RNS Number:8662I
Thorntons PLC
22 February 2005
FOR IMMEDIATE RELEASE 22nd February 2005
THORNTONS PLC
ANNOUNCEMENT OF INTERIM RESULTS
FOR 28 WEEKS ENDED 8 JANUARY 2005
(UNAUDITED)
Thorntons PLC, the manufacturer, retailer and distributor of high quality
confectionery and other sweet foods, today reported results for the 28 weeks
ended 8th January 2005.
Highlights
2005 2004 Change
Turnover #119.7m #109.3m +9.5%
Profit before tax #13.3m #12.1m +10.4%
Cash inflow from operating #23.3m #17.2m +35.3%
activities
Earnings per share (basic) 13.56p 12.12p +11.9%
Dividend per share 1.95p 1.95p Unchanged
Net debt (#14.4m) (#20.9m) down 30.9%
Gearing 29.4% 43.8% down 32.8%
* Profit before tax up 10.4% on turnover increased by 9.5%
* Own shop like for like sales up 0.8%
* Commercial sales up #9.8m to #13.4m
* Cash flow remains strong
* Dividend unchanged at 1.95p
Commenting, Christopher Burnett, Executive Chairman said:
"The results represent further good progress despite the difficult Christmas
trading period. Most of the sales growth came from the sale of Thorntons
branded products through other retailers where we have been establishing a
presence in the past two years."
For further information, please contact:
Christopher Burnett - Executive Chairman, Thorntons PLC 01773 540550) 020 7466 5000
Peter Burdon - Chief Executive, Thorntons PLC 01773 540550) on 22 February 2005
John Wall - Finance Director, Thorntons PLC 01773 540550)
Charles Ryland / Tim Anderson / James Strong 020 7466 5000
Buchanan Communications
Chairman's statement
Sales in the first six months of this financial year grew by 9.5% to #119.7m.
Profit before tax increased by 10.4% to #13.3m.
Sales
Sales through our own shops declined by 0.3% to #85.4m, although we had eleven
fewer shops than last year. On a like for like basis, sales for the first half
were up 0.8%. As experienced by many retailers, Christmas trading, our biggest
selling season, began slowly compared with last year, but picked up strongly in
the final few days. Franchise sales were up by 9.3% to #8.6m but there were 20
more outlets than in the first half last year. On a like for like basis sales
were down 4.1%.
The biggest increase in sales in the first half related to growth in the
distribution of Thorntons branded products through other retailers. Sales
increased by #9.8m to #13.4m, an increase of 270%. Private label sales rose by
2.7% to #9.1m.
Profit before Tax
The increase in profit before tax of #1.2m to #13.3m was after an additional
stock write down of #1.4m following a detailed review of closing stock and a
more rigorous application of the Group's write down policy. There was also an
exceptional charge of #1.2m related to redundancy and other costs as part of our
on-going programme to reduce costs.
Cash Flow
The cash flow from operating activities remained strong at #23.3m, an increase
of #6.1m compared with last year. This contributed to a reduction in net debt
of #6.5m and gearing at the period end was 29.4%.
Dividend
The Board has decided to declare an unchanged interim dividend of 1.95 pence per
share. The interim dividend will be paid on 29th April 2005 to shareholders on
the register at close of business on 1st April 2005.
Outlook
The retail environment remains both competitive and challenging and the second
six months performance, as usual, will depend on the sales achieved over Easter,
but, subject to a satisfactory performance during that period, we remain
confident that the results for the full year will meet market expectations.
It is now almost two years since the Group began, as part of the Outward Growth
strategy, to sell Thorntons branded products through other retailers. In that
time sales have grown rapidly and for the full year will be in the region of
#20m.
The Board are continuing to monitor the strategy of Outward Growth, to ensure
that own shop and franchise sales are not being impacted upon and that sales of
Thorntons products through other retailers are not adversely affecting brand and
customer service values going forward.
