REG - Topps Tiles - Interim Financial Report
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RNS Number : 3006J Topps Tiles PLC 20 May 2025
20 May 2025
Topps Tiles Plc
Interim Financial Report
Topps Tiles Plc ("Topps Group", the "Company" or the "Group"), the UK's
leading tile specialist, announces its unaudited consolidated interim
financial results for the 26 weeks ended 29 March 2025.
Strategic and Operational Highlights
• Good progress in all five key growth areas driving 'Mission 365' in first
half:
• Modernise the trade digital experience: Trade digital experience continues to
improve - trade traffic in Topps Tiles up four-fold, online trade sales up 85%
and total trade sales up 12%
• Expand into new coverings categories: Sales in new coverings categories up 17%
and gross profit up 30% year-on-year as roll out continues
• Business-to-business sales focus: CTD acquisition provides complementary,
differentiated brand positions across four Group brands - Topps Tiles, Pro
Tiler Tools, CTD and Parkside
• Pro Tiler Tools: Pro Tiler Tools sales up 17.6%, now three times higher than
levels at acquisition, and new warehouse fully operational
• Tile Warehouse: Tile Warehouse sales doubled year-on-year and is the UK's
fastest growing tile specialist
• CMA investigation into CTD acquisition concluded with minimal competition
concerns identified
• Investment in future growth continuing at pace, with medium-term warehousing
needs secured, marketing platforms launched before year-end, and core systems
replacement programme underway
• Topps Tiles delivering world class customer service, with 27,000 Google
reviews in H1 at an average score of 4.92 stars
• Group online sales increased to 19.8% from 17.3% in H1 2024
• CEO recruitment process continues with good progress, announcement expected in
H2 FY25 with a planned transition
Financial Summary
• Adjusted* sales up 4.1% to £127.8 million, with an improving trend across the
first and second quarters
• Adjusted* gross profit up 3.0% to £68.2 million, with adjusted gross margins
sequentially higher in H1 FY25 than H2 FY24 despite higher trade mix, due to
due to good operational controls and strong margin management
• Adjusted* operating costs up just £1.0 million (+1.6%) despite £2.0 million
of inflationary costs and £1.5 million of investment into strategic growth
due to other net savings
• Adjusted* profit before tax up 3.2% at £3.2 million
• Adjusted* EPS up 8.7% as a result of full ownership of Pro Tiler from H2 2024
• CTD annualised sales of £30.3 million, with H1 underlying trading losses of
£1.0 million. The business is not yet fully integrated due to the CMA
investigation but there is a clear plan to move into breakeven by quarter
four.
• Statutory revenue up 16.4% to £142.9 million, including sales from CTD
business
• Statutory profit before tax £1.9 million (HY 2024: loss before tax of £1.5
million) including CTD trading losses, CMA-related costs and benefit of lower
depreciation from impairments in FY 2024
• Balance sheet remains robust, with adjusted net debt of £1.2m at the period
end, and £30 million banking facility committed until October 2027
• Interim dividend of 0.8 pence declared in line with policy, and full year
dividend to be at least consistent with FY 2024
* The financial impact of CTD has been excluded from adjusted measures in FY
2025.
Current Trading and Outlook
• Strong start to the second half, with Group adjusted sales in the first seven
weeks up 9.5% year-on-year
• Topps Tiles like-for-like sales are up 6.2% and growth in other areas of the
business has accelerated
• The business is well-positioned to deliver sales and profit growth this year
through our differentiated offers and strong strategic execution
Commenting on the results, Rob Parker, Chief Executive said:
"I am pleased with the progress we have made over the first half, which has
included an improving sales trend, offsetting the majority of our inflationary
cost pressures, and continuing to deliver our strategy; while also delivering
a small increase in underlying profitability. We have recently announced the
conclusion of the CMA investigation into our acquisition of CTD, which will
form a major part of the business-to-business element of our growth strategy
moving forwards.
As we look forward to the second half, current trading shows a strong
improvement in both our market leading omni-channel business, Topps Tiles, and
also in the newer parts of the Group; and we have a clear plan to move CTD
into profitability by the final quarter of our financial year and into growth
beyond that. As a result, we expect our full year profits to show a
meaningful improvement over the prior year."
Notes
Adjusted items are Alternative Performance Measures which are used by Group
management to plan for, control and assess the performance of the Group.
These measures are not defined by IFRS and therefore a reconciliation between
each APM and the nearest IFRS measure is presented in the most recent Annual
Report and Accounts. Topps Tiles like-for-like revenue is defined as sales
from Topps Tiles stores that have been trading for more than 52 weeks and
online sales made through the Topps Tiles brand (only). Adjusted sales and
profit metrics exclude the impact of items which are either one-off in nature
or fluctuate significantly from year to year, described in the Financial
Review section of this document. In this period, the performance of CTD has
been excluded from adjusted metrics due to the ongoing disruption caused by
the CMA investigation. Adjusted net debt is defined as bank loans before
unamortised issue costs, less cash and cash equivalents, as at the balance
sheet date. It excludes lease liabilities under IFRS 16.
For further information please contact:
Topps Tiles Plc (20/5/25) 020 7638 9571
Rob Parker, CEO (Thereafter) 0116 282 8000
Stephen Hopson, CFO
Citigate Dewe Rogerson 020 7638 9571
Kevin Smith/Angharad Couch
INTERIM MANAGEMENT REPORT
Topps Group is the largest specialist distributor of tiles and related
products in the UK. Approximately 75% of sales across the Group are made to
trade customers, including tilers, general builders and contractors, with the
remaining 25% to domestic homeowners. The majority of the Group's sales are
ultimately related to work in the domestic repair, maintenance and improvement
(RMI) sector, with the balance of sales relating to commercial projects,
infrastructure and new build housing.
The Group owns a number of brands which target different customer groups
within this market. The largest is Topps Tiles, the market-leading,
omni-channel brand, which was founded in 1963 and, with its rich history and
298 stores, has strong brand recognition across the UK, serving both trade and
homeowner customers. Pro Tiler Tools is the tile industry's leading online
pure play brand focused on trade customers, offering a wide range of
trade-focused essentials items and a deep product specialism, at
market-leading pricing. The Parkside brand operates in the commercial market
which includes tiles supplied across sectors such as leisure, retail,
hospitality, infrastructure and offices, where product specification is often
heavily influenced by the architect and designer community. Tile Warehouse
is an online pure play brand aimed at more budget-conscious homeowner
customers. CTD joined the Group in August 2024 and has over 50 years of
experience serving the trade, the commercial market, and the housebuilder
sector. Across the brand portfolio, the Group offers differentiated
physical, digital and direct selling offers to all customer types in the tile
market.
All of our brands derive benefit from the scale of the Group, 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 often access on an exclusive basis. Our strategy is
underpinned by our people strategy, which delivers world-class customer
service across the Group, our operational & digital excellence strategy,
including a high-quality, specialist supply chain and ongoing investment in
systems, and our environmental leadership strategy, including our goal of
being carbon neutral across Scope 1 and 2 emissions by 2030.
STRATEGIC AND OPERATIONAL REVIEW
A year ago, the Group launched its new goal, Mission 365, which was to
increase sales to £365m in the medium term, while achieving an adjusted
profit before tax margin of 8-10% at a Group level. Moreover, we stated that
every brand within the Group structure has the potential to deliver an 8-10%
adjusted profit before tax margin. This would imply a minimum profit level
for the Group of £30 million, an almost five-fold increase when compared to
profits in FY 2024.
Five key areas of growth were identified to deliver Mission 365. The
indicative sales uplifts we expect to deliver from the five growth areas,
together with a modest level of market recovery and business as usual price
growth, are as follows:
Revenue £m
Group adjusted sales in 2024 248
Market and business-as-usual pricing 10 - 20
Modernise the trade digital experience 15 - 20
Expand into new coverings categories 25 - 30
Business-to-business (B2B) sales focus 35 - 40
Pro Tiler expansion 20 - 25
Tile Warehouse maturity 10 - 15
Mission 365 (medium term) 365
As part of this new goal, we redefined the scope of the Group's operations and
the market in which we operate. The Group's core focus has traditionally
been tiles and closely associated products, a market valued at c. £1.2
billion in 2023. However, the Group already sells a variety of floor and
wall coverings products other than tiles, and the inclusion of these new
product categories, such as luxury vinyl tiles, outdoor tiles, shower panels,
splashbacks and more, expands the Group's addressable market to c. £2.1
billion. In summary, the Group is now focused on the wider market of all
hard wall and floor surface coverings, a large and exciting market, and one
which presents multiple opportunities for growth.
