Interim Results

Topps Tiles PLC
15 January 2002


NEWS RELEASE

15TH January 2002


Topps Tiles Plc


Strong First Half Performance

Interim Results for the six months ended 1 December 2001


Highlights

-      Turnover increased to £46.403m (2000: £37.465m)          24% increase


-      Gross margins improved to 55.6% compared to 55% in same period last year


-      Pre tax profit excluding pilot scheme costs £6.218m 
       (2000: £5.022m)                                          24% increase


-      Pre tax profit including pilot scheme costs £5.909m 
       (2000: £5.022m)                                          18% increase


-      Earnings per share rose to 9.23p (2000: 8.05p)           15% increase


-      Interim net dividend declared of 1.35p (2000: 1.15p)     17% increase


-      Like for like sales in the period increased 12%


-      15 new stores opened in the period



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

'Trading in the first six weeks of the second half has started well with
overall sales showing an increase of 24% and 12% on a like for like basis.

The home improvement market is strong and we expect our market share to grow.
We continue to build our business for the long term and look forward with
confidence to meeting expectations for the current and future years.'



For further information contact:



Barry Bester, Chief Executive                      0207 398 3300 (today only)

Ann-marie Wilkinson, Beattie Financial             0207 398 3300/07730 415019



Joint Statement by the Chairman and Chief Executive

We are delighted to report an excellent first half performance.  The Group
continues to grow strongly and is now a well established brand in the home
improvement market.



Financial Results

                        2001                 2000               Change
                  Six months           Six months                    %
                       ended                ended
                  1 December           2 December
                       £'000                £'000


Turnover              46,403               37,465                 +24%

Gross Profit %          55.6%                55.0%

Profit before tax      5,909                5,022                 +18%

Earnings per share (p)  9.23p                8.05p                +15%

Interim net dividend 
 per share (p)          1.35p                1.15p                +17%



Results

Pre-tax profit for the six months to 1 December 2001 amounted to £5.909
million an increase of 18% over the same period last year.  However the core
business, excluding the pilot MFI and Holland schemes, showed a 24% increase
on a comparable basis.  Turnover increased to £46.403 million up 24%.
Earnings per share rose by 15% from 8.05p to 9.23p.

As we reported in our AGM statement in September the trend of trading began
well.  Since then we have seen further improvement. Growth in like-for-like
sales for the period was 12%, with overall sales growth in the same period at
24%.  Gross margins have improved to 55.6% compared to 55.0% in the same
period last year.

Capital expenditure, excluding freehold property, amounted to £1.653 million.
This reflects the 15 new stores opened in the period, 6 store refits and some 
further development of our I.T. systems.

The Group currently owns 11 freehold sites with a net book value of £3.739
million.

At the period end cash balances for the Group were £3.682 million and long
term bank loans were £1.590 million leaving the Group with no balance sheet
gearing.



Dividend

The Board is recommending an interim dividend of 1.35p per share (2000: 1.15p)
to be paid on 28 February 2002 to shareholders on the register as at 8 February 
2002.



Board

In September we were pleased to announce that Nick Ounstead was appointed
Chief Operating Officer.  Nick has made a smooth transition to this role
whilst continuing to oversee customer services and marketing.  We are
confident that we have a strong management team to drive the business forward.



Operational Review

We continued to expand during the period opening 14 stores in the United
Kingdom and one store in Holland. Two outlets at Openshaw and Speke were
closed during the period.  160 outlets were trading as at 1 December 2001
comprising: 130 Topps outlets (including the store in Holland) and 30 Tile
Clearing House stores.  We are on course to meet the target of 24 new stores
this financial year.

Our store in Holland, which has been trading since June 2001, has made
reasonable progress to date.  We will continue to monitor the pilot store's
performance before determining our future strategy in this area.  The trading
losses and set up costs to date for the project are £153k.

Whilst early sales figures of our Tile Studio concessions within MFI stores
were promising, the venture has not performed to our expectations and we
withdrew our presence in November.  The trading losses and exit costs totalled
£156k.  We will however continue to explore opportunities to enhance the
business and extend our distribution with minimum capital commitment.

