2nd Dec 2024 10:55
(Alliance News) - Topps Tiles PLC on Monday said its business strategy has the full support of the board, in response to criticism from its largest shareholder over "costly blunders".
The Leicester, England-based tile specialist said it continues to take market share and outperform the wider tile market despite a "difficult trading environment" for the sector.
Piotr Lipko, managing director of Austrian investor MS Galleon, which owns a 30% stake in Topps Tiles, wrote to company chair Paul Forman last week calling for a leadership review and claiming management had made a raft of "strategic missteps".
Lipko also criticised the company for a "complete failure to adapt" to the changing retail landscape and failing to engage with major shareholders.
Topps said its like-for-like revenue has remained flat since 2019, where the wider UK tile market is estimated to be down around 20%.
The company said it has invested in digital operations, with 18% of revenue now coming from online. Topps said it engages with all its larger shareholders and listens closely to their views.
Last week the company reported that it swung to a full-year pretax loss of GBP16.2 million from a profit of GBP 6.8 million year-on-year. The firm cut its final dividend per share by 50% to 1.2 pence from 2.4 pence the previous year. The total dividend per share was down 33% to 2.4 pence from 3.6 pence.
MS Galleon also criticised Topps's acquisition of CTD Tiles as "unequivocally irrational" and "highly detrimental to the interest of the company".
The company ought CTD Tiles's brand, 30 stores and two distribution sites out of administration in August for GBP9.0 million.
Topps affirmed that the acquisition is "strategically compelling" and was completed "after appropriate due dilligence".
Chair Paul Forman said: "We engage with all our larger shareholders on a regular basis and listen closely to their views. Our strategy was reviewed in April and presented to shareholders in May, with further updates given last week. Further expansion of our digital capabilities is at the heart of many of these growth initiatives. Our latest results show that we continue to take market share, consistently outperforming the wider tile market despite very challenging trading conditions. We believe this demonstrates the effectiveness of our strategy, which has the full support of the board."
Shares in Topps Tiles were down 1.3% to 39.50 pence in London on Monday morning.
By Michael Hennessey, Alliance News reporter
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