We expect the Group to deliver the following financial outcomes in the medium
term:
- Sales of £365 million, £117 million higher than adjusted sales in FY24
- Gross margins between 51% and 52%, depending on changes in business mix
- Adjusted profit before tax margin of 8-10%
- Substantial improvements in lease adjusted return on capital employed, given
only relatively modest changes to the store network and some investments in
supply chain and systems.
The most significant strategic progress towards this goal was made in August
2024 through the acquisition of the brand and certain assets of CTD, on which
more detail is given below. Updates on the other areas of the strategy are
given in the subsequent section.
CTD acquisition
On 19 August 2024, the Group acquired the brand and certain assets from CTD
Tiles Limited, which had fallen into administration, including all
intellectual property, CTD's Architectural & Designer (A&D) and
Housebuilder business, selected stock and a licence to occupy 30 CTD stores,
for consideration of £9 million. CTD had previously operated 86 stores, and
the majority of the other stores closed soon afterwards.
Following an initial enquiry from the Competition and Markets Authority (CMA),
on 3 October 2024 the CMA opened a Phase 1 investigation into the transaction
and served an Initial Enforcement Order (IEO) on the Group. The IEO, which
is usual in Phase 1 investigations, restricted the Group's management team
from running the CTD business or making further, necessary, integrations of
CTD into the wider Group in areas such as IT whilst the investigation was
ongoing. The implementation of these measures would have enabled the CTD
business to move back towards profitability and the delay impacted on the
performance of CTD in the first half.
In line with the stipulations of the IEO, a 'hold separate manager' was
engaged to run the CTD business with a 'monitoring trustee' also appointed to
report back to the CMA. The Group fully complied with the CMA process at all
times. Over the following months, the Group responded to a large number of
information requests and provided over 1,300 documents to the CMA. During
this time, the CMA did consent to CTD moving from their old warehouse in Kings
Norton, Birmingham, to the Group's new 140,000 sq ft warehousing facility in
the Prologis Park Pineham, near Northampton, which is also the home of Pro
Tiler Tools.
Following their Phase 1 review, the Group was pleased to note that the CMA did
not identify any competition concerns in 26 out of 30 CTD retail store
locations or in either the CTD A&D or Housebuilder businesses, which
operate on a national level. On 24 April 2025, the CMA announced that the
Group's proposal to dispose of four stores in areas where local competition
concerns had been identified had been accepted, resulting in the lifting of
the IEO and enabling the management team to regain control of the business,
almost seven months after the IEO was imposed. The Group is currently
working with the CMA to approve a proposed buyer of these four stores and,
once approval has been granted and subject to the granting of new property
leases and other consents, the Group will dispose of the stores and formally
end the CMA's involvement in the process. The cost of the CMA process has
been significant and is detailed in the financial review below.
On 24 April 2025, the Group regained control of the CTD business and has been
conducting business review, with the following conclusions:
- Overall investment thesis intact - the Group remains confident that CTD
represents a £30 million - £40 million sales opportunity and that the
business can operate within the Group's target 8-10% margin range for all its
brands.
- The stores have been stabilised after a period of substantial sales
declines. After four disposals relating to the CMA process and two closures
following a review of property leases, 24 stores remain. The CTD brand
retains significant heritage and brand recognition within the trade and, going
forwards, will be focused on larger trade customers and contractors. This
positioning differentiates CTD from the Topps Tiles brand, which in general
caters for smaller trade customers and homeowners.
- The housebuilder and A&D segments have suffered sales declines since
acquisition; however, they remain strategically important to the Group. The
A&D segment will be combined with Parkside to give that business more
scale, and the housebuilder segment will provide an entrance into an important
new market for the Group.
- Annualised sales remain at c. £30 million, within the range of our initial
expectations. Trading losses (excluding one-off costs and benefits) in the
first half were £1.0 million, however the Group will, in the coming weeks,
take action to move the business to at least breakeven in quarter four of this
year, including resolving price differentials with other Group brands,
delivering COGS synergies, and completing the integration of business
operations, thereby reducing cost overheads further.
Please see the financial review for a breakdown of the trading and non-trading
performance of CTD within H1 2025.
Strategic progress
1) Modernise the trade digital experience
Trade customers can offer repeat custom and act as brand ambassadors on behalf
of Topps Group to other traders and to homeowners. They may use the Group's
brands frequently, perhaps multiple times a week, compared to homeowners who
usually only come into the market once every few years, and as a result are
rewarded with advantaged pricing and enhanced support. As such, the Group
has had a strategy of increasing its trade mix over time. Following the
acquisition of CTD, approximately 75% of sales in Topps Group by value are to
trade customers, and trade mix within the Topps Tiles brand increased very
significantly in the first half, up 6.0 percentage points year on year to
67.4% of sales. This compares to c. 50% of sales ten years ago.
To drive further growth in trade revenues, Topps Group has been actively
improving its trade offer, in particular through Topps Tiles' digital
channels. Over the last year, the Topps Tiles team has made strong progress
with the initiatives identified twelve months ago, specifically, it has:
- Made improvements to the trade website, relaunching the Trade Club and
dramatically decreasing the complexity of the trader registration process;
- Improved pricing transparency on the website and in store;
- Increased the scale and focus of the trade credit offering;
- Begun work on a new Customer Engagement Platform (CEP) which will launch in
the second half of this year, which will allow us to communicate on a
personalised level with trade customers; and
- Agreed a partnership with an app developer as we move towards the launch of a
trade app in FY 2026, which will become the default platform for Topps Tiles
to engage with many of its trade customers, and enable, in time, a
modernisation of the brand's trade loyalty schemes
Specifically in relation to digital channels, there are early signs of
progress, with online trade traffic in Topps Tiles up approximately four-fold,
online trade sales up 85% in the first half and total sales to trade customers
up 12% year on year, with the number of active traders at the end of the
period up 11% year on year to 146,000.
We see a significant further opportunity to grow the number of registered
traders and improve share of wallet through further progress in the areas
listed above in the coming years, with a total opportunity of £15 - £20
million when compared to 2024 levels.
2) Expand into new coverings categories
As described above, the Group has redefined its addressable market to include
all hard wall or floor surface coverings, including products such as luxury
vinyl tiles, shower panels, outdoor tiles, laminate and engineered wood,
splashbacks, XXL porcelain, and acoustic panels. A 5-10% market share of
these categories would amount to over £50 million of incremental sales
compared to 2024 levels and we believe there exists at least a £25 - £30
million sales opportunity in these areas as part of Mission 365.
In the first half of this year, good initial progress has been made. The
outdoor tile range has been extended, splashbacks and shower panels have been
rolled out to all stores, a wood and laminate trial is underway in 43 stores
and both luxury vinyl tiles and acoustic panels are now direct-sourced,
significantly improving margin in these categories. Digital marketing has
been improved and colleague training has taken place. Overall, £4.6 million
of sales have been made across these categories in Topps Tiles, up 17% year on
year, with gross profit up 30%.
In addition, the Group has agreed a partnership with Wren Kitchens whereby
Topps Tiles products will be available in all Wren showrooms around the
country, to be ordered by Wren customers and fulfilled by Topps Tiles. This
partnership is modest in value so far but shows signs of having good
potential.
3) Business-to-business sales focus
The acquisition of CTD has significantly enhanced our B2B offering within the
Group. Four brands now cater for trade and professional customers, all of
which have complementary, differentiated market positions:
- Topps Tiles offers the convenience of 300 stores nationwide and digital
platforms, focusing on general builders and solus tile fitters.
- Pro Tiler Tools supplies fitters and smaller contractors buying consumable
items and technical tools through its modern digital channels, as well as a
direct selling team able to provide personal support to larger contractors.
- CTD will become a trade-only business, offering a physical store network and
supplying larger contractors and housebuilders, with a good depth of
consumables stock held in each location, an emphasis on professional tiling
brands and a more flexible delivery capability.