Christopher Burnett
Executive Chairman
CONSOLIDATED PROFIT AND LOSS ACCOUNT
Unaudited results for 28 weeks ended 8 January 2005
For 52 weeks Notes For 28 weeks For 28 weeks
ended 26 June ended 8 January ended 10 January
2004 2005 2004 (restated,
(restated,audited) (unaudited) unaudited)
#'000 #'000 #'000
178,746 Turnover 119,746 109,344
(85,181) Cost of sales (56,907) (49,642)
93,565 Gross profit 62,839 59,702
(65,622) Selling and distribution costs (36,088) (36,778)
(18,768) Administrative expenses (11,386) (10,385)
(970) Exceptional items 2 (1,229) 264
(19,738) Total administrative expenses (12,615) (10,121)
745 Other operating income 437 430
8,950 Operating profit 14,573 13,233
634 Profit on disposal of properties 279 438
9,584 Profit before interest 14,852 13,671
(2,578) Net interest payable (1,519) (1,592)
7,006 Profit before tax 13,333 12,079
(2,037) Tax 3 (4,507) (4,195)
4,969 Profit for the financial period 8,826 7,884
(4,426) Dividends 4 (1,300) (1,269)
543 Retained profit for the period 7,526 6,615
Key ratios
7.64p Basic earnings per share (pence) 5 13.56p 12.12p
8.82p Basic earnings per share before 5 14.88p 11.86p
exceptional items (pence)
7.38p Fully diluted earnings per share 5 13.32p 11.75p
(pence)
8.52p Fully diluted earnings per share before 5 14.61p 11.49p
exceptional items (pence)
6.80p Dividend per share (pence) 4 1.95p 1.95p
Continuing operations
All amounts above relate solely to continuing operations. In accordance with
FRS3, profit on disposal of properties is now disclosed after Operating Profit
for all financials periods.
Total recognised gains and losses
There were no material gains and losses incurred during the period other than
the profit for the financial period included in the consolidated profit and loss
account above.
Note of group historical cost profits and losses
For 52 weeks For 28 weeks For 28 weeks
ended 26 June 2004 ended 8 January 2005 ended 10 January
2004
(audited) (unaudited) (unaudited)
#'000 #'000 #'000
7,006 Profit before tax 13,333 12,079
280 Realisation of property revaluation gains of - 122
previous periods
9 Difference between the historical cost 2 5
depreciation charge and the actual
depreciation charge for the period calculated
on the revalued amount
7,295 Historical cost profit for the period before tax 13,335 12,206
832 Historical cost profit for the period after 7,528 6,742
tax and dividends
CONSOLIDATED BALANCE SHEET
As at As at As at
26 June 2004 8 January 2005 10 January 2004
(audited) (unaudited) (unaudited)
#'000 #'000 #'000
Fixed assets
80,329 Tangible assets 79,810 80,786
80,329 79,810 80,786
Current assets
18,912 Stocks 15,217 18,135
12,818 Debtors 16,412 14,626
1,599 Cash at bank and in hand 17,165 12,197
33,329 48,794 44,958
Creditors: amounts due within one year
(13,571) Bank loans, overdrafts and finance leases (17,809) (11,640)
(35,327) Other creditors (36,841) (35,763)
(48,898) (54,650) (47,403)
(15,569) Net current liabilities (5,856) (2,445)
64,760 Total assets less current liabilities 73,954 78,341
(14,022) Bank loans and finance leases (13,801) (21,461)
(546) Other creditors (669) (690)
(14,560) Creditors: amounts due after one year (14,470) (22,151)
(8,562) Deferred tax provision (10,165) (8,199)
(224) Onerous lease provision (222) (231)
(8,786) Provisions for liabilities and charges (10,387) (8,430)
41,406 Net assets 49,097 47,760
Capital and reserves
6,663 Share capital 6,666 6,658
12,483 Share premium 12,505 12,424
186 Revaluation reserves 186 347
