REG - Topps Tiles - Final Results <Origin Href="QuoteRef">TPT.L</Origin> - Part 4
25/11/2014 08:50
- Part 4: For the preceding part double click ID:nRSY8673Xc
2014 2013
£'000 £'000
Authorised 240,000,000 (2013: 240,000,000) ordinary shares of 3.33p each (2013: 3.33p) 8,000 8,000
Authorised 37,000,000 (2013: 37,000,000) redeemable B shares of £0.54 each 19,980 19,980
Authorised 124,890,948 (2013: 124,890,948) irredeemable C shares of £0.001 each 125 125
28,105 28,105
Issued and fully-paid 193,636,240* (2013: 192,127,669*) ordinary shares of 3.33p each (2013: 3.33p) 6,455 6,404
Total 6,455 6,404
During the period the Group issued 1,508,571 (2013: 274,959) ordinary shares with a nominal value of £50,286 (2013: £9,156)
under share option schemes for an aggregate cash consideration of £438,111 (2013: £20,307).
* During the period £500,000 (2013: £191,000) shares were purchased by Topps Tiles Employee Benefit Trust on behalf of the
Group.
20 Share premium
2014 2013£'000
£'000
At start of period 1,492 1,481
Premium on issue of new shares 387 11
At end of period 1,879 1,492
21 Own shares
2014 2013£'000
£'000
At start of period (10) (4)
Acquired in the period (650) -
Issued in the period - (6)
Disposed of on issue in the period 4 -
At end of period (656) (10)
A subsidiary of the Group holds 923,000 (2013: 313,000) shares with a nominal value of £31,000 (2013: £10,000) and
therefore these have been classed as own shares.
22 Merger reserve
2014 2013£'000
£'000
At start and end of period (399) (399)
The merger reserve arose on pre 2006 acquisitions, the Directors do not consider this to be distributable as at 27
September 2014.
23 Share-based payment reserve
2014 2013£'000
£'000
At start of period 649 566
Credit to equity for equity-settled share based payments 1,292 83
At end of period 1,941 649
The share-based payment reserve has arisen on the fair valuation of save as you earn schemes and Long-term incentive plans.
The Directors do not consider this to be distributable as at 27 September 2014.
24 Capital redemption reserve
2014 2013£'000
£'000
At start and end of period 20,359 20,359
The capital redemption reserve arose on the cancellation of treasury shares and as a result of a share reorganisation in
2006. The Directors do not consider this to be distributable as at 27 September 2014.
25 Retained earnings
£'000
At 29 September 2012 (45,746)
Dividends (note 8) (2,396)
Deferred tax on sharesave scheme taken directly to equity 319
Net profit for the period 9,144
At 28 September 2013 (38,679)
Dividends (note 8) (3,175)
Deferred tax on sharesave scheme taken directly to equity 606
Net profit for the period 12,512
At 27 September 2014 (28,736)
26 Financial commitments
a) Capital commitments
At the end of the period there were capital commitments contracted of £164,000 (2013: £200,000).
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 £652,000 (2013: £210,000). At the period end there were no outstanding contributions
(2013: same).
c) Lease commitments
Minimum future sublease payments expected to be received under non-cancellable subleases amount to £2,652,000 (2013:
2,238,000).
The Group has entered into non-cancellable operating leases in respect of motor vehicles, equipment and land and
buildings.
Minimum lease payments under operating leases recognised as an expense for the period were £21,168,000 (2013: £20,629,000)
which includes property service charges of £767,000 (2013: £707,000).
At the balance sheet date, the Group had outstanding commitments for future minimum lease payments under non-cancellable
operating leases which fall due as follows:
2014 2013
Land and Land and
buildings Other buildings Other
£'000 £'000 £'000 £'000
- within 1 year 19,936 868 20,270 1,321
- within 2 - 5 years 66,554 949 67,540 953
- after 5 years 58,285 - 65,884 -
144,775 1,817 153,694 2,274
Operating lease payments primarily represent rentals payable by the Group for certain of its office and store properties.
Leases are negotiated for an average term of 15 years and rentals are fixed for an average of 5 years (2013: 5).
27 Share-based payments
The Group operates seven share option schemes in relation to Group employees.
Share based payment plans
Employee share purchase plans are open to almost all employees and provide for a purchase price equal to the daily average
market price on the date of grant, less 20%. The shares can be purchased during a two-week period each financial period.