- Parkside is highly relevant for projects where the architect or designer is
the key influencer behind the coverings purchasing decision, and where bespoke
or technical products are required. Parkside have partnered with Material
Source, a key destination for interior designers, architects and property
professionals, with studios currently in Glasgow and Manchester, as they forge
closer links with the design community.
The CTD acquisition has already added c. £30 million of B2B sales to the
Group and, following the execution of the plan above, will contribute
materially above the £15 million - £25 million originally envisaged for B2B
sales growth in the Mission 365 plan.
4) Pro Tiler Tools
Pro Tiler Tools continues to take market share and deliver strong financial
results. In the six-month period, sales of £15.4 million were up 17.6% year
on year, with current sales levels three times higher than at the point of
acquisition in 2022. Growth has been delivered by continued operational
improvements, including an industry-leading sales cut-off of 9pm for next day
delivery, additional specialist recruitment in areas such as digital marketing
and new product launches including UK exclusives. The most significant
operational improvement in the first half saw the Pro Tiler business relocate
from a 50,000 square foot unit in Earls Barton, Northampton, to a 140,000
square foot unit in the Prologis Pineham business park, close to junction 15a
of the M1, which the business now shares with CTD. This facility will
support Pro Tiler as it continues to grow towards its £50 million revenue
goal.
5) Tile Warehouse
Tile Warehouse, our online pure play brand focused on selling coverings
products to value-conscious homeowners, was established in summer 2022 and
continues to grow well. Sales in the first half of £1.4 million were more
than double the previous year's result, and losses halved to £0.2 million.
With traffic up 31% in the first half and conversion also growing, Tile
Warehouse is the UK's fastest growing tile specialist.
The objective for this brand remains the same as when it was launched - to
establish a £15 million business within five years in the £100+ million UK
online pure play homeowner tile market.
Strategic enablers
The Group has begun its two-year programme of core systems upgrades. Working
with our chosen implementation partners, the business will implement Microsoft
Dynamics 365 Business Central across central functions, the Topps Tiles and
CTD store networks, and Parkside, in 2027. Pro Tiler Tools and Tile
Warehouse run on different systems and we will revisit their systems
architecture following the core systems upgrade.
Exceptional customer service remains critical to the delivery of our goal and
is fundamental to the success of all of our brands. Whilst continuing with
our internal 'tile talk' customer service metric and retaining world-class
scores in Topps Tiles (H1 2025: 91.2% overall satisfaction, H1 2024: 92.5%
overall satisfaction), this year we have targeted a significant increase in
Google store reviews. As a result of this focus, we have recorded 27,422
Google reviews in the period, compared to 1,399 reviews in the same period
last year. The average score cumulatively for the business is 4.92 stars,
improving local search results and giving potential customers, many of whom
would not have been in the market for tiles for a number of years, the
confidence to shop with us.
The Group's focus on digital operations extends across pure play brands such
as Pro Tiler Tools and Tile Warehouse to omni-channel operations such as Topps
Tiles. Overall, Group online sales increased by 2.5 percentage points from
17.3% in H1 2024 to 19.8% in H1 2025 and we expect this to continue to
increase in future years.
Summary
One year after the launch of the Mission 365 goal, the business has made
meaningful progress across all five strategic growth areas, and the
acquisition of CTD has materially accelerated progress towards the goal.
Underlying profitability is stable and will improve as operational leverage
comes through. There are many growth opportunities across all five strategic
growth areas, which are all still at an early stage, and we remain confident
on delivering the goal, leading to substantially improved financial outcomes,
in the medium term.
Key Performance Indicators ("KPIs")
As set out in our most recent Annual Report, the Board monitors a number of
financial and non-financial KPIs when reviewing the implementation of the
Group's strategy. Our performance in the 26 weeks to 29 March 2025 is set
out in the table below, together with the prior year performance data. One
KPI, total scope 1 and 2 net carbon emissions (tonnes per annum), is only
available on an annual basis and so is not disclosed here. The source of
data and calculation methods are consistent with those described in the 2024
Annual Report.
26 weeks to 26 weeks to YoY
29 March 30 March
2025 2024
Financial KPIs
Group adjusted revenue growth/(decline) year on year* 4.1% (5.8)% n/a
Topps Tiles like-for-like sales growth/(decline) year on year* 3.0% (9.2)% n/a
Group adjusted gross margin %* 53.4% 53.9% (0.5) ppts
Adjusted profit before tax* £3.2 million £3.1 million +3.2%
Adjusted earnings per share* 1.12 pence 1.03 pence +8.7%
Adjusted net (debt)/cash* £(1.2) million £19.3 million £(20.5) million
Inventory days 114 108 +6 days
Non-financial KPIs
Square metres of tiles sold in Topps Tiles (thousand) 2,102 2,088 +0.7%
Topps Tiles customer overall satisfaction score 91.2% 92.5% (1.3) ppts
Group colleague retention 80.8% 80.6% +0.2 ppts
* as defined in the Financial Review
FINANCIAL REVIEW
H1 2025 covers the 26 weeks to 29 March 2025. The previous period ('H1
2024') covers the 26 weeks to 30 March 2024. After a challenging year in
2024, the Group returned to sales growth in the period, with performance
improving over the first half and adjusted profits slightly higher than the
previous year, despite significant cost inflation. Key financial results were
as follows:
26 weeks ended 26 weeks ended YoY
29 March 2025 30 March 2024
(H1 2025) (H1 2024)
Adjusted Measures
Topps Tiles like-for-like revenue year on year +3.0% (9.2)% n/a
Adjusted revenue £127.8 million £122.8 million +4.1%
Adjusted gross profit £68.2 million £66.2 million +3.0%
Adjusted gross margin % 53.4% 53.9% (0.5)%
Adjusted operating profit £6.2 million £5.2 million +19.2%
Adjusted profit before tax £3.2 million £3.1 million +3.2%
Adjusted earnings per share 1.12p 1.03p +8.7%
Adjusted net (debt)/cash at period end £(1.2) million £19.3 million £(20.5) million
Statutory Measures
Group revenue £142.9 million £122.8 million +16.4%
Gross profit £74.1 million £66.2 million +11.9%
Gross margin % 51.9% 53.9% (2.0)ppts
Profit/(loss) before tax £1.9 million £(1.5) million n/a
Basic earnings/(loss) per share 0.61p (1.12)p n/a
Interim dividend per share 0.8p 1.2p (33.3)%
Acquisition and performance of CTD
On 19 August 2024, the Group acquired the brand and certain assets from CTD
Tiles Limited (in administration) including the right to occupy 30 stores,
selected stock, intellectual property and branding, for consideration of £9.0
million. The initial acquisition accounting was explained in the 2024 full
year results. This has not been re-examined in the current accounting period
due to the short period of time between the cessation of the IEO and the half
year reporting date, however this will be reviewed in advance of the year end,
in line with the twelve month measurement period as specified within IFRS 3,
and any adjustments will be re-presented in the 2025 full year results.
In the 2024 full year results, CTD's performance was excluded from adjusted
profit metrics, including its trading performance, acquisition costs, and the
initial costs of the CMA investigation. CTD's results will be excluded from
adjusted profit metrics in FY 2025 as the CMA investigation has had the impact
of removing the business from the Group's control for a material part of the
year.
In the first half of the year, sales in the CTD business were £15.1 million,
annualising at £30 million. Gross profit in the six-month period was £5.9
million. Following the acquisition of CTD, the Group acquired £2.2 million
of stock for £0.6 million, which was held by CTD and subject to retention of
title clauses. Of the overall £1.6 million gain, £0.6 million was
recognised within profit and loss as a credit against cost of goods sold in
the last financial year, £0.8 million was recognised in H1 2025 and the
remaining £0.2 million will be recognised in future periods. Excluding this
benefit and one-off costs in connection with the warehouse move, the gross
margins in CTD were 35% and action is being taken in the second half of the
year to improve gross margins.