24,384 Profit and loss account 32,050 30,641
(2,310) Investment in own shares (2,310) (2,310)
41,406 Equity shareholders' funds 49,097 47,760
Key ratios
25,994 Net debt 14,445 20,904
62.8% Gearing 29.4% 43.8%
MOVEMENTS IN EQUITY SHAREHOLDERS' FUNDS
For 28 weeks For 28 weeks
For 52 weeks ended 8 January ended 10 January
ended 26 June 2004 2005 2004
(audited) (unaudited) (unaudited)
#'000 #'000 #'000
4,969 Profit for the financial period 8,826 7,884
(4,426) Dividends (1,300) (1,269)
543 Retained profit for the period 7,526 6,615
90 New share capital issued 25 26
(895) Movement in investment in own shares 140 (549)
(262) Net increase in equity shareholders' funds 7,691 6,092
41,668 Opening equity shareholders' funds 41,406 41,668
41,406 Closing equity shareholders' funds 49,097 47,760
CONSOLIDATED CASH FLOW STATEMENT
Unaudited results for 28 weeks ended 8 January 2005
For 52 weeks For 28 weeks For 28 weeks
ended 26 June Note ended 8 January ended 10 January
2004 2005 2004
(audited) (unaudited) (unaudited)
#'000 #'000 #'000
18,132 Cash inflow from operating activities 6 23,282 17,208
(2,825) Returns on investments and servicing of finance (1,479) (1,537)
(1,627) Taxation (1,063) (803)
(2,492) Capital expenditure and financial investment (4,074) (2,064)
(4,423) Equity dividends paid (3,158) (3,154)
6,765 Cash inflow before use of liquid resources and 13,508 9,650
financing
500 Management of liquid resources - (8,750)
90 Financing - issue of shares 25 26
(9,808) Financing - increase/(decrease) in debt 2,017 (2,028)
(2,453) Increase/(decrease) in cash in the period 15,550 (1,102)
RECONCILIATION OF NET CASH FLOW TO MOVEMENT IN NET DEBT
For 52 weeks For 28 weeks For 28 weeks
ended 26 June 2004 ended 8 January ended 10 January
(audited) 2005 2004
#'000 (unaudited) (unaudited)
#'000 #'000
(2,453) Increase/(decrease) in cash in the period 15,550 (1,102)
9,808 Cash (inflow)/outflow from (increase)/ (2,017) 2,028
decrease in debt
(500) Cash outflow from increase in liquid - 8,750
resources
6,855 Change in net debt resulting from cash 13,533 9,676
flows
(3,985) Inception of new finance leases (2,000) (1,713)
- Exchange movements 16 (3)
2,870 Movement in net debt in the period 11,549 7,960
(28,864) Net debt at beginning of period (25,994) (28,864)
(25,994) Net debt at end of period (14,445) (20,904)
ANALYSIS OF NET DEBT
Group: for the 28 weeks Other non-cash Exchange At 8 January
ended 8 January 2005 At 26 June 2004 Cash flow changed movement 2005
#'000 #'000 #'000 #'000 #'000
Cash at bank and in hand 1,599 15,550 - 16 17,165
Debt due within one year (9,615) (4,300) - - (13,915)
Debt due after one year (7,914) - - - (7,914)
Finance leases (10,064) 2,283 (2,000) - (9,781)
Total net debt (25,994) 13,533 (2,000) 16 (14,445)
NOTES TO THE INTERIM FINANCIAL STATEMENTS
1. Basis of preparation of the interim financial statements
The interim financial statements, which are abridged, comprises the unaudited
results for the 28 weeks ended 8 January 2005 and 10 January 2004 and the
audited results for the 52 weeks ended 26 June 2004. The financial information
for the 52 weeks ended 26 June 2004 has been extracted from the Group's
statutory financial statements for that year. In accordance with FRS3, profit
on disposal of properties is now disclosed after Operating Profit for all
financials periods. The interim financial statements are unaudited and do not
constitute statutory accounts but have been formally reviewed by the auditors
and their report is set out on page 8.
