REG - Topps Tiles - Annual Financial Report <Origin Href="QuoteRef">TPT.L</Origin> - Part 4

Topps TilesAnnouncement

01/12/2015 07:11

- Part 4: For the preceding part double click  ID:nRSA4576Hc 

in the outlook which when combined with the financial
covenants included in our loan facilities, has led the Board to conduct a detailed review of a number of different trading
scenarios, including reasonably possible downsides, as well as  possible mitigating actions, should they be required. 
 
Based on this analysis the Board has concluded that the Company would be able to fully meet all of its financial
commitments for the foreseeable future and therefore consider it appropriate to prepare the financial statements on the
going concern basis. 
 
There have been no changes to the principal accounting policies in the period, all of which have been applied consistently
throughout the period and the preceding period. 
 
The Company issues equity settled share based payments to certain employees. Equity settled share based payments are
measured at fair value at the date of grant. 
 
Fixed asset investments are shown at cost less provision for impairment. 
 
The Company has taken advantage of the exemption in FRS 8 from disclosing transactions with other members of the Group and
the exemption in FRS 29 for making disclosures relating to financial instruments. 
 
2          Loss 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 loss for the financial period ended 3 October 2015 of £102,844,000
(2014: £611,000 profit), as a result of the impairment of inter-company investments in Topps Tiles Holdings Limited of
£105,100,000 (2014: £nil) 
 
The auditor's remuneration for services to the company was £40,000 for audit related work (2014: £40,000 for audit related
work).  Fees relating to non-audit work totalled £nil (2014: £nil), see note 4 to the Group financial statements for
further details. 
 
The Company had no other employees other than the Directors (2014: same), whose remuneration is detailed in the Annual
Report. 
 
3          Fixed asset investments 
 
                                                            Shares   
                                                            £'000    
 At 27 September 2014                                       3,059    
 Movement in share options granted to employees             179      
 Impairment of investment in Topps Tiles Holdings*          (2,745)  
                                                                     
 At 3 October 2015                                          493      
                                                                     
 
 
*During the period the Group undertook a corporate restructuring process, leading to the acquisition of Topps Tiles (UK)
Limited by Tiles4Less Limited. Following an impairment review, the directors decided that the investment held by Topps
Tiles Plc in the intermediary holding company of Topps Tiles (UK) Limited (Topps Tiles Holdings Limited) could not be
supported. The subsequent impairment charge of £2,745,000 has been utilised against the non-distributable reserves held in
the company. 
 
The Company has investments in the following subsidiaries which affected the profits or net assets of the Group. 
 
 Subsidiary undertaking               % of issued shares held  Principal activity                                                                
 Topalpha Limited*                    100%                     Property management and investment                                                
 Acraman (318) Limited                100%                     Dormant                                                                           
 Acraman (319) Limited                100%                     Dormant                                                                           
 Topalpha (Orpington) Limited         100%                     Dormant                                                                           
 Topalpha (Rhyl) Limited              100%                     Dormant                                                                           
 Topalpha (Warehouse) Limited         100%                     Property management and investment and provision of warehousing services          
 Topalpha (Stoke) Limited             100%                     Property management and investment.                                               
                                                                                                                                                 
 Tiles4Less Limited*                  100%                     Intermediate holding company                                                      
 Topps Tiles (UK) Limited             100%                     Retail and wholesale of ceramic tiles, wood flooring and related products         
 Topps Tiles Holdings Limited*        100%                     Intermediate holding company                                                      
 Topps Tile Kingdom Limited           100%                     Intermediate holding company                                                      
 Multi Tile Limited                   100%                     Retail and wholesale of ceramic tiles, wood flooring and related products         
 Topps Tiles Distribution Ltd         100%                     Wholesale and distribution of ceramic tiles, wood flooring and related products.  
 Multi-Tile Distribution Limited      100%                     Intermediate holding company.                                                     
 Topps Tiles I.P Company Limited      100%                     Ownership and management of Group intellectual property.                          
 Circuitcourt Limited                 100%                     Dormant                                                                           
 Best4Tiles Limited*                  100%                     Dormant                                                                           
 Topps Tiles Employee Benefit Trust*  100%                     Employee benefit trust                                                            
 Topps Tiles Quest Trustee Limited*   100%                     Dormant                                                                           
                                                                                                                                                 
                                                                                                                                                 
 
 
*held directly by Topps Tiles Plc 
 
The investments are represented by ordinary shares. 
 
All undertakings are incorporated in Great Britain and are registered and operate in England and Wales. 
 
