Final Results

RNS Number:3653O
Topps Tiles PLC
25 July 2000

TOPPS TILES  Plc
The UK's largest ceramic tile specialist

Financial Results for the period ended 3rd June 2000


THIRD CONSECUTIVE YEAR OF GROWTH SINCE FLOTATION

Highlights

*   Turnover of #62.6 million (1999: #43.0m)                45% increase
*   Profit before tax and exceptional items a record 
    #8.70 million (1999:#5.83m)                             49% increase
*   Adjusted earnings per share of 14.2p 
    (1999: 9.9p)                                            43% increase
*   Like-for-like sales growth of 13%
*   Final net dividend of 3.33p per share.  Total net 
    dividend for the year 4.33p
*   Potential target of 350 plus stores by 2006
*   Like-for-like sales in first six weeks of current 
    year up 11% (1999: +9%)
  
Commenting on the results, Barry Bester, Chief Executive said:

"1999/2000 was an excellent year for Topps Tiles.  We continue to strengthen
our position in the UK with a net total of 18 new stores opened this year.

Sales in the current year are showing encouraging growth and like-for-like
sales in the first six weeks are up 11%.  Looking ahead growth forecasts for
the year remain positive and we are confident that Topps Tiles is on course to
sustain future growth"


Enquiries:

Ann-Marie Wilkinson, Beattie Media            020 7930 0453/07730 415019
Barry Bester, Chief Executive                 0802 273334



CHAIRMAN AND CHIEF EXECUTIVE'S JOINT STATEMENT

1999/2000 was another excellent year for Topps Tiles and marks our third
consecutive year of growth since flotation.

Financial Results
Our profit before taxation and exceptional items was a record #8.70 million,
49% up on last year's figure of #5.83 million from turnover of #62.6 million
(1999:  #43.0 million).  Adjusted earnings per share rose by 43% to 14.2p
(1999: 9.9p).

The underlying growth of the business was strong with like-for-like sales
increasing 13%.

The gross margin level is 54.6% as compared to the 1999 level of 55.5%,
however, last year included higher than normal margins achieved on sales of
the ex-Tile City stock.  On a comparable basis the gross margin percentage has
been maintained.  Tile margins continue to grow, whilst wood flooring margins,
which is a more competitive market, has been affected by increased
competition.

Within the period there were exceptional items totalling #686,000. These
related to the one-off costs associated with the further discontinuation of
bathrooms within the business of #431,000 and the stock write-off of
unsaleable product purchased as part of the overall stock purchase agreement
from the receivers of Tile City of #255,000.

Capital expenditure, excluding freehold property, amounted to #4.4 million.
This reflects the rebranding and refurbishment of the Tile Clearing House
stores at a cost of #0.9 million and the replacement of bathroom space in the
Topps Tiles stores with further tile and flooring product displays at a cost
of #0.8 million.  Also 21 new stores were opened in the period at a cost of
#1.3 million and a further 26 stores were refitted at a cost of #1.1 million.

We have also developed three freehold properties during the period at a cost
of #1.5 million and disposed of three freehold properties, the total proceeds
of which amounted to #1.2 million.  The Group currently owns ten freehold
properties with a net book value of #3.5 million.

At the period end cash balances for the Group were #0.4 million and long term
bank loans were #3.0 million.

Dividend
The board has declared a final dividend for the year of 3.33p per share
payable on 2 October 2000 to shareholders on the register at 4 September 2000.
The total dividend for the year is 4.33p per share against 3.23p for 1999.

The Business
We set ourselves a net store opening target for the full year of 15 new
outlets and we have actually opened 17 Topps Tiles stores and four Tile
Clearing House stores in the period.  Three Topps Tiles stores were closed,
giving us a net 18 new outlets.  This now gives us a total of 127 trading
outlets, strengthening our position within  the UK geographically, with an
even stronger presence in the London area  and extending our boundaries as far
as Inverness in Scotland.