The total loss before tax of the business was as follows:
£m 26 weeks to 29 March 2025
Trading (1.0)
Retention of title credits 0.8
One-off items (1.3)
CTD loss before tax (1.5)
CMA advisory costs (1.6)
Total (3.1)
One-off items of £1.3 million were incurred, including costs for legacy IT
systems which will now be exited, administration fees, and relocation and
moving costs for the distribution centre. The extensive CMA Phase one
process, which is described in the section above, resulted in total one-off
advisory costs of £1.6 million, primarily consisting of legal and economist
fees.
During the first half, the hold separate management team restocked the
business following the administration, resulting in an increase in inventories
of £2.5 million. The business also focused on cash collection, including
amounts falling due in the previous trading period, and payables increased as
a result of reinitiating normal supplier payment terms, resulting in a cash
inflow from other working capital movements of £2.8 million. Capital
expenditure of £0.8 million was incurred, largely as a result of the
relocation of CTD's main warehouse Kings Norton to the Prologis Park
Pineham. As a result, the cash outflow in the first half, excluding CMA
advisory costs, was £2.1 million, broken down as follows:
£m 26 weeks to 29 March 2025
Cash generated by operations before working capital (1.6)
Increase in inventories (2.5)
Other working capital movements 2.8
Capital expenditure (0.8)
Total cash flow (2.1)
The cash outflow due to CMA advisory fees in the first half was £1.0 million.
Consolidated Statement of Profit or Loss
Topps Group returned to revenue growth in 2025, with 4.1% adjusted revenue
growth across the business, including an improving trend across the first two
quarters. Sales in the Topps Tiles brand were 2.2% higher year on year,
driven by strong conversion, leading to transaction growth, with ATV staying
relatively flat year-on-year. Like-for-like sales in Topps Tiles were 3.0%
higher year-on-year.
Sales in Online Pure Play remained very strong, up 21.7% to £16.8 million.
Within Online Pure Play, Pro Tiler Tools continued to deliver excellent
growth, up 17.6% year-on-year to £15.4 million and Tile Warehouse doubled
sales year-on-year to £1.4 million. Parkside saw a £0.3 million decrease
in sales to £3.9m. Revenue by business area was as follows:
Revenue by brand (£m) H1 2025 H1 2024 Variance
Topps Tiles 107.1 104.8 +2.2%
Parkside 3.9 4.2 (7.1)%
Online Pure Play* 16.8 13.8 +21.7%
Adjusted revenue 127.8 122.8 +4.1%
CTD** 15.1 - -
Group revenue 142.9 122.8 +16.4%
*Online Pure Play includes Pro Tiler Tools and its associated brands, which
were acquired in March 2022, and Tile Warehouse, which was launched in May
2022.
** CTD was acquired on 19 August 2024. Please see the section above for
further information.
Adjusted gross profit was £2.0 million higher year-on-year at £68.2 million
(H1 2024: £66.2 million). The adjusted gross margin was 0.5 percentage
points lower year-on-year at 53.4%, caused entirely by the continued change in
business mix, specifically the relatively faster growth in the Online Pure
Play businesses compared with growth from Topps Tiles. Gross margins in the
Topps Tiles brand were flat year-on-year, with the negative impact from a
higher trade and essentials mix entirely offset by tighter controls on store
discount, improved margins in new categories, improved stock management, FX
gains and other margin management actions.
The Group's adjusted gross margin increased 0.7 percentage points compared
with the second half of FY 2024, and the business expects to see further
adjusted gross margin expansion in the second half.
As described in the section above, CTD generated gross profit of £5.9
million, including gains of £0.8 million from the sell through of stock
acquired under retention of title clauses following acquisition. Excluding
these gains and some one-off costs related to the relocation of the warehouse,
gross margins in CTD were 34.6%. After the inclusion of the CTD business,
Group gross margins in the first half were 51.9%.
Adjusted operating costs were £62.0 million, up £1.0 million from £61.0
million last year, explained by the following key items:
£ million
HY 2024 adjusted operating expenses 61.0
Inflationary costs 2.0
Increased performance related pay 0.6
Investment in marketing and systems 0.6
Online Pure Play cost investment 0.9
Other net savings (3.1)
HY 2025 adjusted operating expenses 62.0
Cost inflation of £2.0 million was due to the impact of the 9.8% increase in
National Living Wage from April 2024, wage rises for other colleagues from 1
October 2024, and other inflationary increases, partially offset by a £0.5
million saving from utility costs. Increased performance related pay of
£0.6 million relates to higher store commission, store bonuses, and Pro Tiler
bonus payments, and is expected to increase further in the second half as
profits continue to improve. The Group has signalled an intent to increase
marketing investment as well as embark on a core systems and CEP upgrade
programme, with total cost increases of £0.6 million year on year in the
period. The continued sales growth in Pro Tiler Tools has resulted in more
cost growth, particularly in digital marketing and in relation to their new
distribution centre. Other net savings includes lower store hours, reduced
property cost accruals and provisions, lower depreciation and fewer stores.
The first half contains a seasonal non-cash expense of £0.8 million relating
to holiday pay accruals (H1 2024: £0.8 million expense), which will reverse
in full over the second half of the financial year (resulting in a £1.6
million increase in half-on-half profits). Gas usage in the business will
also be lower in the second half. The latest increase in National Living
Wage of 6.7%, together with the increase in the rate and reduction in the
threshold of employers' NICs will also impact the second half cost base. The
Forward Guidance section below sets out in more detail some of the factors
influencing operating costs in H2 compared to H1.
Adjusted operating profit was up 19.2% to £6.2 million (H1 2024: £5.2
million).
Adjusted net finance costs were £3.0 million in H1 2025 (H1 2024: £2.1
million), as a result of lower cash balances throughout the half, utilisation
of the revolving credit facility in the period, and higher IFRS16 interest
charges due to rising interest rates. Statutory interest costs were £3.3
million (H1 2024: £2.3 million), broken down as follows:
H1 2025 H1 2024 Variance
Net interest payable on lease liabilities 2.5 2.3 0.2
Bank interest payable and amortisation of banking facility fees 0.6 0.1 0.5
Interest receivable on credit balances (0.1) (0.3) 0.2
Adjusted net finance costs 3.0 2.1 0.9
Interest unwind on Pro Tiler Tools earn out provision - 0.2 (0.2)
IFRS16 interest payable on non-operational warehousing 0.3 - 0.3
Net finance costs 3.3 2.3 1.0
Adjusted profit before tax for the period was £3.2 million (H1 2024: £3.1
million) and, after including the adjusting items described in the next
section, the statutory profit before tax was £1.9 million (H1 2024: loss
before tax of £1.5 million).
Adjusting items
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.
We have excluded property costs in relation to the store closure programme,
which ended with stores closed in 2022. Only one closed store was left in
the estate as at the half year end date.
In line with prior years, we treat 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 as
adjusting items. From the 2024 full year results, we have also excluded
impairment and impairment reversals of plant, property and equipment from
adjusted profit, as the impairment of these assets is a result of the same
impairment review process applied to right of use assets, implying the same
accounting presentation. In addition, the impact of these impairments is
excluded from adjusted profit. Impairments imply that assets will not incur
a depreciation charge moving forward in statutory profit, however, the Group's
adjusted profit before tax measure will carry a notional depreciation charge,
as if the assets had not been impaired, meaning that adjusted profit before
tax will continue to be comparable year on year, and is more reflective of the
actual lease payments made by the Group. None of these items has any cash
impact, in 2024 or in future periods.
In the period, the Group relocated the warehouse operations of both Pro Tiler
Tools and CTD into a distribution centre at the Prologis Park Pineham. The
costs associated with the warehouse before operational use, costs associated
with the warehouse being exited, and the relocation of the Pro Tiler operation
to the new facility, were £0.9 million.
In August 2024, the CTD brand and certain assets were acquired from
administration and the financial impact of this business, including its
trading performance, acquisition costs and one-off items, integration costs
(including the warehouse relocation), and the costs of advisory fees relating
to the CMA investigation have been excluded from adjusted profit. The IEO
enforced by the CMA had the effect of keeping CTD at arm's length of the
company's management and prohibiting further integration which would have
improved the business's financial performance.
In the period between H2 2022 and H1 2024 we excluded the cost relating to the
40% purchase of shares of Pro Tiler Limited, which, under IFRS 3, is treated
as a remuneration expense rather than a cost relating to the acquisition of
the relevant shares. Restructuring costs and other one-off costs have also
been excluded.