The shares so purchased are generally placed in the employee share savings plan for a 3 or 5 year period.
Movements in share based payment plan options are summarised as follows:
2014Number of share options 2014Weighted average exercise price 2013 Number of share options 2013 Weighted average exercise price
£ £
Outstanding at beginning of period 3,352,424 0.37 1,972,894 0.32
Issued during the period 910,851 0.98 2,029,575 0.43
Expired during the period (269,528) 0.31 (553,079) 0.46
Exercised during the period (1,508,571) 0.29 (96,966) 0.17
Outstanding at end of period 2,485,176 0.63 3,352,424 0.37
Exercisable at end of period 2,485,176 0.63 3,352,424 0.37
The inputs to the Black-Scholes Model for the above 3 and 5 year plans are as follows:
2014 2013
Weighted average share price - pence 79.0 45.9
Weighted average exercise price - pence 63.2 36.7
Expected volatility (3 & 5 years) - % 42.2 and 43.7 48.1 and 63.6
Expected life - years 3 or 5 3 or 5
Risk - free rate of interest - % 0.60 0.34
Dividend yield - % 2.79 3.18
Expected volatility was determined by calculating the historical volatility of the Group's share price over the previous 3
or 5 years (2013: 3 or 5 years). The expected risk used in the model has been adjusted, based on management's best
estimate, for the effects of non-transferability, exercise restrictions and behavioural forces.
Deferred bonus long-term incentive plan
During the financial period ended 28 September 2013 an award was made under the deferred bonus long term incentive plan
(LTIP) for the Senior Management Team. Under this bonus scheme 25% of the award (net of tax) is deferred in the form of
shares for a two year period, with a matching share award (on a gross basis) that vests at the end of two years subject to
the achievement of performance conditions relating to continuing employment within the business and EBITDA earnings growth
measured over the two year period.
This scheme was replaced in January 2013 when a new Long Term Incentive Plan was approved by shareholders and as such there
will be no further awards under this scheme.
The total number of shares awarded was 191,084, and the fair value of these deferred shares as at 27 September 2014 was
£88,000 (2013: £81,000).
The total number of matching shares that are expected to be awarded, subject to fulfilment of the performance conditions is
363,614 and the fair value of these matching shares as at 27 September 2014 was £167,000 (2013: £163,000). No options were
granted or exercised during the period (2012: None). There were no options outstanding at 27 September 2014.
The inputs to the Black-Scholes Model are as follows:
2014 2013
Weighted average share price - pence 46.0 50.5
Weighted average exercise price - pence - -
Expected volatility - % 36.9 43.8
Expected life - years 2 2
Risk - free rate of interest - % 0.3 0.3
Expected volatility was determined by calculating the historical volatility of the Group's share price over the 2012/13 and
2013/14 financial periods (2013: 2011/12 and 2012/13 financial period). The expected risk used in the model has been
adjusted, based on management's best estimate, for the effects of non-transferability, exercise restrictions and
behavioural forces.
Long Term Incentive Plan
During the prior financial period, a new three year Long Term Incentive plan was approved by shareholders. Under this plan
a number of share options were granted to senior management. These options will vest in December 2015 subject to the
achievement of certain performance criteria.
The total number of share options granted was 2,073,474 and the fair value of these options as at 27 September 2014 was
£929,000 (2013: £nil).
The inputs to the Black-Scholes Model are as follows:
2014 2013
Weighted average share price - pence 46.3 -
Weighted average exercise price - pence - -
Expected volatility - % 42.2 -
Expected life - years 3 -
Risk - free rate of interest - % 0.6 -
Expected volatility was determined by calculating the historical volatility of the Group's share price over the 2011/12,
2012/13 and 2013/14 financial periods (2013: 2010/11, 2011/12 and 2012/13 financial period). The expected risk used in the
model has been adjusted, based on management's best estimate, for the effects of non-transferability, exercise restrictions
and behavioural forces.
During the financial period, a further three year Long Term Incentive plan was approved by shareholders. Under this plan a
number of share options were granted to senior management. These options will vest in December 2016 subject to the
achievement of certain performance criteria.
The total number of share options granted was 1,532,730 and the fair value of these options as at 27 September 2014 was
£1,351,000.
