Last close As at 05/08/2026
GBP0.36
▲ 1.90 (5.56%)
Market capitalisation
GBP71m
Research: Consumer
Topps Tiles’ (TPT’s) FY23 trading update indicates the company has delivered on consensus market profit expectations with a third consecutive year of record revenue. Management’s stated ‘significant outperformance’ versus the UK tiling market is testimony to its strategy of developing and diversifying its operations. It believes there has been rapid progress towards the early delivery of its ‘1 in 5 by 2025’ market share target. Of equal importance is the contribution from the expected increase in the Topps Tiles brand’s (Omnichannel) gross margin through the year as inflationary cost pressures eased.
Topps Tiles |
Share gains with easing cost pressures in FY23 |
FY23 trading update |
Retail |
4 October 2023 |
Share price performance
Business description
Next events
Analysts
Topps Tiles is a research client of Edison Investment Research Limited |
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Topps Tiles’ (TPT’s) FY23 trading update indicates the company has delivered on consensus market profit expectations with a third consecutive year of record revenue. Management’s stated ‘significant outperformance’ versus the UK tiling market is testimony to its strategy of developing and diversifying its operations. It believes there has been rapid progress towards the early delivery of its ‘1 in 5 by 2025’ market share target. Of equal importance is the contribution from the expected increase in the Topps Tiles brand’s (Omnichannel) gross margin through the year as inflationary cost pressures eased.
Year end |
Revenue (£m) |
PBT* |
EPS* |
DPS |
P/E |
Yield |
09/21 |
228.0 |
16.5 |
6.7 |
3.1 |
7.1 |
6.5 |
09/22 |
247.2 |
16.4 |
6.4 |
3.6 |
7.5 |
7.5 |
09/23e |
263.0** |
13.2 |
4.8 |
3.6 |
10.1 |
7.5 |
09/24e |
272.9 |
14.2 |
5.0 |
3.6 |
9.5 |
7.5 |
09/25e |
286.4 |
15.6 |
5.7 |
3.6 |
8.5 |
7.5 |
Note: *PBT and EPS are normalised, excluding amortisation of acquired intangibles, exceptional items and share-based payments. EPS is fully diluted. **Reported.
FY23 revenue marginally ahead of our estimates
Group revenue grew by 6.4% y-o-y to c £263m (FY22: £247.2m), marginally ahead of our prior estimate of £261.3m. The year-on-year growth rate for total revenue reduced as the year progressed, as it did for the core Topps Tiles brand (we estimate 88% of total revenue), which finished the year with like-for-like growth of 3.1% (H123: 4.3%). While the deteriorating macroeconomic backdrop was likely not helpful, we believe lower price inflation accounts for some of the lower revenue growth offset by an improvement in volume trends through the year. Online Pure Play’s growth continued to be very strong at approximately 50% for the year on an underlying basis, which is pleasing in the first full year of ownership. Commercial’s revenue was not quantified but management points to a reassuring move back to profitability in Q423 following the business improvement plan, as guided.
FY23 profit guidance reiterated
Management has reiterated that TPT’s FY23 adjusted profit before tax will be in line with current market expectations of £11.3–12.3m, unchanged since the Q323 trading update, for which the range narrowed upwards from £10.6–12.3m at the H123 results. This includes the guided improvement in Omnichannel’s gross profit through every quarter of the year. Note that our definition of PBT differs slightly to consensus as we exclude estimated share-based payments of c £1.4m in FY23. We have nudged up our revenue figure for FY23 to be consistent with the trading update, but make no other changes to our FY23–25 estimates.
Valuation: Discount to historical EV/sales multiples
Sentiment on the macroeconomic environment continues to weigh on the share price. The prospective FY24 EV/sales multiple of 0.3x remains at a significant discount to prior periods, excluding COVID, when similar rates of revenue growth and profitability as we forecast in FY24 and FY25 were delivered – see Exhibits 15 and 16 of our initiation note.