Group stock levels have reduced from 184 days cover to 177 days cover compared
to the same period last year.

Operating costs in the period represented 42.6% of sales compared to 41.3% for
the same period last year.  However pre MFI and Holland costs, operating costs
were 41.7%. On an ongoing basis management is striving to reduce operating
costs further.



Current Trading and Prospects

Trading in the first 6 weeks of the second half has started well with overall
sales showing an increase of 24 % with a like-for-like increase of 12%
compared with the same period last year.

The outlook for the remainder of the year is positive and we expect our market
share to grow.  Profit growth will be driven by a combination of increased
turnover and improved margins.

The home improvement market is strong.  We enjoy a dominant position in an
expanding but fragmented ceramic tile marketplace.  We continue to build our
business for the long term and look forward with confidence to meeting
expectations for the current and future years.




Consolidated Group Profit and Loss Account

For the six months ended 1 December 2001


                                            Six months Six months        Period
                                                 ended ended              ended
                                            1 December    2 December     2 June
                                                  2001          2000       2001
                                             Unaudited     Unaudited    Audited
                                                 £'000         £'000      £'000


Turnover                                        46,403        37,465     74,642

Cost of Sales                                 (20,603)      (16,842)   (33,552)
Gross profit                                    25,800        20,623     41,090


Operating Expenses
 - employee profit sharing                     (1,612)       (1,057)    (2,266)
 - other operating expenses                   (18,153)      (14,430)   (29,187)
Profit on ordinary activities before             6,035         5,136      9,637
interest
Interest receivable and similar                     24            55         84
income
Interest payable and similar charges             (150)         (169)      (307)
Profit on ordinary activities before  1          5,909         5,022      9,414
taxation
Tax on profit on ordinary activities           (1,773)       (1,507)    (2,867)
Profit on ordinary activities after              4,136         3,515      6,547
taxation
Dividends                                        (607)         (520)    (2,245)
Transfer to reserves                             3,529         2,995      4,302

Earnings per share
-Basic                                           9.23p         8.05p     14.80p
-Diluted                                         9.17p         7.83p     14.60p



Note 1

Included within profit on ordinary activities before taxation are losses of 
£309,000 in respect of discontinued and overseas operations.

Topps Tiles has no recognised gains or losses in the period other than those
reflected in the profit and loss account.



Consolidated Group Balance Sheet

As at 1 December 2001
                                              1 December   2 December    2 June
                                                    2001         2000      2001
                                               Unaudited    Unaudited   Audited
                                                   £'000        £'000     £'000

Fixed assets
Goodwill                                             293          341       302

Tangible assets                                   16,167       13,930    16,236

                                                  16,460       14,271    16,538
Current assets
Stocks                                            18,000       15,997    17,293
Debtors                                            3,893        2,986     4,678
Cash at bank and in hand                           3,682        4,102     2,206
                                                  25,575       23,085    24,177
Creditors: Amounts falling due within one
year                                            (17,659)     (17,379)  (18,707)
Net current assets                                 7,916        5,706     5,470
Total assets less current liabilities             24,376       19,977    22,008
Creditors: Amounts falling due after more
than one year                                    (1,215)      (1,965)   (2,446)
Provisions for liabilities and charges             (893)        (665)     (893)

Net assets                                        22,268       17,347    18,669

Capital and reserves
Called-up share capital                            5,607        5,599     5,601
Share premium account                              1,069          992     1,005
Merger reserve                                     (399)        (399)     (399)
Profit and loss account
- brought forward                                 12,462        8,160     8,160
- current year                                     3,529        2,995     4,302
Equity shareholders' funds                        22,268       17,347    18,669




Consolidated Group Cashflow Statement

As at 1 December 2001

                                                  1 December 2 December  2 June
                                                        2001       2000    2001
                                                   Unaudited  Unaudited Audited
                                                       £'000      £'000   £'000


