20 | 21 | 22 | 23 |
(4.16) |
3.1 | 3.6 | 3.6 | |
20 Nil | 21 | 22 | 23 |
- Topps Tiles like-for-like revenue is defined as sales from Topps Tiles stores that have been trading for more than 52 weeks and www.toppstiles.co.uk
- Adjusted profit before tax excludes the impact of items that are either one-off in nature or fluctuate significantly from year to year. See the financial review section of this document for a reconciliation of adjusted profit before tax to statutory profit before tax
- Adjusted earnings per share is adjusted for the items highlighted above, plus the impact of corporation tax. In 2022, adjusted earnings per share also excluded a £1.2 million deferred tax credit in respect of previous periods, which is not expected to repeat
- 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
02 TOPPS TILES PLCANNUAL REPORT AND ACCOUNTS 2023
Strategic and Operational Highlights
- "One-in-fiveby 2025" market share goal achieved two years early, with market share increasing to 22.1% from 19.8% in 2022 (restated)
- Third consecutive year of record revenue for the Group
- New Topps Group branding, underscoring the significant development and diversification of the Group over recent years
- Record sales in Topps Tiles, with sales per store up 30% compared to pre-pandemic levels, further improvements to world-class customer service scores, and successful expansion into new product categories
- Good progress in Topps Tiles' gross margin, with quarter-on-quarter growth throughout the year (before rebates and other adjustments)
- Excellent progress in Pro Tiler online pure play businesses, with sales up c. 50% year on year and 8-9% profit margins delivered
- Parkside restructure complete and now profitable in the final quarter
- New Chair appointed and new Senior Independent Director Designate announced.
BUSINESS
OVERVIEW
Principle™ White
Financial Summary
• Group revenue up 6.3% to £262.7 million
• Group gross profit up 2.8% to £139.2 million
• Group gross margin at 53.0%, with growth through the year driven by increasing margin in Topps Tiles
• Adjusted profit before tax of £12.5 million, decreased due to the impact of cost inflation
• Cash on hand increased by £7.2 million, due to strong operational cash flows and disciplined working capital management
• Strong balance sheet with £23.4 million net cash and £53.4 million headroom within committed borrowing facilities
• Final dividend of 2.4 pence per share, the full year dividend at 3.6 pence, reflecting confidence in the medium-term prospects of the business.
Current Trading and Outlook
• Trading in the early weeks of the new financial year has reflected the well-documented challenges to discretionary consumer spending, especially RMI, including higher interest rates
and prolonged high inflation, falling house prices and lower housing transactions
• Softer build into seasonal peak trading period, with Group sales
down (3.0%) year on year in first eight weeks of the new financial | |
year, with like-for-like sales in Topps Tiles down (6.1%) and strong | |
growth continuing in Pro Tiler Tools | |
• Well-positioned to continue to take market share due to | |
competitive advantage, including market-leading brands, | |
world-class customer service, specialist expertise, strong balance | |
Torrano™ Blue | sheet, growing cash position and ambitious growth strategy. |
TOPPS TILES PLCANNUAL REPORT AND ACCOUNTS 2023 | 03 |
1963 | 1983 |
The first Topps | Stuart Williams and |
Tiles opens in | Barry Bester rapidly |
Manchester, | expand the Tile |
owned by Ted | Kingdom empire in |
Derbyshire | the South |
1990 | 1997 | |
Tile Kingdom buys and | Topps Tiles | |
becomes Topps Tiles, | becomes a Plc | |
creating 40 stores | ||
across the UK |
2005 | 2007 |
The Topps Tiles | Topps Tiles sponsors |
estate reaches | Leicester City |
250 stores | Football Club and |
we launch our | |
Youth Sponsorship | |
programme |
04 TOPPS TILES PLCANNUAL REPORT AND ACCOUNTS 2023
BUSINESS
OVERVIEW
Celebrating 60 Years
of Inspiring Customers
Through Our Love of Tiles
1999 2003 2004
The Topps Tiles estate | We win Plc of the |
reaches 100 stores | year award |
We win Plc of the year award - again!