At flotation, in June 1997, we set ourselves a target of doubling the number
of retail outlets in the following three financial years.  Having exceeded
that target we have been reviewing our future roll-out programme and have
looked strategically at the total number of stores we believe could be
supported throughout the UK.  Based on the successful trialling of the Tile
Clearing House brand alongside Topps Tiles stores and the number of outlets
possible in towns/areas that have a smaller customer catchment area, our new
stated objective is to have a total of over 350 stores within the next six
years.

We constantly review our core stores and where necessary close and/or relocate
or  refurbish those that are no longer meeting required levels of performance.
During the year we have closed three and refitted 26 stores.

We have gradually phased out our bathroom products, substituting the space
made available with an increased tile and floor offering.  This has proved
successful and has improved overall cash margins in those stores.

One of our core strengths in the market is our unequalled customer service and
we continue to invest heavily in training and incentivising our staff. This
policy has proved invaluable in helping us to achieve a stable workforce and,
in a competitive market place, attract high calibre people to our business.

The  workforce of the Company has increased during the year from  730  to  863
which  reflects  the number of new store openings, and our progress  has  also
enabled us to strengthen our senior management team.

Current Trading and Prospects
Sales  in  the  current year are showing encouraging growth and  like-for-like
sales in the first six weeks of the year are up 11% (1999: +9%).

This  financial year we plan to open a further 20 outlets - a mixture of  both
Topps Tiles and Tile Clearing House stores.

Looking ahead, growth forecasts for the year remain positive and, coupled with
the  growing  strength from market penetration and brand recognition,  we  are
confident that Topps Tiles is on course to sustain future growth.

Stuart Williams, Chairman
Barry Bester, Chief Executive


Consolidated Profit and Loss Account
For the period ended 3 June 2000

                                             
                                           2000      1999
                                             
                                          #'000     #'000
                                             
Turnover                                 62,614    42,996
Cost of Sales                           (28,443)  (19,121)
                                        -------   -------
Gross profit                             34,171    23,875                     
Operating expenses                 
- employee profit sharing                (1,959)   (1,458)
- other operating expenses              (23,963)  (16,326)                
                                        -------   -------
Operating profit                                                              
- before exceptional costs                8,935     6,091
- exceptional costs                        (686)        -
                                        -------   -------
After exceptional costs                   8,249     6,091

Interest  receivable and  
similar income                               17        50
Interest payable and 
similar charges                            (248)     (313)
                                        -------   -------
Profit on ordinary activities           
before taxation                           8,018     5,828
Tax on profit on ordinary           
activities                               (2,487)   (1,792)
                                        -------   -------
Profit on ordinary activities           
after taxation                            5,531     4,036
Dividends                                (1,844)   (1,348)
                                        -------   -------                     
                       
Transfer to reserves                      3,687     2,688
                                             
Earnings per ordinary share                  
- basic                                    13.1p      9.9p                    
- basic adjusted                           14.2p      9.9p       
- diluted                                  12.5p      9.4p

There are no recognised gains or losses in either period other than the profit
for the financial period.


Balance Sheets
3 June 2000
                              GROUP            COMPANY
                                                    
                          2000    1999     2000       1999
                         #'000   #'000    #'000      #'000
Fixed assets                                     
Goodwill                   320     113        -          -
Tangible assets         12,918   9,270        -          -
Investments                  -       -   14,640     14,640
                        ------  ------   ------     ------
                        13,238   9,383   14,640     14,640
Current assets                                   
Stocks                  15,948  13,285        -          -
Debtors                  2,945   1,753    2,751      1,121
Cash at bank and in      
hand                       435     710    4,758      5,963    
                        ------  ------   ------     ------
                        19,328  15,748    7,509      7,084
                                                 
Creditors: Amounts                          
falling due within  
one year               (16,003)(12,813)  (1,494)    (1,264)            
                        ------  ------   ------     ------
Net current assets       3,325   2,935    6,015      5,820
                        ------  ------   ------     ------
Total assets less                          
current liabilities     16,563  12,318   20,655     20,460
Creditors: Amounts                          
falling due after                                 
more than one year      (2,716) (2,685)       -          -
Provisions for                          
liabilities and 
charges                   (665)   (295)       -          -
                        ------  ------   ------     ------
Net assets              13,182   9,338   20,655     20,460                    
                        ------  ------   ------     ------
   
