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RNS Number : 2725E
Topps Tiles PLC
10 March 2022
10 March 2022
Topps Tiles Plc (the "Group")
Acquisition of Pro Tiler Ltd & Q2 Trading Update
Topps Tiles, the UK's leading tile specialist, announces the
acquisition of 60% of the issued share capital of Pro Tiler Ltd
("Pro Tiler"), an online specialist supplier of tiling-related
consumables and equipment to trade customers, and a trading update
for the second quarter of the financial year ending 1 October
2022.
Acquisition of Pro Tiler
The Group has acquired 60% of the issued share capital of Pro
Tiler, an online specialist supplier of tiling-related consumables
and equipment to trade customers (the "Initial Acquisition"). The
Group and Pro Tiler have also agreed put and call options relating
to the purchase by the Group of the remaining 40% of the issued
share capital of Pro Tiler, which are exercisable from March 2024
(the "Subsequent Acquisition", and together with the Initial
Acquisition, the "Acquisition").
Pro Tiler is a recognised and respected brand within the tiling
market which operates three online businesses: protilertools.co.uk,
northantstools.co.uk and premiumtiletrim.co.uk. Pro Tiler was
established in 2010 by Andy Bucknall, his wife Wendy, and their two
sons Sam and Todd. Andy, Sam and Todd all previously worked as
professional tilers and are well respected within the industry. As
part of this transaction, Andy and Wendy will retire from the
business while Sam and Todd will continue to run the day-to-day
operations of Pro Tiler.
Pro Tiler has delivered rapid growth in recent years through an
expansion of its product range and a focus on high quality service,
which has enabled it to serve an increasingly wide customer base.
In the financial year ended 31 March 2021, Pro Tiler reported
turnover of GBP9.3 million and profit before tax of GBP1.1
million(1) . In the current year, the business has continued to
grow and the turnover in the twelve months to 31 January 2022 was
GBP11.9 million. Pro Tiler is expected to benefit from the Group's
buying scale, flexible supply chain and financial resources to
support its further growth.
Consideration of GBP5.3 million (plus a GBP0.3 million closing
adjustment) was paid in cash on completion of the Initial
Acquisition for 60% of the issued share capital of the business.
The Group intends to acquire the remaining 40% of the issued share
capital from March 2024, based on an agreed multiple of profits for
the 12 month period to March 2024. Consideration for the Initial
Acquisition was financed from the Group's existing cash
balances.
The acquisition of Pro Tiler is a significant development in the
Group's growth strategy and an important first step into operating
a specialist online business alongside its award winning
omni-channel Retail business and Commercial brands. The Board
expects the Acquisition of Pro Tiler to be accretive to adjusted
earnings in the current financial year and beyond(2) .
Q2 Trading update
Retail trading in the second quarter to date has progressed
well, with sales for the first nine weeks growing by 18.2% on a two
year like-for-like basis and 45.6% on a one year like-for-like
basis (against a period of trading restrictions last year).
Q1 FY21 Q2 FY21 Q3 FY21 Q4 FY21 Q1 FY22 Q2 FY22
first 9
weeks
Two-year Retail
like-for-like
sales +13.0% -23.1% +12.9% +21.7% +21.0% +18.2%
-------- -------- -------- -------- -------- ---------
One-year Retail
like-for-like
sales +19.9% -17.3% +131.0% +3.0% +1.0% +45.6%
-------- -------- -------- -------- -------- ---------
Retail gross margins have also improved following management
actions on pricing, our costs remain well controlled despite
significant inflation and operating cash flows are in line with
expectations. The Group is confident of delivering adjusted profit
before tax in line with its expectations for the year as a
whole.
Our Commercial business has continued to deliver encouraging
sales growth, the order book is strong and we remain confident that
we will deliver an improved performance in the Commercial business
this year.
Rob Parker, Chief Executive, said: "Pro Tiler is a
well-respected brand with a strong customer service ethic, which
fits closely with our core values. The acquisition of an online
specialist supplier to trade customers complements our omni-channel
Retail business and Commercial brands. It also moves us closer to
our 20% market share goal of '1 in 5 by 2025' while maintaining our
specialism of tiling and related products. I look forward to
working with Sam and Todd Bucknall and helping them to take this
successful business forward into the next stage of its growth. The
development of our digital offer remains an important area of focus
for the Group and we have plans in place to expand this further in
2022.
"Trading for the year to date is in line with our plan and we
are confident of delivering performance in line with our
expectations."
The Group will announce its interim results for the 26 weeks to
2 April 2022 on 24 May 2022.
(1) Unaudited financial information: For the year to 31 March
2021, Pro Tiler delivered revenue of GBP9.3 million (FY20: GBP4.4
million) and a profit before tax of GBP1.1 million (FY20: GBP0.4
million). Pro Tiler's gross assets as at 31 March 2021 were GBP3.2
million (31 March 2020: GBP1.0 million).
(2) The accounting for the Acquisition will be under IFRS 3. As
required under this Standard, the consideration for the Subsequent
Acquisition will be expensed as employee remuneration over a
two-year period as opposed to being part of the acquisition
accounting due to certain requirements placed on Sam and Todd
Bucknall to remain employed by the Group during this period. This
income statement expense and any fair value adjustments will be
excluded from adjusted profits over this time period.
For further information please contact:
Topps Tiles Plc
Rob Parker, CEO
Stephen Hopson, CFO 0116 282 8000
Citigate Dewe Rogerson
Kevin Smith
Ellen Wilton 020 7638 9571
Notes to editors
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 314 nationwide Retail stores, 5 Commercial showrooms and three
trading websites: www.toppstiles.co.uk , www.parkside.co.uk and
www.stratatiles.co.uk .
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 on the Group, please visit
http://www.toppstilesplc.com/
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END
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