topps tiles plc
annual report and financial statements
2007 cautionary statement
this annual report has been prepared for the shareholders of topps tiles
plc as a body and no other persons its purpose is to assist shareholders
of the company to assess the strategies adopted by the group and the
potential for those strategies to succeed and for no other purpose the
company its directors employees agents or advisers do not accept or
assume responsibility to any other person to whom this document is
shown or into whose hands it may come and any such responsibility or 
liability is expressly disclaimed
this annual report contains certain forwardlooking statements that are
subject to risk factors associated with amongst other things the 
economic and business circumstances occurring from time to time in the 
countries sectors and markets in which the group operates it is believed
that the expectations reflected in these statements are reasonable but
they may be affected by a wide range of variables which could cause 
actual results to differ materially from those currently anticipated
no assurances can be given that the forwardlooking statements in this
annual report will be realised the forwardlooking statements reflect the
knowledge and information available at the date of preparation of this
annual report and the company undertakes no obligation to update these
forwardlooking statements
nothing in this annual report should be construed as a profit forecast
topps tiles
contents
stuart williams
group president and cofounder
01 highlights
02 chairman’s statement 
05 chief executive’s statement  
08 business review
15 corporate and social responsibility 
18 directors
19 nonexecutive directors  
20 directors and advisors
22 directors’ report
25 corporate governance statements  
27 remuneration report
30 independent auditors’ report  consolidated financial 
statements
32 consolidated group income statement
32 consolidated statement of recognised income and expense
33 consolidated balance sheet
34 consolidated cash flow statement
35 notes to the consolidated financial statements 
55 independent auditors’ report  company financial 
statements
56 company balance sheet
57 notes to the company financial statements
61 five year record
62 notice of annual general meeting
65 explanatory notes to the notice of annual general meeting
67 shareholder information
68 the team
72 store locations
this year marked the tenth anniversary of the flotation 
of the company
our financial performance over this period eps growth of nearly
800 and overall shareholder return in excess of £200m is one in
which we take great pride in having delivered
the company has over many years successfully met the challenges
of changing market conditions  competition
i am confident that it will do so in the future as it continues with its
expansion in a growing market topps tiles plc
annual report  financial statements 2007
01
highlights 52 week period results to 29 september 2007 2006 52 weeks
 group likeforlike revenue increased by 47
 group gross margin increased to 628 2006 626
 operating profit increased to £443m 2006 £389m
 profit before tax £37 8m 2006 £391m
 adjusted basic earnings per share of 1494 pence 2006 
1319 pence
 basic earnings per share of 1509 pence 2006 1280 pence
 dividend policy maintained at 141 times cover
 a final net dividend of 695 pence per share to be paid on 
31 january 2008
 net debt position of £952m 2006 £995m
 a net 30 new stores opened in the uk in this financial period
 now trading from 301 stores in the uk 2006 271 stores
 20 stores now trading in holland 2006 15 stores
adjusted for non recurring items
2006 property disposal gains of £03 million and share buy back costs of £11 million
2007 property disposal gains of £03 million
154
group revenue increased by 154 to
£207 9 million 2006 £1802 million
14  1
group operating profit increased by 141
to £443 million 2006 £389 million 1998
topps tiles floated on stock
exchange achieves plc status
total number of stores
54
1997
topps tiles plc
annual report  financial statements 2007
02
chairman’s statement
milestones
this year marked the 10th
anniversary of our listing on the
london stock exchange i am 
delighted to report that once again
we have delivered another strong
set of results proving the 
success of our strategy and the 
strength of our brand
the past decade has been an exciting time in the 
company’s history we have transformed the business
from a modest 54 store outfit with 301 staff to a
european operation with over 321 stores and 1722 
employees in the uk and holland
total shareholder return since listing has been excellent
£100 invested in 1997 would have grown to £2822 
outperforming the ftse250 by over 800 in the past 10
years we have returned over £200 million to shareholders
by way of dividends and share buybacks
financial results
total group revenue increased 154 to £2079 million
2006 £1802 million with likeforlike revenue for the
period up 47 on last year which we have achieved
despite the continuing challenging retail market
operating profit for the period was £443 million 2006
£389 million giving a profit before tax of £378 million
     
total number of stores
50
2006 £391 million impacted by a higher interest charge
as a result of the refinancing for the share buy back
basic earnings per share increased to 1509 pence 2006
1280 pence
dividend
in line with our progressive dividend policy the board is
