Topps Tiles PLC (LSE:TPT) has defended its strategy and the level of engagement it has provided for investors after reports that its biggest shareholder was calling for an overhaul of senior management and strategy due to their “complete failure” to adapt to a challenging market.
In the tile retailer’s full-year results last week, it said revenues fell 5.4% compared to a wider market that was estimated to have shrunk 10-15%.
But the boss of Austrian investment company MS Galleon, which owns almost a 30% stake, wrote to the UK chain’s chairman Paul Forman last week to argue that management made a series of “costly blunders”.
Specific criticism in the letter, which was shared with the Sunday Times, included not developing a larger ecommerce operation and calling the acquisition of CTD Tiles “irrational” and “highly detrimental”.
Topps said in its statement today that it has “invested significantly” in expanding its digital operations over the last five years and generated 18% of revenues online.
The acquisition of CTD is “strategically compelling as it is a trade-focused brand which will significantly accelerate the Group's growth in the commercial market”.
Forman provided a quote to say that the company engages with “all our larger shareholders on a regular basis and listen closely to their views”.
He noted that the strategy was reviewed in April and presented to shareholders in May, with further updates in last week’s results announcement.
“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.”