An analysis of movements from adjusted profit before tax to statutory
profit/(loss) before tax is given below:
H1 2025 £m H1 2024 £m
Adjusted profit before tax 3.2 3.1
Property
- Vacant property and closure costs (0.4) (0.3)
- Store impairment, reversal of impairment and lease exit gains and losses 0.4 (1.1)
- Removal of notional depreciation on impaired assets 2.9 -
- Non-operational warehouse costs (0.9) -
2.0 (1.4)
Business development
CTD
- Trading (1.0) -
- Retention of title benefits 0.8 -
- One off items (1.3) -
- CMA advisory costs (1.6) -
- Pro Tiler Limited share purchase provision - (3.1)
- Restructuring and other one-off costs (0.2) (0.1)
(3.3) (3.2)
Statutory profit / (loss) before tax 1.9 (1.5)
Tax and earnings per share
The tax expense was £0.7 million (H1 2024: £0.5 million). On an adjusted
basis, the tax expense was £1.0 million (H1 2024: £0.9 million) and the
effective tax rate for the period was 30.3% (H1 2024: 28.9%), higher than the
headline rate of corporation tax in the UK of 25% as a result of certain
disallowable expenses such as share based payment expenses and the net impact
of depreciation compared to capital allowances.
Adjusted earnings per share were 1.12 pence, up 8.7% when compared to 1.03
pence in H1 2024. The growth was greater than the growth in adjusted profit
before tax due to the full ownership of Pro Tiler Limited - in the prior
period there was a non-controlling interest which was acquired in the second
half of FY 2024.
Basic earnings per share were 0.61 pence (H1 2024: loss per share of 1.12
pence).
Dividend
Under the Group's capital allocation policy, interim dividends are set at one
third of the full year dividend from the previous year. The full year
dividend relating to FY 2024 was 2.4 pence and, as such, an interim dividend
of 0.8 pence has been declared by the Board (H1 2024: 1.2 pence). The shares
will trade ex-dividend on 5 June 2025 and the dividend will be paid on 11 July
2025. The Board expects to continue to apply its dividend policy at the full
year and therefore maintain full year dividend payments at a level which is at
least consistent with FY 2024.
Consolidated Statement of Financial Position and Consolidated Cash Flow
Statement
Capital Expenditure and Store Estate
Capital expenditure in the first half was £4.0 million (H1 2024: £1.9
million). £2.5 million relates to the establishment of the Group's new
distribution centre at the Prologis Park Pineham, supporting the Pro Tiler
Tools and CTD operations. In the period, the Group opened one new Topps
Tiles store at Balham, with the balance of capital expenditure being spent on
store improvements and IT projects.
In the period, one new Topps Tiles store opened and four Topps Tiles stores
closed. At the period end there were 298 trading stores (H1 2024: 304
stores). We retain significant flexibility within our store estate, with an
average unexpired lease term of 2.8 years (H1 2024: 3.0 years), or 2.7 years
excluding strategically important stores (H1 2024: 2.9 years). At the period
end, there was one closed store (H1 2024: three closed stores) which is
expected to be exited in the second half of the year, with five closed stores
exited in the first half.
The Board expects capital expenditure in the full year to be between £6
million and £8 million.
Inventory
Inventory at the period end was £40.3 million (H1 2024: £35.1 million),
representing 114 stock days (H1 2024: 108 stock days). This includes £4.1m
million of stock held in Pro Tiler (H1 2024: £3.1 million), representing 66
stock days (H1 2024: 62 stock days) and £5.4 million of stock held at CTD,
following restocking over the period as the business rebuilds its offer, up
from £2.9 million at the last year end. At the last year end, inventory was
£37.9 million, equivalent to 118 stock days.
Consolidated Cash Flow Statement
The Group's adjusted net cash/(debt) position decreased in the period by £9.9
million from £8.7 million of adjusted net cash at year end to £1.2 million
of adjusted net debt at the half year end. Adjusted net cash/(debt) is
defined as cash and cash equivalents, less bank loans, before unamortised
issue costs. The table below analyses the Group's adjusted net cash flow:
HY 2025 HY 2024
£m £m
Cash generated by operations, including interest and capital elements of 4.2 5.9
leases, before WC movements and CTD/CMA
Changes in working capital excluding CTD/CMA (4.5) (1.7)
CTD operational cash flows and CMA advisory fees (2.3) -
Net bank interest (0.4) 0.3
Tax (0.3) (1.9)
Capital expenditure (4.0) (1.9)
Other (0.2) (0.1)
Free cash flow (7.5) 0.6
Dividends (2.4) (4.7)
Change in adjusted net cash (9.9) (4.1)
Adjusted net cash/(debt) at start of period 8.7 23.4
Adjusted net cash/(debt) at end of period (1.2) 19.3
Cash generated by operations, after leases but before working capital
movements and excluding CTD was £4.2 million, £1.7 million lower than the
previous year, including the cash impact of the non-operational warehouse
costs and lower provisions. A working capital outflow excluding CTD of £4.5
million in the first half (HY 2024: outflow of £1.7 million) was due to a
moderate increase in trade credit, and lower payables, due to lower accruals
and the timing of a rent payment which fell into the first half. Stock,
excluding CTD, was flat year-on-year. CTD cash flows and capital expenditure
are detailed in the sections above. Net interest paid was a £0.4 million
cash outflow when compared to a £0.3 million inflow last year due to lower
cash balances throughout the half. However, cash tax payments were lower as
a result of the statutory loss made last year and dividends were lower, being
the cash cost of the FY 2024 final dividend of 1.2 pence per share (HY 2024:
final dividend of 2.4 pence per share).
Return on Capital Employed
Lease adjusted returns on capital employed in the first half were 12.9% (H1
2024: 16.4%), based on a reduction in the rolling 12-month adjusted operating
profit compared to the previous year, in particularly the second half of FY
2023.
Banking Facilities
The Group maintains a robust balance sheet, providing resilience and allowing
investment in growth opportunities. A £30.0 million revolving credit
facility is in place which is committed to October 2027 (H1 2024: £30.0
million facility, committed to October 2026). At the half year, £14 million
of this facility was drawn (H1 2024: £nil drawn) following £18.9 million of
acquisitions in the second half of FY 2024. Based on net debt excluding
lease liabilities of £1.2 million at the period end, the Group had £28.8
million of headroom to its banking facilities at the period end (H1 2024:
£49.3 million).
Forward Guidance
Certain factors will impact the second half, as described below:
· Gross margins in the second half are expected to be slightly higher than the
first half;
· Performance related pay will increase as profits rise;
· The first half contained a £0.8 million expense relating to holiday pay
accruals, which will reverse in the second half, resulting in a £1.6 million
increase in half on half profits in the second half;
· The Group's utilities expense is weighted towards the colder months; this is
expected to improve profits half on half by £0.6 million; and
· The increase in the national living wage and national insurance contributions
from 1 April will impact employment costs in the second half by approximately
£2.0 million relative to the first half.
Current Trading and Outlook
Current trading is strong, with the trading momentum from the second quarter
continuing into the second half. Group sales in the first seven weeks of the
second half were up 9.5%, with like-for-like sales in Topps Tiles up 6.2% and
other brands within the Group also seeing an acceleration of previous sales
trends.
Macroeconomic indicators are looking more favourable, including lower interest
rates, relatively high levels of personal savings and rising disposable
incomes, although consumer sentiment remains volatile. The combination of
strong strategic execution and a differentiated brand portfolio gives the
Group confidence that it will deliver meaningful year on year growth in both
sales and profit this year as it progresses towards delivery of Mission 365.
Risks and Uncertainties
The Board continues to monitor the key risks and uncertainties of the Group.
Since the 2024 Annual Report, the Board has removed a principal risk on the
limited logistics capacity of the Group. In FY25 the Pro Tiler and CTD
warehouse operations were moved to a new warehouse and the increased logistics
capacity of the Group is now sufficient to support the Group's medium term
growth forecasts. A principal risk on Global Supply Chain that focused on
geopolitical tensions in the red sea has been broadened to include
consideration of the potential impact of tariffs being applied to global
trade. The Board believes that the other principal risks remain largely as
documented in the 2024 Annual Report, by nature and scale. These key risks
and uncertainties include: growth through mergers and acquisitions; aging
systems; cyber security; development and delivery of group strategy;
inflationary cost increases of goods not for resale; macroeconomic changes and
consumer confidence; critical asset failure; sustainability and climate
change; health and safety.