The inputs to the Black-Scholes Model are as follows:
2014
Weighted average share price - pence 93.2
Weighted average exercise price - pence -
42.2
Expected life - years 3
Risk - free rate of interest - % 1.2
Expected volatility was determined by calculating the historical volatility of the Group's share price over the 2011/12,
2012/13 and 2013/14 financial periods. The expected risk used in the model has been adjusted, based on management's best
estimate, for the effects of non-transferability, exercise restrictions and behavioural forces.
Management Options
During the prior period members of the Management team were granted share options that are due to vest in October 2015,
subject to the fulfilment of criteria. The number of shares that are expected to be awarded is 260,000 (2013: 290,000) and
the fair value of these shares as at 27 September 2014 was £127,000 (2013: £138,000).
The inputs to the Black-Scholes Model are as follows:
2014 2013
Weighted average share price - pence 46.3 55.0
Weighted average exercise price - pence - -
Expected volatility - % 42.2 48.1
Expected life - years 3 3
Risk - free rate of interest - % 0.56 0.54
Expected volatility was determined by calculating the historical volatility of the Group's share price over the 2011/12,
2012/13 and 2013/14 financial periods. The expected risk used in the model has been adjusted, based on management's best
estimate, for the effects of non-transferability, exercise restrictions and behavioural forces.
In total, the Group recognised a total expense of £1,292,000 (2013: £83,000) relating to share based payments.
28 Related party transactions
S.K.M. Williams is a related party by virtue of his 10.7% shareholding (20,593,950 ordinary shares) in the Group's issued
share capital (2013: 10.7% shareholding of 20,593,950 ordinary shares).
At 27 September 2014 S.K.M. Williams was the landlord of three properties leased to Multi Tile Limited, a trading
subsidiary of Topps Tiles Plc, for £162,000 (2013: four properties for £208,000) per annum.
No amounts were outstanding with S.K.M. Williams at 27 September 2014 (2013: £nil).The lease agreements on all properties
are operated on commercial arm's length terms
Transactions between the Company and its subsidiaries, which are related parties, have been eliminated on consolidation and
are not disclosed in this note. In accordance with the exemption available under IAS24.
The remuneration of the Board of Directors, who are considered key management personnel of the Group was £1.6 million
(2013: £1.1 million) as well as share based payments of £nil (2013: £44,000). Further information about the remuneration
of the individual Directors is provided in the Remuneration Report in the Annual Report.
Company balance sheet as at 27 September 2014
52 weeks ended2014 52 weeks ended 2013
Notes £'000 £'000
Fixed assets
Investments 3 3,059 2,959
__________ __________
Current assets
Debtors due within one year 4 5,306 3,156
Debtors due after one year 4 123,200 123,200
Cash at bank and in hand 18,689 14,784
__________ __________
147,195 141,140
Creditors: Amounts falling due within one year 5 (5,197) (1,387)
__________ __________
Net current assets 141,998 139,753
__________ __________
Net assets 145,057 142,712
__________ __________
Capital and reserves
Called-up share capital 6,7 6,455 6,404
Share premium 7 1,879 1,492
Share based payment reserve 7 1,945 649
Capital redemption reserve 7 20,359 20,359
Other reserve 7 6,200 6,200
Profit and loss account 7 108,219 107,608
__________ __________
Equity shareholders' funds 145,057 142,712
__________ __________
The financial statements of Topps Tiles Plc, Companies House number 3213782, were approved by the board of directors and
signed on its behalf by:
M T M WilliamsDirector R ParkerDirector
1 Basis of accounting
The separate financial statements of the Company are presented as required by the Companies Act 2006. They have been
prepared under the historical cost convention and in accordance with United Kingdom Accounting Standards and law.
Based on a detailed review of the risks and uncertainties discussed within the Strategic and Operational Review, and
management's current expectations the Board believes that the Company will continue to meet all of its financial
commitments as they fall due and will be able to continue as a going concern.
The current economic climate creates a degree of uncertainty 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 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 retained profit for the financial period ended 27 September 2014 of
£611,000 (2013: £100,711,000 loss). In the prior period, following a review of the projected cash flows relating to this
company and its subsidiaries an impairment of £98,000,000 was recognised against the intercompany receivable.
The auditor's remuneration for services to the company was £40,000 for audit related work (2013: £50,000 for audit related
work). Fees relating to non-audit work totalled £nil (2013: £nil), see note 4 to the Group financial statements for
further details.
