Final Results

Topps Tiles PLC
24 July 2001


NEWS RELEASE
24th July 2001


                               Topps Tiles Plc

                    The UK's largest ceramic tile specialist

             Preliminary Results for the 52 weeks ended 2 June 2001


Highlights


*    Turnover increased 19.2% to £74.642 million (2000: £62.614 million)

*    Gross margins increased to 55.0% (2000:  54.6%)

*    Profit before tax increased 17.4% to £9.414 million (2000: £8.018
     million)

*    13.0% increase in earnings per share to 14.8p (2000:  13.1p)

*    Final net dividend of 3.85p per share.  Total net dividend for the 
     year 5.00p

*    Sales for the period were 5.3% ahead on a like-for-like basis

*    Net total of 20 new stores opened during the year

*    Expansion into mainland Europe:  pilot store opened in Holland

*    Concession agreement with home improvement retailer, MFI

*    Like for like sales for the first seven weeks of the current year
     are 11% ahead of last year with total sales up 20%


Commenting on the results, Barry Bester, Chief Executive said:


'Despite our disappointment that we were unable to achieve the higher gross
margins in the second half of the year, we are beginning to see an improvement
filter through and we expect this to continue.

We are confident that we are well positioned to continue to increase both our
market share and profitability.  Our history of strong financial performance
and our ability to grow market share in an expanding market should enable us
to grow significant shareholder value.'


Enquiries:



Ann-Marie Wilkinson, Beattie Financial            020 7398 3300/07730 415019


Joint Statement by the Chairman and Chief Executive


Financial Results

We are pleased to announce another strong set of financial results showing
considerable growth for the year.  Topps Tiles achieved a 17.4% increase in
profit before tax to £9.414 million, from £8.018 million in 2000, with a 19.2%
increase in turnover to £74.642 million from £62.614 million last year.  Our
gross profits increased 20.2% to £41.090 million and sales for the period were
5.3% ahead on a like-for-like basis.

Whilst gross margins for the year overall were slightly ahead of those for the
same period last year (55.0% compared with 54.6% last year), we had budgeted
for an increase in gross margin in the second half of the year, but as
announced on 13 July 2001, this did not come through.  Whilst we continued to
enjoy strong margins on tile sales we did experience competitive pressures on
our wood flooring products.  We started to increase margins on our tile sales
in the second half, but due to the relatively slow stock turn in our industry,
such margin improvements did not flow through during the second half.   These
gains that we had expected in the second half are now starting to filter
through and we expect this to continue to grow steadily during this new
financial year.  Earnings per share increased by 13.0% to 14.8p compared to
13.1p in 2000.

Capital expenditure, excluding freehold property, amounted to £4.0m. This
reflects the cost of fitting 25 new stores at a cost of £1.8m (only 22 open
and trading in the period) and the refurbishment of a further 28 stores at a
cost of £1.2m.  We have also updated our store EPoS System at a cost of £0.6m.

During the year we acquired two freehold properties and developed a further
site at a total cost of £1.3m. We also disposed of one freehold property with
proceeds of £0.8m which gave a surplus over net book value of £0.3m.  The
Group currently owns twelve freehold properties with a net book value of £
4.2m.

At the period end cash balances for the Group were £2.2m and long term bank
loans were £2.7m.



Dividend

With sales for the current trading year indicating continued growth, the Board
is recommending a final dividend of 3.85p. The dividend will be paid on 1st
October 2001 to all shareholders on the register as at   7th September 2001.
The total dividend for the year is 5.00p per share against 4.33p for 2000, an
increase of over 15%.



Operational Review

The Group has made significant progress this year in what has been a busy and
exciting time.  We have further strengthened our position as the UK's largest
ceramic tile specialist.  The company has continued to expand across the UK,
opening a total of 22 new stores and closing two during the year. This gives
us a total of 147 trading outlets, comprising 121 Topps Tiles stores and 26
Tile Clearing House stores, further strengthening our leading position in the
UK market.