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 more than one year, with sales
falling nearly 10% year-on-year across the remainder of FY25 and then no
growth year-on-year in FY26, in both our Topps Tiles brand and Pro Tiler Tools
brands. The scenario also assumes declines in gross margins across the
remainder of FY25 equating to a year-on-year decrease of approximately one
percentage point, with recovery over a two-year period. The more severe
downside scenario represents a reverse stress-test scenario to assess the
amount of sales reduction required before the Group begins to approach
covenant breach. Even in this scenario the group has a significant amount of
cash headroom. This scenario also assumes that variable costs would reduce in
line with sales and direct mitigating cost reduction actions, which would be
taken if such a downturn occurred.
The going concern analysis, prepared for the Board, also outlined a range of
additional mitigating actions that could be taken in a severe but plausible
trading scenario. These included, but were not limited to, further savings on
store colleague costs and 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 scenarios. In no scenario modelled does the
Group breach covenant compliance. The current lending facility, of £30.0
million, was refinanced in October 2022 and expires in October 2027. The Group
will begin discussions with lenders on refinancing in 2026.
In all scenarios, the Board has concluded that there is sufficient available
liquidity, with sufficient 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 Interim
Accounts.
Responsibility Statement
We confirm that to the best of our knowledge:
(a) the condensed set of financial statements has been prepared in accordance
with IAS 34 'Interim Financial Reporting' as contained in UK-adopted IFRS;
(b) the interim management report includes a fair review of the information
required by DTR 4.2.7R (indication of important events during the first six
months and description of principal risks and uncertainties for the remaining
six months of the year); and
(c) the interim management report includes a fair review of the information
required by DTR 4.2.8R (disclosure of related parties' transactions and
changes therein).
Rob Parker Stephen Hopson
Chief Executive Officer Chief Financial Officer
20 May 2025
Condensed Consolidated Statement of Profit or Loss
for the 26 weeks ended 29 March 2025
26 weeks 26 weeks 52 weeks
ended ended ended
29 March 30 March 28 September
2025 2024 2024
£'000 £'000 £'000
Note (Unaudited) (Unaudited) (Audited)
Group revenue 2 142,902 122,774 251,756
Cost of sales (68,805) (56,542) (117,434)
Gross profit 74,097 66,232 134,322
Distribution and selling costs* (48,480) (47,430) (93,426)
Other operating expenses (2,399) (3,850) (5,918)
Administrative costs (13,633) (9,945) (19,492)
Marketing and online costs (4,830) (3,833) (7,944)
Property related impairment reversal/(charge)* 396 (591) (19,360)
Other income 71 214 401
Group operating profit/(loss) 5,222 797 (11,417)
Net finance costs (3,339) (2,266) (4,815)
Profit/(loss) before taxation 1,883 (1,469) (16,232)
Taxation 3 (687) (514) 3,412
Profit/(loss) for the period 1,196 (1,983) (12,820)
Profit/(loss) is attributable to:
Owners of Topps Tiles Plc 1,196 (2,195) (13,033)
Non-controlling interests - 212 213
1,196 (1,983) (12,820)
All results relate to continuing operations of the Group.
* In the prior period, Property related impairments were included within
Distribution and selling costs.
Earnings per ordinary share
- Basic 5 0.61p (1.12p) (6.63p)
- Diluted 5 0.60p (1.10p) (6.63p)
There are no other recognised gains and losses for the current and preceding
financial periods other than the results shown above. Accordingly, a separate
Condensed Consolidated Statement of Comprehensive Income has not been
prepared.
Condensed Consolidated Statement of Financial Position
as at 29 March 2025
29 March 30 March 28 September
2025 2024 2024
£'000 £'000 £'000
Note (Unaudited) (Unaudited) (Audited)
Non-current assets
Goodwill 8,365 2,101 8,365
Intangible assets 3,892 4,458 4,161
Property, plant and equipment 18,211 18,793 17,328
Deferred tax assets 3,773 84 4,461
Right-of-use assets 70,388 74,910 55,325
Other financial assets 1,447 1,691 1,653
106,076 102,037 91,293
Current assets
Inventories 40,334 35,130 37,850
Other financial assets 343 320 210
Trade and other receivables 16,143 6,599 13,350
Current tax debtor 1,327 976 1,015
Cash and cash equivalents 12,763 19,319 23,682
70,910 62,344 76,107
Total assets 176,986 164,381 167,400
Current liabilities
Trade and other payables (59,256) (43,599) (57,463)
Lease liabilities (15,791) (16,868) (14,584)
Derivative financial instruments (98) (200) (378)
Provisions (232) (8,985) (714)
Total current liabilities (75,377) (69,652) (73,139)
Net current (liabilities)/assets (4,467) (7,308) 2,968
Non-current liabilities
Lease liabilities (80,518) (72,543) (71,381)
Provisions (2,770) (2,441) (2,299)
Bank loans 6 (13,996) - (14,996)
Total liabilities (172,661) (144,636) (161,815)
Net assets 4,325 19,745 5,585
Equity
Share capital 8 6,556 6,556 6,556
Share premium 2,636 2,636 2,636
Own shares (82) (2) (7)
Merger reserve (399) (399) (399)
Share-based payment reserve 6,378 6,129 6,349
Capital redemption reserve 20,359 20,359 20,359
Accumulated losses (31,123) (18,928) (29,909)
Capital and reserves attributable to owners of Topps Tiles Plc 4,325 16,351 5,585
Non-controlling interests - 3,394 -
Total equity 4,325 19,745 5,585
Condensed Consolidated Statement of Changes in Equity
For the 26 weeks ended 29 March 2025
Equity attributable to equity holders of the parent
Share Share Own Merger Share-based payment Capital redemption Accum-ulated Non-controlling Total
capital premium shares reserve reserve reserve losses interest equity
£'000 £'000 £'000 £'000 £'000 £'000 £'000 £'000 £'000
Balance at
28 September 6,556 2,636 (7) (399) 6,349 20,359 (29,909) - 5,585
2024 (Audited)
Profit and total comprehensive income
for the period - - - - - - 1,196 - 1,196
Dividends - - - - - - (2,357) - (2,357)
Own shares purchased in the period - - (128) - - - - - (128)
- - 53 - - - (53) - -
Own shares disposed of in the period
Credit to equity for equity-settled share based payments - - - - 29 - - - 29
Balance at
29 March 2025
(Unaudited) 6,556 2,636 (82) (399) 6,378 20,359 (31,123) - 4,325
Condensed Consolidated Statement of Changes in Equity (continued)
For the 26 weeks ended 30 March 2024
Equity attributable to equity holders of the parent
Share Share Own Merger Share-based payment Capital redemption Accum-ulated Non-controlling Total
capital premium shares reserve reserve reserve losses interest equity
£'000 £'000 £'000 £'000 £'000 £'000 £'000 £'000 £'000
Balance at
30 September 2023 (Audited) 6,556 2,636 (112) (399) 6,035 20,359 (11,869) 3,182 26,388
(Loss)/profit and total comprehensive income
for the period - - - - - - (2,195) 212 (1,983)
Dividends - - - - - - (4,717) - (4,717)
Own shares purchased in the period - - (53) - - - - - (53)
- - 163 - - - (163) - -
Own shares disposed of in the period
- - - - 94 - - - 94
Credit to equity for equity-settled share based payments
- - - - - - 16 - 16
Deferred tax on share-based payment transactions
Balance at
30 March 2024
(Unaudited) 6,556 2,636 (2) (399) 6,129 20,359 (18,928) 3,394 19,745
Condensed Consolidated Statement of Changes in Equity (continued)
For the 52 weeks ended 28 September 2024
Equity attributable to equity holders of the parent
Share Share Own Merger Share-based payment Capital redemption Accum-ulated Non-controlling Total
capital premium shares reserve reserve reserve losses interest equity
£'000 £'000 £'000 £'000 £'000 £'000 £'000 £'000 £'000
Balance at
30 September 2023 (Audited) 6,556 2,636 (112) (399) 6,035 20,359 (11,869) 3,182 26,388
(Loss)/profit and total comprehensive loss
for the period - - - - - - (13,033) 213 (12,820)