Capital and reserves                             
Called-up share capital  5,309   5,264    5,309      5,264
Share premium              112       -      112          -
Merger reserve            (399)   (399)       -          -
Special reserve              -       -   14,917     14,917
Profit and loss account  8,160   4,473      317        279
                        ------  ------   ------     ------
Equity shareholders'                           
funds                   13,182   9,338   20,655     20,460


Consolidated Cash Flow Statement
For the period ended 3 June 2000

                                           2000       1999
                                          #'000      #'000
                                              
Net cash inflow from operating                
activities                                7,505      4,075
Returns on investments and servicing          
of finance                                 (223)      (263)
Taxation                                 (1,754)    (1,462)
Capital expenditure and financial             
investment                               (4,147)    (3,087)
Acquisitions and disposals                 (219)    (1,069)
Equity dividends                         (1,489)      (991)
                                         ------     ------
Cash outflow before management of             
liquid resources and financing             (327)    (2,797)
Financing                                    52      2,218
Decrease in cash in the period             (275)      (579)


Reconciliation to net debt
For the period ended 3 June 2000

                                              
                                           2000       1999
                                          #'000      #'000
                                              
Decrease in cash in the period             (275)      (579)
Cash outflow from decrease in debt            
and payment of finance leases               105        266
                                         ------     ------
Change in net debt resulting from             
cash flows                                 (170)      (313)
New finance leases                         (308)         -                    
                                         ------     -------
Movements in net debt in the period        (478)      (313)
Net debt at 29 May 1999                  (2,344)    (2,031)
                                      
Net debt at 3 June 2000                  (2,822)    (2,344)                   
                                         ------     ------
                                      

Notes:

1. Turnover is attributable to the Group companies of Topps Tiles Plc.

2. Basic earnings per share for the period has been calculated on earnings
(after the deduction of taxation) of #5,531,000 (1999: #4,036,000)and on
ordinary shares of 42,363,163 (1999: 40,767,771) being the weighted average
number of ordinary shares in issue during the period.

Basic adjusted earnings per share for the period has been calculated on
earnings before exceptional items (after the deduction of taxation) of
#6,011,000 (1999: #4,036,000) and on ordinary shares of 42,363,163 (1999:
40,767,771) being the weighted average number of ordinary shares in issue
during the period.

Fully diluted earnings per share for the period has been calculated with
regard to FRS 14 and is based on earnings (after the deduction of taxation) of
#5,531,000(1999: #4,036,000) and on ordinary shares of 44,384,414 (1998:
43,167,945).

3. The financial information set out above does not constitute the Group's
statutory financial statements for the period ended 3 June 2000 or 29 May
1999 but is derived from those statements.  Statutory financial statements for
1999 have been delivered to the Registrar of Companies and those for 2000 will
be delivered following the Company's Annual General Meeting.  The Auditors
have reported on the accounts to 29 May 1999; their report was unqualified and
did not contain statements under section 237(2) of the Companies Act 1985.

The Auditors have given an unqualified opinion on the accounts for the period
ended 3 June 2000 which will be delivered to the Registrar of Companies
following the Company's Annual General Meeting to be held on 5 September
2000.

4. An interim dividend of 1.00p per share was paid to shareholders of the
Company on 29 February 2000.  The directors recommend a final dividend of
3.33p per share to be paid on 2 October 2000 to shareholders on the register
on 4 September 2000, making a total dividend for the year of 4.33p per share
(1999: 3.23p per share).

5. The report and accounts for the period ended 3 June 2000 will be posted to
shareholders today and additional copies will be available from the Secretary
at the Company's registered office,Topps Tiles Plc, Rushworth House,Wilmslow
Road, Handforth,Cheshire, SK9 3HJ.