recommending a final dividend of 695 pence per share
this once approved by shareholders at the annual
general meeting is payable on 31 january 2008 to all
shareholders on the register as at 4 january 2008 this
brings the total dividend to 1070 pence per share an
increase of 29 on 2006
board changes
in march this year we announced the appointment of
robert parker as finance director succeeding andrew
liggett who left the company in april on behalf of the
entire board i extend a warm welcome to rob
1995 1996 1999 2000
merger of topps tiles and 
tile kingdom
acquired 20 
tile city stores
topps becomes a dedicated
tile specialist
total number of stores
100 topps tiles plc
annual report  financial statements 2007
03
grove park 
distribution 
centre opened
total number of stores
250
total number of stores
300
total number of stores
150
we also announced in september that nick ounstead who
has been chief executive officer for the last five years
would be taking on a new executive board role of
business development director with responsibility for
buying holland and group business development i would
like to thank nick for his leadership and contribution to
topps throughout his tenure as chief executive
matt williams succeeded nick as chief executive officer
from 1st november 2007 matt joined topps in 1998 in 
the property department he was promoted to chief
operating officer in 2004 and joined the board in 2006
matt is already demonstrating his ability and drive and i
am confident that with this first class executive team we
have the best management in place to take the business
forward
people 
exceptional customer service is the core of our business
and critical to our continued success it is our people and
not our products that achieve this
i would like to extend the board’s thanks and gratitude to
everyone in the company for their constant efforts in
helping us to realise value for our shareholders
outlook
as the business continues to grow in size revenue and
market share we maintain our investment in the future of
the business and our people 
the business is in excellent shape and in very capable
hands and i am confident that we will continue to achieve 
sustainable growth and deliver value for our shareholders
in 2008 and beyond
barry bester
chairman
     2 00 1 2002 2003 2004 2005 2006 2007
remaining 50 of dutch
joint venture acquired
£200m 
turnover
winner of plc company 
of the year award 2003  2004
£100m turnover
first dutch store opened in
sliedrecht near rotterdam
dutch joint venture 
formed
total number of stores
200
£150m turnover topps tiles plc
annual report  financial statements 2007
04
our 
core brands
the group trades
under three core
brand names
topps tiles
operating from 246 stores nationwide
topps tiles still maintain their no 1 
position as the uk’s largest supplier of
ceramic wall  floor tiles – natural stone
– laminate  real wood for domestic and
commercial use
since 1963 it’s been at the forefront of the company’s policy to
offer the very best customer service that is honest helpful and 
knowledgeable but never pushy this is backed up by offering
value for money with a host of unique consumer benefits like
the topps free ‘how to’ dvd a 45 day return  buy back service
a lifetime guarantee on all bal adhesives  grouts and many
more
with the company’s continuous drive and focus on customer
service we are confident that the business will maintain its 
competitive position
topps 
holland
trading since 2002 
topps floorstore with its 20 stores across holland
is the leading specialist of wood flooring in holland 
we continue to develop the business and with 
an increasing focus on the ceramic tile offer we
believe the brand will go from strength to strength
we believe that there is an opportunity for in
excess of 60 stores
tile clearing
house
tile clearing house has become a
brand of its own operating from 55
stores in the uk which to date
makes it the second largest tile
group in the uk behind topps tiles 
this brand is aimed at a slightly different consumer 
sector which in the main are jobbing builders small 
contractors and bulk purchases with the addition of end
of line and discontinued products but offering greater
stock levels of these products the tile clearing house
brand is in prominent positions in towns where topps
tiles are sited topps tiles plc
annual report  financial statements 2007
05
chief executive’s statement
we have again this year 
demonstrated the strength of our
strategy and our organic growth
our market leading position
excellent customer service and
committed staff have all 
contributed to another solid year
despite a tough home improvement
market
tile clearing house “tch”
tile clearing house our “cash and carry” offering has had
a strong trading period we have opened a net 9 new tch
outlets and the format continues to prove popular with
both trade customers and jobbing builders we now have
a total of 55 stores in the uk new locations include
dartford southend plymouth and lincoln 
holland
against the backdrop of a stable market we have seen
good growth in sales and profits in our dutch business
we opened a further five stores taking the total to 20
our marketing activity has been at a local level to date
however as we experienced with the uk market as we
begin to reach a size that brings scalable benefits we
anticipate increasing our advertising and marketing to a
national audience we continue to improve the mix of
sales with 25 now coming from tiles and the remainder