Net cashflow from operating activities                 6,661      7,673  11,019

Returns on investment and servicing of finance         (118)      (114)   (231)
Taxation                                             (1,133)    (1,076) (2,849)

Capital expenditure                                  (1,035)    (1,701) (4,834)

Equity dividends paid                                (1,726)    (1,419) (1,934)
                                                       2,649      3,363   1,171
Financing                                            (1,173)        304     600
Increase/(decrease) in cash                            1,476      3,667   1,771

Reconciliation of operating profit to net cash
inflow from operating activities
Operating profit                                       6,035      5,136   9,637
Depreciation charges                                     908        690   1,474
Profit on disposal of fixed assets                       (7)       (31)   (344)
Goodwill amortisation                                      9          9      18
Increase in stocks                                     (552)       (49) (1,345)
Increase in debtors                                      756       (41) (1,113)
Increase in creditors                                  (488)      1,959   2,692
                                                       6,661      7,673  11,019
Return on investments and servicing of finance
Interest received                                         24         55      84
Interest paid                                          (147)      (166)   (315)
Interest element of hire purchase rentals                (4)        (7)    (14)
Interest capitalised                                       9          4      14
                                                       (118)      (114)   (231)

Capital expenditure
Payments to acquire tangible fixed assets            (1,733)    (1,791) (5,157)
Receipts from sales of tangible fixed assets             698         90     323
                                                     (1,035)    (1,701) (4,834)

Financing

Proceeds from issue of ordinary share capital             70      1,178   1,196
Expenses in connection with issue of share                 -        (8)    (11)
capital
New loans                                                  -          -     603
Repayment of loans                                   (1,131)      (702)   (863)
Capital element of hire purchase rentals               (112)      (164)   (325)
                                                     (1,173)        304     600
Summary

Opening cash position                                  2,206        435     435
Movement                                               1,476      3,667   1,771
Closing cash position                                  3,682      4,102   2,206





Notes to the Accounts

For the six months ended 1 December 2001



1                    Basis of preparation

(a)        The interim report was approved by the board on 14 January 2002.
The financial information for the six months ended 1 December 2001 and similarly
the financial information for the six months ended 2 December 2000 have not been
audited.  The financial information for the period ended 2 June 2001 has been
extracted from the audited financial statements for that period.



(b)         The financial information contained in the interim report does not
constitute statutory

accounts as defined in section 240 of the Companies Act 1985. Statutory
accounts for the year ended 2 June 2001 incorporating an unqualified audit
report, which did not contain statements under section 237(2) or (3) of the
Companies Act 1985, have been filed with the Registrar of Companies.



(c)          The financial information contained in this interim report has
been prepared on the basis of

the accounting policies set out in the Group's statutory accounts for the
period ended 2 June 2001.


2                    Taxation

Corporation Tax for the six months ended 1 December 2001 has been provided for
at the estimated effective rate of 30%.


3                    Interim dividend

An interim net dividend of 1.35 pence per Ordinary Share (2000: 1.15 pence)
has been declared payable on 28 February 2002 to shareholders on the register
on 8 February 2002.


4                    Earnings per share

Basic earnings per share for the six months ended 1 December 2001 have been
calculated on earnings (after the deduction of taxation) of £4,136,000 (2000:
£3,515,000) and on Ordinary Shares of 44,823,367 (2000: 43,649,364), being the
weighted average of Ordinary Shares in issue during the period.

Fully diluted earnings per share for the six months ended 1 December 2001 have
been calculated on earnings (after the deduction of taxation) of £4,136,000
(2000: £3,515,000) and on Ordinary Shares of 45,115,540 (2000: 44,915,265)
being the weighted average of Ordinary Shares and Share Options in issue
during the period.


5                    Copies of the interim results

Copies of the interim results have been sent to shareholders, further copies
can be obtained from the Company's registered office at Rushworth House,
Wilmslow Road, Handforth, Wilmslow, Cheshire, SK9 3HJ.  Details are also
available on our website: toppstiles.co.uk.