Exhibit 1: Financial summary
£m |
2021 |
2022 |
2023e |
2024e |
2025e |
||
Year end 30 September |
IFRS |
IFRS |
IFRS |
IFRS |
IFRS |
||
INCOME STATEMENT |
|||||||
Revenue |
|
|
228.0 |
247.2 |
263.0 |
272.9 |
286.4 |
Cost of Sales |
(97.3) |
(111.8) |
(123.0) |
(126.7) |
(133.8) |
||
Gross Profit |
130.7 |
135.4 |
140.0 |
146.2 |
152.6 |
||
EBITDA |
|
|
47.6 |
44.6 |
40.8 |
42.1 |
43.9 |
Operating profit (before amort. and excepts.) |
|
|
20.6 |
20.3 |
16.8 |
17.7 |
19.1 |
Amortisation of acquired intangibles |
0.0 |
0.0 |
0.0 |
0.0 |
0.0 |
||
Exceptionals |
(1.9) |
(5.0) |
(5.4) |
(1.6) |
0.0 |
||
Share-based payments |
(0.7) |
(0.5) |
(1.4) |
(1.4) |
(1.4) |
||
Reported operating profit |
18.0 |
14.8 |
10.1 |
14.8 |
17.8 |
||
Net Interest |
(4.1) |
(3.9) |
(3.6) |
(3.6) |
(3.5) |
||
Exceptionals |
0.0 |
0.0 |
0.0 |
0.0 |
0.0 |
||
Adjusted Profit Before Tax (company) |
|
|
15.0 |
15.6 |
11.8 |
12.8 |
14.3 |
Profit Before Tax (norm) |
|
|
16.5 |
16.4 |
13.2 |
14.2 |
15.6 |
Profit Before Tax (reported) |
|
|
14.0 |
10.9 |
6.4 |
11.2 |
14.3 |
Reported tax |
(3.3) |
(1.8) |
(2.4) |
(3.6) |
(3.9) |
||
Profit After Tax (norm) |
13.3 |
12.8 |
9.9 |
10.3 |
11.3 |
||
Profit After Tax (reported) |
10.7 |
9.2 |
4.0 |
7.7 |
10.3 |
||
Minority interests |
(0.0) |
(0.2) |
(0.4) |
(0.2) |
0.0 |
||
Net income (normalised) |
13.3 |
12.6 |
9.5 |
10.0 |
11.3 |
||
Net income (reported) |
10.6 |
9.0 |
3.6 |
7.4 |
10.3 |
||
Average Number of Shares Outstanding (m) |
195 |
196 |
197 |
198 |
199 |
||
EPS - basic normalised (p) |
|
|
6.81 |
6.44 |
4.80 |
5.07 |
5.69 |
EPS - normalised fully diluted (p) |
|
|
6.73 |
6.37 |
4.77 |
5.04 |
5.66 |
EPS - basic reported (p) |
|
|
5.46 |
4.60 |
1.81 |
3.76 |
5.19 |
EPS - adjusted (company) (p) |
|
|
6.02 |
6.14 |
3.86 |
4.34 |
5.19 |
Dividend (p) |
3.10 |
3.60 |
3.60 |
3.60 |
3.60 |
||
Revenue growth (%) |
18.2 |
8.4 |
6.4 |
3.8 |
5.0 |
||
Gross Margin (%) |
57.3 |
54.8 |
53.2 |
53.6 |
53.3 |
||
Normalised Operating Margin |
9.0 |
8.2 |
6.4 |
6.5 |
6.7 |
||
BALANCE SHEET |
|||||||
Fixed Assets |
|
|
122.5 |
119.0 |
118.7 |
118.4 |
117.9 |
Intangible Assets |
0.5 |
7.5 |
7.0 |
6.5 |
6.0 |
||
Tangible Assets |
119.1 |
109.4 |
109.6 |
109.8 |
109.9 |
||
Investments & other |
2.9 |
2.1 |
2.1 |
2.1 |
2.1 |
||
Current Assets |
|
|
65.6 |
61.8 |
64.8 |
62.6 |
68.5 |
Stocks |
32.8 |
38.6 |
42.5 |
43.7 |
46.2 |
||
Debtors |
4.5 |
6.4 |
6.6 |
6.7 |
6.9 |
||
Cash & cash equivalents |
27.8 |
16.2 |
15.2 |
11.6 |
14.9 |
||
Other |
0.5 |
0.5 |
0.5 |
0.5 |
0.5 |
||
Current Liabilities |
|
|
(69.3) |
(63.3) |
(67.0) |
(69.6) |
(72.6) |
Creditors |
(47.4) |
(43.7) |
(47.7) |