from wood flooring accessories and adhesives plans for
the current year include the opening of a minimum of a 
further five new stores
uk store development and expansion
we are pleased to have again achieved our store opening
target of 30 net new stores in the period giving us an
overall total of 301 trading outlets throughout the uk we
have modified the target going forward to a minimum of
20 net new stores reflecting a wider focus on improving
and renewing the estate  
topps tiles
we have opened 25 stores in new locations rebranded 2
from the tch format refitted 10 outlets and closed or
relocated a further 6 giving us a total of 246 topps
stores new locations include crewe sheffield gloucester
aylesbury scarborough brixton and byfleet
we continue to develop our store portfolio and have now
rolled out our new format across a total of 65 stores the
new enhanced display formats are proving popular with
both customers and staff we introduced a number of new
ranges with a particular focus on natural products due to
their increasing popularity 
our aim is simple – to deliver sustainable
growth and returns to shareholders and 
central to that aim are our customers we
strive to enhance our customers’ buying
experience by constantly improving stores
and ranges and offering the best in customer
service topps tiles plc
annual report  financial statements 2007
06
marketing advertising and sponsorship
over the last year we have maintained our national and
regional marketing and advertising campaigns with
carlton weather and our sponsorship of the uk style
channel
this year we also signed a sponsorship deal with leicester
city football club to coincide with the kickoff of the new
football season in august although a commercial deal we
very much see this as an extension to our community
youth football initiative topps tiles is britain’s biggest
supporter of community youth football and we currently
sponsor around 300 local teams nationwide 
staff development and customer service
recruiting and retaining ambitious people at topps is a
core part of our strategy we place significant emphasis
on the training and development of our employees we
have continued to develop our elearning training system
in store with a number of new courses 
chief executive’s statement continued
group revenue was £2079m an increase of
154 on last year with likeforlike revenue
for the period up 47 group operating profit
was £443 million an increase of 141 
compared with last year
we differentiate our business from the competition in a
number of ways all of our stores carry a wide range and
supply of stock we offer a loanatile service a free “how
to” dvd a tile cutting service and a buyback service
allowing customers to “sell back” undamaged tiles within
45 days of purchase these services coupled with friendly
and knowledgeable staff offering technical advice led to
976 of customers surveyed expressing levels of 
satisfaction as ‘good to excellent’ 2006 991
corporate responsibility
topps believes in conducting its business in a manner
which achieves sustainable growth whilst incorporating
and demonstrating social responsibility our policy is 
published on our website at wwwtoppstilescouk and
more detail on our achievements can be found later in
this report
the board takes regular account of social environmental
and ethical matters in the business of the group and
believes in being responsible in the way that it conducts
its operations  topps tiles plc
annual report  financial statements 2007
07
a requirement for a broader product offering and also a
trend towards refurbishing traditional rooms more 
regularly
alongside these consumer trends household numbers
continue to grow faster than the uk population which is
anticipated to rise by 12 over the next 25 years source
ons this is in contrast to the increasing number of
households which is expected to grow by almost 23 in
the next 20 years from 209m in 2003 to 257m in 2026
3 million of these are expected to be built by 2020
source government forecasts
we therefore believe topps is well placed to benefit from
these consumer and housing trends driving the growth in
the tile market 
current trading and outlook              
in the first 7 weeks of the new financial period group
overall revenue increased by 84 and like for like sales
by 11
in the uk revenue increased 81 and like for like sales by
10 in holland overall sales increased 181 with like for
like sales up 25
we have had a challenging but positive start to the new
financial period and there remains an underlying growth
trend in the retail tile market whilst we believe the
prospects for the future growth of topps tiles remain
broadly positive we must not underestimate the potential
impact that this year’s turmoil in financial markets will
ultimately have on consumers  
matthew williams
chief executive officer
topps is pleased to be a constituent member of the
ftse4good uk index
the market
we are the leading tile retailer in the uk with an estimated
market share of in excess of 22 and we have continued
to grow market share over the last financial year
the home improvement retail sector continues to see
overall expansion and the uk tile market is forecast to
grow by volume by over 15 between 2007 and 2011
source mbd
there is significant potential for growth in our 
marketplace with the uk still having one of the lowest
usages per head of ceramic tiles in europe at a level