The Company had no other employees other than the Directors (2013: same), whose remuneration is detailed in the Annual
Report.
3 Fixed asset investments
Shares
£'000
At 28 September 2013 2,959
Movement in share options granted to employees 100
At 27 September 2014 3,059
The Company has investments in the following subsidiaries which principally affected the profits or net assets of the
Group. To avoid a statement of excessive length, details of investments which are not significant have been omitted.
Subsidiary undertaking % of issued shares held Principal activity
Topalpha Limited* 100% Property management and investment
Multi Tile Limited 100% Retail and wholesale of ceramic tiles, wood flooring and related products
Topps Tiles Holdings* 100% Intermediate holding company.
Topps Tiles (UK) 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.
*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
2014 2013
£'000 £'000
Amounts falling due within one year:
Amounts owed by subsidiary undertakings 5,253 2,977
Other debtors 36 166
Prepayments and accrued income 17 13
5,306 3,156
Amounts falling due after one year:
Amounts owed by subsidiary undertaking 123,200 123,200
In the prior period, following a review of the projected cash flows relating to this company and its subsidiaries an
impairment of £98,000,000 was recognised against the intercompany receivable. No such charge has been recognised in the
current period.
In respect of the deferred bonus share award, a deferred tax asset has not been recognised as it is probable that there
will be insufficient suitable profits arising when the shares are awarded against which to relieve the deduction.
5 Creditors: Amounts falling due within one year
2014 2013
£'000 £'000
Trade and other creditors 17 17
Amounts owed to subsidiary undertakings 2,796 251
Accruals and deferred income 2,384 1,119
5,197 1,387
6 Called-up share capital
2014 2013
£'000 £'000
Authorised 240,000,000 (2013: 240,000,000) ordinary shares of 3.33p each (2013: 3.33p) 8,000 8,000
Authorised 37,000,000 (2013: 37,000,000) redeemable B shares of £0.54 each 19,980 19,980
Authorised 124,890,948 (2013: 124,890,948) irredeemable C shares of £0.001 each 125 125
28,105 28,105
Issued and fully-paid 193,636,240 (2013: 192,127,669) ordinary shares of 3.33p each (2013: 3.33p) 6,455 6,404
* During the period 441,594 (£500,000) shares were purchased by Topps Tiles Employee Benefit Trust on behalf of the Group.
During the period the Group allotted 1,508,571 (2013: 274,959) ordinary shares with a nominal value of £50,286 (2013:
£9,156) under share option schemes for an aggregate cash consideration of £438,111 (2013: £20,307).
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 28 September 2013 6,404 1,492 649 20,359 6,200 107,608 142,712
Loss for the period - - - - - (164) (164)
Dividend paid to equity shareholders - - - - - (3,175) (3,175)
Dividends received from Group Companies - - - - - 3,950 3,950
Issue of new shares 51 387 - - - - 438
Credit to equity for equity-settled share based payments - - 1,296 - - - 1,296
At 27 September 2014 6,455 1,879 1,945 20,359 6,200 108,219 145,057
At 27 September 2014, the Directors consider the other reserve of £6,200,000 to remain non distributable.
The Directors consider £105,106,000 (2013: £105,106,000) of profit and loss account reserves not to be distributable at 27
September 2014. This arose on an unrealised gain on the intragroup disposal of subsidiary companies, an impairment has been
recognised against the related intercompany balance in the prior period.
Five year record
UNAUDITED
53 weeksended2 October 2010 52 weeks ended 1 October2011 52 weeksended29 September 2012 52 weeks ended 28 September 2013 52 weeks ended 27 September 2014
£'000 £'000 £'000 £'000 £'000
Group revenue 183,420 175,525 177,693 177,849 195,237
Group operating profit 20,899 13,980 15,462 13,845 18,186
Profit before taxation 13,397 7,908 12,493 10,601 16,691
Shareholders' funds (deficit) (28,530) (25,462) (17,348) (10,184) 843
Basic earnings per share 5.37p 3.04p 5.14p 4.76p 6.49p
Dividend per share - 1.50p 1.10p 1.25p 1.65p
Dividend cover - 1.92 4.68 3.17 3.94
Average number of employees 1,615 1,661 1,654 1,720 1,794
Share price (period end) 60.0p 34.0p 46.0p 93.0p 105.0p
All figures quoted are inclusive of continued and discontinued operations.
This information is provided by RNS
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