(50.2) |
(53.2) |
||
Tax and social security |
(2.0) |
(1.2) |
(1.2) |
(1.2) |
(1.2) |
||
Short term borrowings |
0.0 |
0.0 |
0.0 |
0.0 |
0.0 |
||
Leases |
(19.5) |
(18.2) |
(18.2) |
(18.2) |
(18.2) |
||
Other |
(0.4) |
(0.4) |
(0.0) |
(0.0) |
(0.1) |
||
Long Term Liabilities |
|
|
(93.8) |
(88.4) |
(89.7) |
(82.9) |
(80.9) |
Long term borrowings |
0.0 |
0.0 |
0.0 |
0.0 |
0.0 |
||
Leases |
(91.8) |
(84.7) |
(82.8) |
(80.8) |
(78.8) |
||
Other long term liabilities |
(2.0) |
(3.7) |
(6.9) |
(2.1) |
(2.1) |
||
Net Assets |
|
|
25.0 |
29.0 |
26.8 |
28.5 |
33.0 |
Minority interests |
0.0 |
2.5 |
2.9 |
0.0 |
0.0 |
||
Shareholders' equity |
|
|
25.0 |
31.5 |
29.8 |
28.5 |
33.0 |
CASH FLOW |
|||||||
Operating Cash Flow |
47.6 |
44.6 |
40.8 |
42.1 |
43.9 |
||
Working capital |
(14.6) |
(11.0) |
(0.0) |
1.1 |
0.3 |
||
Exceptional & other |
(0.8) |
(3.4) |
(2.6) |
(0.2) |
0.0 |
||
Tax |
(1.5) |
(3.5) |
(2.4) |
(3.6) |
(3.9) |
||
Net operating cash flow |
|
|
30.6 |
26.8 |
35.7 |
39.5 |
40.3 |
Capex |
(2.3) |
(3.0) |
(6.0) |
(6.4) |
(6.6) |
||
Acquisitions/disposals |
(0.2) |
(4.0) |
0.0 |
(6.3) |
0.0 |
||
Net interest |
(4.1) |
(3.9) |
(3.6) |
(3.6) |
(3.5) |
||
Equity financing |
0.1 |
0.1 |
0.0 |
0.0 |
0.0 |
||
Dividends |
0.0 |
(8.0) |
(7.5) |
(7.1) |
(7.2) |
||
Other |
(27.4) |
(19.6) |
(19.6) |
(19.7) |
(19.8) |
||
Net Cash Flow |
(3.2) |
(11.5) |
(1.0) |
(3.6) |
3.3 |
||
Opening net debt/(cash) |
|
|
(26.0) |
(27.8) |
(16.2) |
(15.2) |
(11.5) |
FX |
0.0 |
0.0 |
0.0 |
0.0 |
0.0 |
||
Other non-cash movements |
5.1 |
(0.1) |
0.0 |
0.0 |
0.0 |
||
Closing net debt/(cash) |
|
|
(27.8) |
(16.2) |
(15.2) |
(11.5) |
(14.8) |
Closing net debt/(cash) including leases |
|
|
83.5 |
86.7 |
85.8 |
87.4 |
82.1 |
Source: Topps Tiles accounts, Edison Investment Research
|
|
Research: Healthcare
Oryzon has announced that it has received two separate grants from the Spanish State Research Agency and the Ministry of Science and Innovation to conduct two different public-private collaboration projects. These two-year studies – the DICTIONIS Project (€0.95m budgeted cost) and the MODERN Project (€1.33m budgeted cost) – aim to discover and validate novel biomarkers and epigenetic targets for the treatment of neuronal pathologies. The grants give us confidence in management’s ongoing efforts and they complement its clinical activities for vafidemstat, its lead CNS asset, which is currently involved in two Phase II clinical trials: PORTICO (for borderline personality disorder) and EVOLUTION (for schizophrenia). Further, the grants have the potential to expand the company’s CNS portfolio, in our view.