around one third of that of other northern european
countries source mbd consumers are becoming more
demanding and buying trends are showing the desire to
tile rooms beyond the traditional kitchen and bathroom
47
likeforlike sales growth
628
overall group gross margin
2006 626 topps tiles plc
annual report  financial statements 2007
08
nature objectives and strategies of the business
topps tiles is a specialist tile  wood flooring retailer with
operations in the uk and holland
in the uk we are the country’s largest retailer of our kind
with 301 stores and a 22 market share we operate two
retail brands topps tiles and tile clearing house topps is
the uk’s leading branded tile retailer with 246 stores
offering wall and floor tiles natural stone laminate solid
wood flooring and a comprehensive range of associated
products such as underfloor heating adhesives and
grouts tile clearing house is the biggest clearance tile
retailer in the uk with 55 stores nationwide focussing on
a mini warehouse type format and a “when it’s gone it’s
gone” style customer offer
we have a growing european operation in holland with 20
stores trading with a similar style customer offer to the
topps uk stores
the topps’ strategy which has been in place for a number
of years has served the business extremely well  to be a
specialist tile retailer operating from prominent low
rental locations offering customers a wide range of 
quality products with fantastic service at attractive prices
from this comes the four cornerstones of our competitive
advantage – customer service store locations store 
layout and stock availability this has enabled us to 
deliver 10 years of successful financial results build an
economically attractive and resilient business and become
the market leading brand in the uk
business review
in the uk we are the country’s largest 
retailer of our kind with 301 stores and a 22 
market share
301
stores trading across the uk
22
group share of the uk tile market key operational objectives for the uk and holland
 continue our expansion of stores in the uk towards our
stated objective of over 400 stores across both brands
 consolidate our position as the national brand for tiles 
and wood flooring
 improve the economic returns in our dutch operation 
towards the levels we generate in the uk – principally 
by improving sales density and product mix to improve 
gross margins and continue our expansion to a 
minimum of 60 stores
 continue to develop our in store customer offer to 
ensure that we are always ahead of our competitors
 to continuously review our store estate ensuring the 
appropriate number of new openings refits and 
closures are commensurate with availability and 
economic environment
financial objectives
 financial reporting is a cornerstone of any successful 
business and it is imperative that we deliver the right 
information to the right people at the right time we 
include management employees investors and other 
stakeholders in this process and strive to be as
transparent and honest in our reporting as possible
 we plan to grow dividends for shareholders broadly in 
line with earnings subject to the investment needs of 
the business and an acceptable level of dividend cover 
 we will seek to maintain an appropriate capital 
structure financing our operations through a 
combination of retained profits and bank borrowings
 treasury management is now a key part of our financial
objectives and we will continue to manage our day to 
day cash reserves as effectively as possible and 
minimise the overall group interest charge
 reviewing all of our suppliers and ensuring that we are 
receiving good value for money is an important aspect 
of any financial agenda we will continue with this 
process and will commence a three year rolling review 
of all non stock suppliers where benchmarking and 
tendering processes will be actively employed
key performance indicators kpis
the directors monitor a number of financial metrics and
kpis for the company and by individual store including


Summary:
 topps tiles plc
annual report  financial statements 2007
05
chief executive’s statement
we have again this year 
demonstrated the strength of our
strategy and our organic growth
our market leading position
excellent customer service and
committed staff have all 
contributed to another solid year
despite a tough home improvement
market
tile clearing house “tch”
tile clearing house our “cash and carry” offering has had
a strong trading period we have opened a net 9 new tch
outlets and the format continues to prove popular with
both trade customers and jobbing builders we now have
a total of 55 stores in the uk new locations include
dartford southend plymouth and lincoln 
holland
against the backdrop of a stable market we have seen
good growth in sales and profits in our dutch business
we opened a further five stores taking the total to 20
our marketing activity has been at a local level to date
however as we experienced with the uk market as we
begin to reach a size that brings scalable benefits we
anticipate increasing our advertising and marketing to a
national audience we continue to improve the mix of
sales with 25 now coming from tiles and the remainder
from wood flooring accessories and adhesives plans for
the current year include the opening of a minimum of a 
further five new stores
uk store development and expansion
we are pleased to have again achieved our store opening