In June 2001 we opened our first store in Holland as a pilot to evaluate the
market potential in mainland Europe.  It is difficult at this early stage to
draw any long-term conclusions.  We have also entered into an agreement with
home improvement retailer, MFI that gives us an opportunity to take space in
their stores.  Our first in-store Tile Studio by Topps opened in December 2000
and we anticipate rolling out another four concessions this financial year
giving us an increased penetration into the home improvements market.  This is
an exciting opportunity and sales to date have been promising.  It is an
addition to our core business that we will monitor closely.

Stock levels have reduced from 205 days cover in May 2000 to 187 days cover at
the period end which reflects the continued efforts to achieve efficiencies in
our stock management.



Current Trading and Prospects

The ceramic tile market remains buoyant and is forecast to grow further.  Like
for like sales for the first seven weeks of the current year are 11% ahead of
last year with total sales up 20%.

We will continue our expansion across the UK, where our target is for a total
of over 350 outlets, and we plan to open 24 new outlets during the course of
the next financial year.  We will assess the results of both the new store in
Holland and the MFI concessions to determine our future strategy in these two
new areas.

We are confident that we are well positioned to continue to increase both our
market share and profitability. Our history of strong financial performance
and our ability to grow market share in an expanding market should enable us
to grow significant shareholder value.

Consolidated Profit and Loss Account for the period ended 2 June 2001


                                                 Notes        2001         2000
                                                             £'000        £'000

Turnover                                                    74,642       62,614
Cost of sales                                             (33,552)     (28,443)

Gross profit                                                41,090       34,171

Operating expenses
 - employee profit sharing                                 (2,266)      (1,959)
 - other operating expenses                               (29,187)     (23,963)
Operating profit before exceptional costs                    9,637        8,935
 - exceptional costs                                   2         -        (686)
Operating profit                                             9,637        8,249

Interest receivable and similar income                          84           17
Interest payable and similar charges                         (307)        (248)

Profit on ordinary activities before taxation                9,414        8,018
Tax on profit on ordinary activities                   3   (2,867)      (2,487)

Profit on ordinary activities after taxation                 6,547        5,531
Dividends                                              4   (2,245)      (1,844)

Transfer to reserves                                         4,302        3,687


Earnings per ordinary share
 - basic                                               5     14.8p        13.1p
 - basic adjusted                                      5     14.8p        14.2p
 - diluted                                             5     14.6p        12.5p


Consolidated Balance Sheet as at 2 June 2001

                                                               2001       2000
                                                              £'000      £'000

Fixed assets

Goodwill                                                        302        320
Tangible assets                                              16,236     12,918
                                                             16,538     13,238
Current assets

Stocks                                                       17,293     15,948
Debtors                                                       4,678      2,945
Cash at bank and in hand                                      2,206        435
                                                             24,177     19,328
Creditors: Amounts falling due within one year             (18,707)   (16,003)
Net current assets                                            5,470      3,325

Total assets less current liabilities                        22,008     16,563

Creditors: Amounts falling due after more than one year     (2,446)    (2,716)
Provisions for liabilities and charges                        (893)      (665)
Net assets                                                   18,669     13,182

Capital and reserves

Called-up share capital                                       5,601      5,309
Share premium                                                 1,005        112
Merger reserve                                                (399)      (399)
Profit and loss account                                      12,462      8,160
Equity shareholders' funds                                   18,669     13,182



Consolidated Cash Flow Statement for the period ended 2 June 2001

                                                     Notes     2001        2000
                                                              £'000       £'000


Net cash inflow from operating activities                6   11,019       7,505

Returns on investments and servicing of finance               (231)       (223)

Taxation                                                    (2,849)     (1,754)
Capital expenditure and financial investment                (4,834)     (4,147)
Acquisition and disposals                                         -       (219)
Equity dividends                                            (1,934)     (1,489)
Cash inflow (outflow) before financing                        1,171       (327)

Financing                                                       600          52
Increase / (decrease) in cash in the period              7    1,771       (275)



Notes to the Preliminary Announcement 2 June 2001


1.  Accounting Policies

The accounting policies used in the preparation of the accounts for the period
ended 2 June 2001 are consistent with those applied in the preceding period.


2.  Exceptional Costs

                                                               2001        2000
                                                              £'000       £'000

Discontinued activities                                           -         431
Tile City stock acquisition costs                                 -         255
                                                                  -         686


During the period ended 3 June 2000 further bathroom areas were removed from
existing Topps Tiles stores.  The directors also took the decision to write
off unsaleable stock, acquired from the receivers of 'Tile City', as part of
the total stock purchased.


