Topps Tiles PLC Acquisition of Strata Tiles (5997W)

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RNS Number : 5997W

Topps Tiles PLC

18 April 2019

18 April 2019

Topps Tiles Plc

Acquisition of Strata Tiles

Topps Tiles Plc (the "Group"), the UK's leading tile specialist, announces the acquisition of 80% of the issued share capital of Strata Tiles Ltd ("Strata"), a supplier of tiles to the commercial market. The acquisition also involves the grant of put and call options relating to the purchase by the Group of the remaining 20% of the issued shares in Strata, which are exercisable in 2021.

Strata is a recognised and respected brand in commercial tile supply. With offices in Guildford and a showroom in Bermondsey, Strata is located close to its customer base within the architecture and design community and is a leading supplier of quality porcelain, polished concrete, mosaics, natural stone and technical stone tiles for commercial design projects. Key market segments include transport, retail, building cladding projects, university buildings and residential apartment blocks.

Established in 2002 by the vendors, Jonathan Wiles and Paul Wallis, who will remain with the business, Strata will be integrated into the Group's Commercial business unit, established following the acquisition of Parkside Tiles in August 2017. The Strata brand will be retained.

The acquisition of Strata will add additional scale to the Group's fast-growing commercial business as it seeks to build a leading position in the commercial tile market. Strata is expected to benefit from the Group's competitive advantage as the UK's leading tile specialist, particularly its product range and buying scale.

In the financial year ended March 2018 Strata reported turnover of GBP4.8m and profit before tax of GBP0.7m (unadjusted). The value of the gross assets that are the subject of the transaction is GBP1.5m. Consideration for the acquisition will be financed from the Group's existing bank facilities. The consideration will be paid in cash, with GBP3.3m (plus a GBP0.4m closing adjustment) being paid on completion of the initial acquisition of 80% of the issued share capital. Up to a further GBP2m will be paid on completion of the acquisition of the remaining 20% of the issued share capital, being subject to performance targets over a two-year period. Post the payment of the initial cash consideration, the net debt position of the group will be approximately GBP22m. The Board expects the acquisition of Strata to be accretive to earnings in the current year and beyond.

Matthew Williams, Chief Executive Officer, said: "Our commercial business is already expanding at pace, with sales in the first half growing by around three times year on year. The acquisition of Strata will accelerate this expansion and demonstrates our commitment to building a commercial business of quality and scale. Strata is a well-regarded and well-run business with a strong brand; and we look forward to welcoming the Strata team into the Topps Group."

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Enquiries:

 
 Topps Tiles Plc                              0116 282 8000 
 Matthew Williams, Chief Executive Officer 
 Rob Parker, Chief Financial Officer 
 
 Citigate Dewe Rogerson                       020 7638 9571 
 Kevin Smith / Nick Hayns 
 

Note to editors, about Topps Tiles Plc

Topps Tiles Plc is the UK's largest specialist supplier of tiles and associated products, targeting the UK domestic refurbishment and commercial market and serving a retail and trade customer base from 361 nationwide retail stores and three commercial showrooms.

Since opening its first store in 1963, Topps has maintained a simple operating philosophy - inspiring customers with unrivalled product choice and providing exceptional levels of customer service.

For further information, please visit http://www.toppstilesplc.com/

Important Notices

This announcement contains forward-looking statements with respect to the operations, performance and financial condition of the Group. By their nature, these statements are subject to risks, assumptions and uncertainties that could cause actual results to differ materially from those expressed or implied because they relate to future events.

Unless otherwise required by applicable law, regulation, the LR, the Financial Conduct Authority's Disclosure Guidance and Transparency Rules or accounting standard, the Group does not undertake to publicly update any forward-looking statements, whether as a result of new information, future developments or otherwise. Nothing in this announcement should be construed as a profit forecast.

This information is provided by RNS, the news service of the London Stock Exchange. RNS is approved by the Financial Conduct Authority to act as a Primary Information Provider in the United Kingdom. Terms and conditions relating to the use and distribution of this information may apply. For further information, please contact [e-mail] or visit www.rns.com.

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April 18, 2019 02:00 ET (06:00 GMT)