Dividends - - - - - - (7,077) (1,111) (8,188)
Transfer on acquisition of non-controlling interest - - - - - - 2,284 (2,284) -
Own shares purchased in the period - - (105) - - - - - (105)
Own shares disposed of in the period - - 210 - - - (210) - -
Credit to equity for equity-settled share-based payments - - - - 314 - - - 314
Deferred tax on share-based payment transactions - - - - - - (4) - (4)
Balance at
28 September 2024
(Audited) 6,556 2,636 (7) (399) 6,349 20,359 (29,909) - 5,585
Condensed Consolidated Statement of Changes in Equity (continued)
For the 26 weeks ended 30 March 2024
Equity attributable to equity holders of the parent
Share Share Own Merger Share-based payment Capital redemption Accum-ulated Non-controlling Total
capital premium shares reserve reserve reserve losses interest equity
£'000 £'000 £'000 £'000 £'000 £'000 £'000 £'000 £'000
Balance at
30 September 2023 (Audited) 6,556 2,636 (112) (399) 6,035 20,359 (11,869) 3,182 26,388
(Loss)/profit and total comprehensive income
for the period - - - - - - (2,195) 212 (1,983)
Dividends - - - - - - (4,717) - (4,717)
Own shares purchased in the period - - (53) - - - - - (53)
- - 163 - - - (163) - -
Own shares disposed of in the period
- - - - 94 - - - 94
Credit to equity for equity-settled share based payments
- - - - - - 16 - 16
Deferred tax on share-based payment transactions
Balance at
30 March 2024
(Unaudited) 6,556 2,636 (2) (399) 6,129 20,359 (18,928) 3,394 19,745
Condensed Consolidated Statement of Changes in Equity (continued)
For the 52 weeks ended 28 September 2024
Equity attributable to equity holders of the parent
Share Share Own Merger Share-based payment Capital redemption Accum-ulated Non-controlling Total
capital premium shares reserve reserve reserve losses interest equity
£'000 £'000 £'000 £'000 £'000 £'000 £'000 £'000 £'000
Balance at
30 September 2023 (Audited) 6,556 2,636 (112) (399) 6,035 20,359 (11,869) 3,182 26,388
(Loss)/profit and total comprehensive loss
for the period - - - - - - (13,033) 213 (12,820)
Dividends - - - - - - (7,077) (1,111) (8,188)
Transfer on acquisition of non-controlling interest - - - - - - 2,284 (2,284) -
Own shares purchased in the period - - (105) - - - - - (105)
Own shares disposed of in the period - - 210 - - - (210) - -
Credit to equity for equity-settled share-based payments - - - - 314 - - - 314
Deferred tax on share-based payment transactions - - - - - - (4) - (4)
Balance at
28 September 2024
(Audited) 6,556 2,636 (7) (399) 6,349 20,359 (29,909) - 5,585
Condensed Consolidated Cash Flow Statement
for the 26 weeks ended 29 March 2025
26 weeks 26 weeks 52 weeks
ended ended ended
29 March 30 March 28 September
2025 2024 2024
£'000 £'000 £'000
Notes (Unaudited) (Unaudited) (Audited)
Cash flow from operating activities
Profit/(loss) for the period 1,196 (1,983) (12,820)
Taxation 3 687 514 (3,412)
Finance costs 3,493 2,620 5,480
Finance income (154) (354) (665)
Group operating profit/(loss) 5,222 797 (11,417)
Adjustments for:
Depreciation of property, plant and equipment 2,101 2,251 4,667
Depreciation of right-of-use assets 6,166 8,865 17,630
Amortisation of intangible assets 338 339 683
Loss on disposal of property, plant and equipment - 25 160
(Gain)/loss on sublease (32) (153) 20
Impairment of property, plant and equipment 628 23 2,290
Impairment of right-of-use assets 2,184 569 17,094
Reversal of right-of-use asset impairment (3,208) - -
(Gain)/loss on lease disposal (21) 660 (526)
Share option charge 28 94 314
(Decrease)/increase in earn out liability and other provisions* (600) 3,207 3,394
Non-cash (gain)/loss on derivative contracts (280) 274 452
Cash generated from operations before movements in working capital, tax and 12,526 16,951 34,761
interest
Increase in trade and other receivables (2,808) (1,404) (8,066)
(Increase)/decrease in inventories* (2,484) 1,221 670
Increase/(decrease) in trade and other payables 1,652 (1,526) 12,344
Cash generated by operations 8,886 15,242 39,709
Interest paid on borrowings (515) (67) (666)
Interest received on operational cash balances 163 351 610
Interest element of lease liabilities paid (2,903) (2,294) (4,731)
Settlement of earn out liability and other provisions - - (8,838)
Taxation paid (311) (1,858) (2,314)
Net cash from operating activities 5,320 11,374 23,770
Investing activities
Interest received on sublease assets 24 29 55
Receipt of capital element of sublease assets 109 318 467
Proceeds from incentive schemes 160 - -
Purchase of property, plant, equipment* (3,601) (1,802) (4,193)
Direct costs relating to right-of-use assets (530) (84) (188)
Purchase of intangibles (67) (42) (89)
Purchase of business - - (9,000)
Proceeds on disposal of property, plant and equipment - 9 -
Net cash used in investment activities (3,905) (1,572) (12,948)
Financing activities
Payment of capital element of lease liabilities (8,760) (9,081) (17,059)
Dividends paid 4 (2,357) (4,717) (8,188)
Financing arrangement fees (89) - (152)
Purchase of own shares (128) (53) (105)
Proceeds from borrowings 6 16,000 - 23,500
Repayment of borrowings 6 (17,000) - (8,504)
Net cash used in financing activities (12,334) (13,851) (10,508)
Net (decrease)/increase in cash and cash equivalents (10,919) (4,049) 314
Cash and cash equivalents at beginning of period 23,682 23,368 23,368
Cash and cash equivalents at end of period 12,763 19,319 23,682
*In the 52 weeks ending 28 September 2024, these movements excluded CTD
acquired balances.
1. General information
The interim report was approved by the Board on 20 May 2025. The financial
information for the 52 week period ended 28 September 2024 has been based on
information in the audited financial statements for that period.
The comparative figures for the 52 week period ended 28 September 2024 are an
abridged version of the Group's full financial statements and, together with
other financial information contained in these interim results, do not
constitute statutory financial statements of the Group as defined in section
434 of the Companies Act 2006. A copy of the statutory accounts for that 52
week period has been delivered to the Registrar of Companies. The auditor
has reported on those accounts: their report was unqualified, did not draw
attention to any matters by way of emphasis and did not contain a statement
under s498 (2) or (3) of the Companies Act 2006.
This condensed set of consolidated financial statements has been prepared for
the 26 weeks ended 29 March 2025 and the comparative period has been prepared
for the 26 weeks ended 30 March 2024.
The interim financial statements have not been audited or reviewed by auditors
pursuant to the Auditing Practices Board guidance on "Review of interim
financial information" and do not include all of the information required for
full annual financial statements.
Basis of preparation and accounting policies
The financial statements of Topps Tiles Plc have been prepared in accordance
with UK-adopted International Accounting Standards in conformity with the
requirements of the Companies Act 2006 and the disclosure guidance and
transparency rules sourcebook of the United Kingdom's Financial Conduct
Authority. The unaudited condensed consolidated set of financial statements
included in this half-yearly financial report has been prepared in accordance
with International Accounting Standard 34 'Interim Financial Reporting', as
adopted by the European Union and in conformity with the requirements of the
Companies Act 2006. The same accounting policies, presentation and methods of
computation are followed in the condensed set of financial statements as
applied in the Group's latest annual audited financial statements.
New and amended standards adopted by the Group
The Group continues to monitor the potential impact of other new standards and
interpretations which have been or may be endorsed and require adoption by the
Group in future reporting periods.