4          Debtors 
 
                                              2015    2014     
                                              £'000   £'000    
 Amounts falling due within one year:                          
 Amounts owed by subsidiary undertakings      10,035  5,253    
 Other debtors                                3       36       
 Prepayments and accrued income               516     17       
                                                               
                                              10,554  5,306    
                                                               
 Amounts falling due after one year:                           
 Amounts owed by subsidiary undertaking       20,840  123,200  
                                                               
 
 
An impairment review was conducted, following the corporate restructuring process detailed in note 3. This resulted in a
decision by the directors that the inter-co debtor held by the company with Topps Tiles Holdings Limited could not be fully
supported. The subsequent impairment charge of £102,359,799 has been utilised against the non-distributable reserves held
in the company 
 
5          Creditors: Amounts falling due within one year 
 
                                              2015   2014   
                                              £'000  £'000  
 Trade and other creditors                    560    17     
 Amounts owed to subsidiary undertakings      222    2,796  
 Accruals and deferred income                 2,633  2,384  
                                                            
                                              3,415  5,197  
                                                            
                                                            
 
 
6          Called-up share capital 
 
                                                                                                    2015    2014    
                                                                                                    £'000   £'000   
 Authorised 240,000,000 (2014: 240,000,000) ordinary shares of 3.33p each (2014: 3.33p)             8,000   8,000   
 Authorised 37,000,000 (2014: 37,000,000) redeemable B shares of £0.54 each                         19,980  19,980  
 Authorised 124,890,948 (2014: 124,890,948) irredeemable C shares of £0.001 each                    125     125     
                                                                                                                    
                                                                                                    28,105  28,105  
                                                                                                                    
 Issued and fully-paid 193,700,459 (2014: 193,636,240) ordinary shares of 3.33p each (2014: 3.33p)  6,457   6,455   
                                                                                                                    
 
 
* During the period 431,108 (£504,000) shares were purchased by Topps Tiles Employee Benefit Trust on behalf of the Group
(2014: 441,594 shares - £500,000). 
 
During the period the Group allotted 64,219 (2014: 1,508,571) ordinary shares with a nominal value of £2,141 (2014:
£50,286) under share option schemes for an aggregate cash consideration of £28,733 (2014: £438,111). 
 
7          Reserves 
 
 Company                                                                     Share based  Capital               Profit                
                                                           Share    Share    payment      redemption  Other     and loss              
                                                           capital  premium  reserve      reserve     reserves  account    Total      
                                                           £'000    £'000    £'000        £'000       £'000     £'000      £'000      
 At 27 September 2014                                      6,455    1,879    1,945        20,359      6,200     108,219    145,057    
 Loss for the period                                       -        -        -            -           -         (203)      (203)      
 Dividend received from Group companies                    -        -        -            -           -         6,999      6,999      
 Dividend paid to equity shareholders                      -        -        -            -           -         (4,535)    (4,535)    
 Write down of investment                                  -        -        -            -           -         (105,105)  (105,105)  
 Issue of new shares                                       2        27       -            -           -         -          29         
 Credit to equity for equity-settled share based payments  -        -        1,409        -           -         -          1,409      
                                                                                                                                      
 At 3 October 2015                                         6,457    1,906    3,354        20,359      6,200     5,375      43,651     
                                                                                                                                      
 
 
At 3 October 2015, the Directors consider the other reserve of £6,200,000 to remain non distributable. 
 
The Directors consider £nil (2014: £105,106,000) of profit and loss account reserves not to be distributable at 3 October
2015. The prior period amount arose on an unrealised gain on the intragroup disposal of subsidiary companies. An impairment
has been recognised against the related intercompany investment balance in the current period. 
 
Five year record 
 
UNAUDITED 
 
                                52 weeks ended 1 October2011  52 weeksended29 September            2012  52 weeks ended 28 September 2013  52 weeks ended 27 September 2014  53 weeks ended 3 October 2015  
                                £'000                         £'000                                      £'000                             £'000                             £'000                          
 Group revenue                  175,525                       177,693                                    177,849                           195,237                           212,221                        
 Group operating profit         13,980                        15,462                                     13,845                            18,186                            18,883                         
 Profit before taxation         7,908                         12,493                                     10,601                            16,691                            17,019                         
 Shareholders' funds (deficit)  (25,462)                      (17,348)                                   (10,184)                          843                               10,798                         
 Basic earnings per share       3.04p                         5.14p                                      4.76p                             6.49p                             6.75p                          
 Dividend per share             1.50p                         1.10p                                      1.25p                             1.65p                             2.34p                          
 Dividend cover                 1.92                          4.68                                       3.17                              3.94                              2.88                           
 Average number of employees    1,661                         1,654                                      1,720                             1,794                             1,915                          
 Share price (period end)       34.0p                         46.0p                                      93.0p                             105.0p                            148.75p                        
 
 
All figures quoted are inclusive of continued and discontinued operations. 
 
 1  A full explanation of the NPS methodology and associated scores can be found within the KPIs section of this report. 
 
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