target of 30 net new stores in the period giving us an
overall total of 301 trading outlets throughout the uk we
have modified the target going forward to a minimum of
20 net new stores reflecting a wider focus on improving
and renewing the estate  
topps tiles
we have opened 25 stores in new locations rebranded 2
from the tch format refitted 10 outlets and closed or
relocated a further 6 giving us a total of 246 topps
stores new locations include crewe sheffield gloucester
aylesbury scarborough brixton and byfleet
we continue to develop our store portfolio and have now
rolled out our new format across a total of 65 stores the
new enhanced display formats are proving popular with
both customers and staff we introduced a number of new
ranges with a particular focus on natural products due to
their increasing popularity 
our aim is simple – to deliver sustainable
growth and returns to shareholders and 
central to that aim are our customers we
strive to enhance our customers’ buying
experience by constantly improving stores
and ranges and offering the best in customer
service topps tiles plc
annual report  financial statements 2007
06
marketing advertising and sponsorship
over the last year we have maintained our national and
regional marketing and advertising campaigns with
carlton weather and our sponsorship of the uk style
channel
this year we also signed a sponsorship deal with leicester
city football club to coincide with the kickoff of the new
football season in august although a commercial deal we
very much see this as an extension to our community
youth football initiative topps tiles is britain’s biggest
supporter of community youth football and we currently
sponsor around 300 local teams nationwide 
staff development and customer service
recruiting and retaining ambitious people at topps is a
core part of our strategy we place significant emphasis
on the training and development of our employees we
have continued to develop our elearning training system
in store with a number of new courses 
chief executive’s statement continued
group revenue was £2079m an increase of
154 on last year with likeforlike revenue
for the period up 47 group operating profit
was £443 million an increase of 141 
compared with last year
we differentiate our business from the competition in a
number of ways all of our stores carry a wide range and
supply of stock we offer a loanatile service a free “how
to” dvd a tile cutting service and a buyback service
allowing customers to “sell back” undamaged tiles within
45 days of purchase these services coupled with friendly
and knowledgeable staff offering technical advice led to
976 of customers surveyed expressing levels of 
satisfaction as ‘good to excellent’ 2006 991
corporate responsibility
topps believes in conducting its business in a manner
which achieves sustainable growth whilst incorporating
and demonstrating social responsibility our policy is 
published on our website at wwwtoppstilescouk and
more detail on our achievements can be found later in
this report
the board takes regular account of social environmental
and ethical matters in the business of the group and
believes in being responsible in the way that it conducts
its operations  topps tiles plc
annual report  financial statements 2007
07
a requirement for a broader product offering and also a
trend towards refurbishing traditional rooms more 
regularly
alongside these consumer trends household numbers
continue to grow faster than the uk population which is
anticipated to rise by 12 over the next 25 years source
ons this is in contrast to the increasing number of
households which is expected to grow by almost 23 in
the next 20 years from 209m in 2003 to 257m in 2026
3 million of these are expected to be built by 2020
source government forecasts
we therefore believe topps is well placed to benefit from
these consumer and housing trends driving the growth in
the tile market 
current trading and outlook              
in the first 7 weeks of the new financial period group
overall revenue increased by 84 and like for like sales
by 11
in the uk revenue increased 81 and like for like sales by
10 in holland overall sales increased 181 with like for
like sales up 25
we have had a challenging but positive start to the new
financial period and there remains an underlying growth
trend in the retail tile market whilst we believe the
prospects for the future growth of topps tiles remain
broadly positive we must not underestimate the potential
impact that this year’s turmoil in financial markets will
ultimately have on consumers  
matthew williams
chief executive officer
topps is pleased to be a constituent member of the
ftse4good uk index
the market
we are the leading tile retailer in the uk with an estimated
market share of in excess of 22 and we have continued
to grow market share over the last financial year
the home improvement retail sector continues to see
overall expansion and the uk tile market is forecast to
grow by volume by over 15 between 2007 and 2011
source mbd
there is significant potential for growth in our 
marketplace with the uk still having one of the lowest
usages per head of ceramic tiles in europe at a level
around one third of that of other northern european
countries source mbd consumers are becoming more
demanding and buying trends are showing the desire to
tile rooms beyond the traditional kitchen and bathroom
47
likeforlike sales growth
628
overall group gross margin
2006 626