2008
The Topps Tiles transactional website launches. Help for Heroes becomes our chosen charity
Read more about our 60 years on the next page
TOPPS TILES PLCANNUAL REPORT AND ACCOUNTS 2023 | 05 |
Celebrating 60 Years of Inspiring Customers Through Our Love of Tiles continued
2010 | 2011 | |
We become | Topps Tiles | |
national sponsor | opens a brand | |
of the ITV weather | new 50,000 sq ft | |
warehouse to fulfil | ||
online orders |
2017 | 2018 | ||
We enter the | Winner of | ||
commercial | The Tile | ||
market with the | Association's | ||
acquisition of | Excellence in | ||
Parkside | Retail Award |
2020
We become the main shirt sponsors of the Leicester Tigers rugby club
06 TOPPS TILES PLCANNUAL REPORT AND ACCOUNTS 2023
BUSINESS OVERVIEW
2022
After raising £1.2 million for Macmillan, colleagues vote to start a new partnership Alzheimer's Society; Topps Tiles Plc grows further with purchase of Pro Tiler Tools in March, and launches Tile Warehouse in May
2015
Topps Tiles announces charity partnership with Macmillan Cancer Support and goes on to raise over £1 million over seven years
2019
Matt Williams steps down after 12 years as Chief Executive and Rob Parker succeeds him; acquisition of Strata Tiles
2023
Topps Tiles turns 60, and starts the year by opening its first eco-mindful store in Guildford
TOPPS TILES PLCANNUAL REPORT AND ACCOUNTS 2023 | 07 |
Introducing Topps Group
ROB PARKER
Chief Executive
2023 has been a key year for Topps Group. We have celebrated our 60th anniversary, delivered our third consecutive year of record levels of sales and achieved our 20% market share goal ("one-in-five by 2025") two years ahead of schedule. We are now trading
in three related sectors - our omni-channel, market leading Topps Tiles business, our online pure play tile and consumable operations (Pro Tiler Tools and Tile Warehouse), and our commercial market-focused offer (Parkside). The purpose of our new Group identity is to encourage our stakeholders to recognise the business that we now are and also the strategic journey we are on. These stakeholders principally fall into three groups - our colleagues, our suppliers and our Shareholders.
When colleagues join us we would like them to be excited about joining our Group rather than just one part of our operations, and to recognise that the Group can offer them many and varied career opportunities over the time they spend with us. Being a bigger business means we can now provide opportunities to our colleagues that weren't possible just a few years ago.
For our suppliers - supplying the Group now offers more possibilities than were previously available to them.
Our commercial terms will be negotiated on a Group-wide basis wherever possible. The growth we have delivered in the scale of our operations is exciting to our suppliers, facilitates their growth, and provides more opportunities for us to work with them in an even more efficient manner.
Welcome to our 2023 Annual Report and our new Group branding. As our business has continued to develop and diversify over recent years, we now think of ourselves as a much broader organisation and have decided that now is the time to fully embrace our Group structure and develop a brand that reflects this.
For our existing and prospective Shareholders, Topps Group encapsulates our ambition and our strategy for our business - to become a diverse ranges of businesses, each of which have our core specialism of tiles (and closely associated accessories) at the heart of everything we do, all delivered through world-class levels of customer service.
In making this change, we haven't forgotten our rich heritage. Topps Tiles has been proudly serving UK consumers since 1963, is the clear UK market-leading business in the domestic tile market, and remains the mainstay of our operations. We celebrate this heritage by retaining the key part of our name in the new branding - Topps Group.
With my very best wishes,
ROB PARKER
Chief Executive, Topps Group
08 TOPPS TILES PLCANNUAL REPORT AND ACCOUNTS 2023
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Topps Tiles plc published this content on 20 December 2023 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 20 December 2023 15:39:32 UTC.