3.  Tax on profit on ordinary activities

The tax charge comprises:
                                                             2001          2000
                                                            £'000         £'000

Corporation tax                                             2,639         2,117
Deferred taxation                                             228           370
                                                            2,867         2,487



4.  Dividends

An interim dividend of 1.15p per share was paid to shareholders of the Company
on 28 February 2001.  The directors recommend a final dividend of 3.85p per
share to be paid on 1 October 2001 to shareholders on the register on 7
September 2001, making a total dividend for the year of 5.00p per share (2000:
4.33p per share).



5.  Earnings Per Share

The calculation of earnings per share is based on earnings for the financial
period attributable to equity shareholders and the weighted average number of
ordinary shares as follows:


                                                                2001       2000
                                                           Number of  Number of
                                                              shares     shares
Weighted average number of shares:
For basic earnings per share                              44,218,175 42,363,163
Weighted average of shares under option                    2,802,600  2,750,380
Number of shares that would have been issued at fair     (2,219,604)  (729,129)
value
For diluted earnings per share                            44,801,171 44,384,414


An adjusted earnings per share figure has been shown in order to achieve
comparability period on period. The calculation uses the basic weighted
average number of shares together with basic earnings adjusted to exclude the
impact of exceptional items.


                                                    Basic          Adjusted
                                                  2001      2000   2001   2000
                                                 £'000     £'000  £'000  £'000
Profit on ordinary activities after tax          6,547     5,531  6,547  5,531
Exceptional items                                    -         -      -    686
Less notational taxation                             -         -      -  (206)
Profit attributable to equity shareholders       6,547     5,531  6,547  6,011



6.            Reconciliation of operating profit to operating cash flows

                                                              2001        2000
                                                             £'000       £'000

Operating profit                                             9,637       8,249
Deprecation                                                  1,474       1,070
Profit on disposal of fixed assets                           (344)       (463)
Goodwill amortisation                                           18          12
Increase in stocks                                         (1,345)     (2,663)
Increase in debtors                                        (1,113)     (1,006)
Increase in creditors                                        2,692       2,306
Net cash inflow from operating activities                   11,019       7,505


Included within net cash inflow from operating activities is an exceptional
cash receipt of £2,083,000 (2000 - £Nil) which represents amounts remitted by
the directors in respect of PAYE liabilities to be settled in the next
financial year.



7.            Analysis and reconciliation of net debt

                                                                  Other
                                                  2000          non-cash    2001
                                                       Cash-flow changes
                                                 £'000    £'000   £'000   £'000

Cash in hand and at bank                           435    1,771       -   2,206
Debt due within 1 year                           (281)      (4)       -   (285)
Debt due after 1 year                          (2,701)      264       - (2,437)
Finance leases                                   (275)      325   (234)   (184)
Net debt                                       (2,822)    2,356   (234)   (700)


                                                                   2001    2000
                                                                  £'000   £'000
Increase (decrease) in cash in the period                         1,771   (275)
Cash outflow from decrease in debt and finance                      585     105
leasing
Change in net debt resulting from cashflows                       2,356   (170)
New finance leases                                                (234)   (308)
Movements in net debt in the period                               2,122   (478)
Net debt at start of period                                     (2,822) (2,344)
Net debt at end of period                                         (700) (2,822)



The financial information set out above does not constitute the Group's
statutory financial statements for the period ended 2 June 2001 or 3 June 2000
but is derived from those statements. Statutory financial statements for 2000
have been delivered to the Registrar of Companies and those for 2001 will be
delivered following the Company's Annual General Meeting to be held on 11
September 2001. The Auditors have reported on the accounts to 3 June 2000;
their report was unqualified and did not contain statements under section 237
(2) or 237(3) of the Companies Act 1985.

The Auditors have not reported on the accounts for the period ended 2 June
2001 nor have any such accounts been delivered to the Registrar of Companies.

It is anticipated that the audited accounts for the period ended 2 June 2001
will be posted to shareholders on or around 7 August 2001.


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