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 more than one year, with sales
falling nearly 10% year-on-year across the remainder of FY25 and then no
growth year-on-year in FY26, in both our Topps Tiles brand and Pro Tiler Tools
brands. The scenario also assumes declines in gross margins across the
remainder of FY25 equating to a year-on-year decrease of approximately one
percentage point, with recovery over a two-year period. The more severe
downside scenario represents a reverse stress-test scenario to assess the
amount of sales reduction required before the Group begins to approach
covenant breach. Even in this scenario the group has a significant amount of
cash headroom. This scenario also assumes that variable costs would reduce in
line with sales and direct mitigating cost reduction actions, which would be
taken if such a downturn occurred.
The going concern analysis, prepared for the Board, also outlined a range of
additional mitigating actions that could be taken in a severe but plausible
trading scenario. These included, but were not
limited to, further savings on store colleague costs and 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
scenarios. In no scenario modelled does the Group breach covenant compliance.
The current lending facility, of £30.0 million, was refinanced in October
2022 and expires in October 2027.
In all scenarios, the Board has concluded that there is sufficient available
liquidity, with sufficient 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 Interim
Accounts.
2. Business segments
The Group trades in four related sectors, which are Topps Tiles, Parkside, CTD
and Online Pure Play. The Board receives monthly financial information at this
level and uses this information to monitor performance, allocate resources and
make operational decisions. The Group sells tiles and tile-associated products
in each of these sectors, predominantly to UK-based retail, trade and
commercial customers, and offers a range of delivery and collection options
for orders.
Revenue can be split by the following geographical regions:
26 weeks 26 weeks 52 weeks
ended ended ended
29 March 30 March 28 September
2025 2024 2024
£'000 £'000 £'000
(Unaudited) (Unaudited) (Audited)
UK 142,789 122,444 251,511
EU 86 179 176
Rest of World 27 151 69
Total 142,902 122,774 251,756
3. Taxation
26 weeks 26 weeks 52 weeks
ended ended ended
29 March 30 March 28 September
2025 2024 2024
£'000 £'000 £'000
(Unaudited) (Unaudited) (Audited)
Current tax - debit for the period - 513 265
Current tax - adjustment in respect of prior periods - - 720
Deferred tax - debit / (credit) for the period 687 1 (3,201)
Deferred tax - adjustment in respect of previous periods - - (1,196)
Total tax charge/(credit) 687 514 (3,412)
4. Interim dividend
An interim dividend of 0.80p (2024: 1.20p) per ordinary share has been
declared. A final dividend of 1.20p per ordinary share was approved and paid
in the period, in relation to the 52-week period ended 28 September 2024.
5. 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.
26 weeks 52 weeks
26 weeks
ended ended ended
29 March 30 March 28 September
2025 2024 2024
(Unaudited) (Unaudited) (Audited)
Weighted average number of issued shares for basic earnings per share 196,681,818 196,681,818 196,681,818
Weighted average impact of treasury shares for basic earnings per share (135,400) (108,287) (64,344)
Total weighted average number of shares for basic earnings per share 196,546,418 196,573,531 196,617,474
Weighted average number of shares under option 1,413,412 2,616,664 2,116,731
For diluted earnings per share 197,959,830 199,190,195 198,734,205
£'000 £'000 £'000
Profit/(loss) for the period 1,196 (2,195) (13,033)
Adjusting items 1,007 4,221 17,730
Adjusted profit for the period 2,203 2,026 4,697
Earnings per ordinary share - basic 0.61p (1.12p) (6.63p)
Earnings per ordinary share - diluted 0.60p (1.10p) (6.63p)
Earnings per ordinary share - adjusted 1.12p 1.03p 2.39p
The calculation of the basic and diluted earnings per share used the
denominators as shown above for both basic and diluted earnings per share.
Adjusted earnings per share for the 26 weeks ended 29 March 2025 were
calculated after adjusting for the post-tax impact of the following items:
vacant property and closure costs of £0.4m (2024: £0.3m), impairment of
right-of-use assets and lease exit gains and losses of £0.2m gain (2024:
£0.8m cost), removal of notional depreciation on impaired assets of £2.2m
(2024: £nil), non-operational warehouse costs of £0.7m (2024: £nil), CTD
trading losses of £0.7m (2024: £nil), CTD one off costs £0.9m (2024:
£nil), CTD retention of title benefits of £0.6m (2024: £nil), restructuring
and other one-off costs of £0.1m (2024: £nil), CMA advisory costs of £1.2m
(2024: £nil) and Pro Tiler Limited share purchase expense of £nil (2024:
£3.1m).
6. Bank loans
26 weeks 26 weeks 52 weeks
ended ended ended
29 March 30 March 28 September
2025 2024 2024
£'000 £'000 £'000
(Unaudited) (Unaudited) (Audited)
Bank loans (all sterling) 13,846 - 14,996
The borrowings are repayable as follows:
On demand or within one year 14,000 - 15,000
In the second year - - -
In the third to fifth year - - -
14,000 - 15,000
Less: total unamortised issue costs (154) (213) (4)
13,846 (213) 14,996
Issue costs to be amortised within 12 months 154 125 -
(Unaudited) (Unaudited) (Audited)
Bank loans (all sterling) 13,846 - 14,996
The borrowings are repayable as follows:
On demand or within one year 14,000 - 15,000
In the second year - - -
In the third to fifth year - - -
14,000 - 15,000
Less: total unamortised issue costs (154) (213) (4)
13,846 (213) 14,996
Issue costs to be amortised within 12 months 154 125 -
The Group has a revolving credit facility to October 2027 of £30.0 million.
As at 29 March 2025, £14.0 million of this facility was drawn (30 March 2024:
£nil), leaving £16.0 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.
7. Financial instruments
The Group has the following financials instruments which are categorised as
fair value through profit and loss:
Carrying value and fair value
26 weeks 26 weeks 52 weeks
ended ended ended
29 March 30 March 28 September
2025 2024 2024
£'000 £'000 £'000
(Unaudited) (Unaudited) (Audited)
Financial liabilities
Fair value through profit and loss 98 200 378
(Unaudited) (Unaudited) (Audited)
Financial liabilities
Fair value through profit and loss 98 200 378
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 (2024: 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).
At 29 March 2025 the fair value of the Group's currency derivatives is a loss
of £98,000 (30 March 2024: loss of £200,000). These amounts are based on the
market value of equivalent instruments at the Statement of Financial Position
date.
A gain of £280,000 is included in cost of sales in the 26 weeks ended 29
March 2025 (26 weeks ended 30 March 2024: loss of £274,000).
8. Share capital
The issued share capital of the Group as at 29 March 2025 amounted to
£6,556,000 (30 March 2024: £6,556,000). The number of shares at 29 March
2025 were 196,681,818 (30 March 2024: 196,681,818).
9. Seasonality of sales
Historically there has not been any material seasonal difference in sales
between the first and second half of the reporting period, with approximately
50% of annual sales arising in the period from October to March.
10. Related party transactions
MS Galleon AG is a related party by virtue of their 29.8% shareholding
(58,569,649 ordinary shares) in the Group's total voting rights (30 March
2024: 29.8% shareholding).
MS Galleon AG is the owner of Cersanit, a supplier of ceramic tiles with whom
the Group made purchases of £294,000 during the first half of the year which
is 0.4% of cost of goods sold (2024: purchases of £474,000 during the first
half of the year which is 0.8% of cost of goods sold).
An amount of £159,000 was outstanding with Cersanit at 29 March 2025 (30
March 2024: £262,000). 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.
11. CTD acquisition
On 19 August 2024 the Group acquired certain trade and assets of CTD Tiles
("CTD") for a cash consideration of £9.0m. On acquisition, the Group
recognised property, plant and equipment of £0.9 million, £2.2 million of
inventory, £0.4 million of provisions, and intangible assets consisting of
the goodwill of £6.3 million. The goodwill generated on acquisition reflects
the expected synergies from combining operations between the Group and the
existing CTD trading operations as a result of leveraging the Group's supply
chain and operations.
At 29 March 2025, the fair values assigned to all of the acquired assets has
been determined on a provisional basis in accordance with IFRS 3 'Business
Combinations' given the ongoing CMA enquiries discussed in the 2024 Annual
Report. The fair values together with an assessment of goodwill and intangible
assets acquired will be completed within the 12 month fair value period, as
permitted by IFRS 3.
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