2. Exceptional items
For 52 weeks For 28 weeks For 28 weeks
ended 26 June ended 8 January ended 10 January
2004 2005 2004
#'000 #'000 #'000
Exceptional items comprise:
(945) Reversal of amortisation on lapsed share - (594)
option schemes
934 Unrecognised VAT liability from prior - -
periods
685 Restructuring costs 1,229 -
296 Costs associated with abortive takeover - 330
talks
970 Total exceptional items 1,229 (264)
Reversal of amortisation on lapsed share option scheme
Write-back of amortisation relating to 504,610 shares held by a trust in
connection with the Long Term Incentive Plan. The plan lapsed in November 2003.
There is no cash impact arising from this item.
Unrecognised VAT liability from prior periods
Unrecognised VAT liability arising between 1999 and 2002. There is no cash
impact arising from this item.
Restructuring costs
Restructuring costs comprising redundancy and other costs directly relating to
the restructuring project.
Costs associated with abortive takeover talks
Costs associated with abortive takeover talks relating to consultancy and other
direct costs in connection with a possible offer for the Group.
3. Tax
The tax charge, including deferred tax, for the 28 weeks ended 8 January 2005 is
based on the estimated effective rate for the 52 weeks ending 25 June 2005 of
33.28% (2004: 29.1%).
4. Dividends
The Directors have declared an interim dividend of 1.95 pence per share (2004:
1.95 pence per share), which amounts to approximately #1,300,000 (2004:
#1,269,000). The dividend will be paid on 29 April 2005 to shareholders
registered on 1 April 2005. The shares will be quoted ex-dividend on 30 March
2005.
5. Earnings per share
The calculations of earnings per share are based on the following profit for the
financial period and numbers of shares:
2004 2005 2005 2004
2004 Fully Basic Fully 2004 Fully
2004 Basic diluted 2005 earnings diluted 2004 Basic diluted
Results earnings earnings Results per earnings Results earnings earnings
#'000 per share per share #'000 share per share #'000 per share per share
5,737 8.82p 8.52p Profit before 9,686 14.88p 14.61p 7,710 11.86p 11.49p
exceptional
items
(768) (1.18p) (1.14p) Exceptional (860) (1.32p) (1.29p) 174 0.26p 0.26p
items (post
tax)
4,969 7.64p 7.38p Profit for the 8,826 13.56p 13.32p 7,884 12.12p 11.75p
financial
period
Weighted average number of shares:
2004 2005 2004
Number of Number of Number of
Ordinary Shares Ordinary Shares Ordinary Shares
65,084,717 Basic weighted average number of ordinary shares 65,100,566 65,023,288
2,283,205 Dilutive effect from share options 1,180,303 2,091,912
67,367,922 Fully diluted weighted average number of ordinary 66,280,869 67,115,200
shares
#1.4283 Average market price of the Group's shares during the #1.5849 #1.3569
period
6. Reconciliation of operating profit to operating cash flows
For 52 weeks For 28 weeks For 28 weeks
ended 26 June ended 8 January 2005 ended 10 January
2004 2004
#'000
#'000 #'000
8,950 Operating profit 14,573 13,233
17 (Profit)/loss on disposal of fixed assets (3) 15
11,199 Depreciation charge 5,891 6,071
50 Amortisation charge/(credit) 140 (549)
249 Non-cash movements in provisions (9) -
20,465 Operating cash flows before working capital 20,592 18,770
movements
(35) Cash flows relating to previous years provisions (3) (61)
(5,253) Decrease/(Increase) in stocks 3,695 (4,476)
(65) (Increase) in debtors (3,594) (1,967)
3,020 Increase in creditors 2,592 4,942
18,132 Net cash inflow from operating activities 23,282 17,208
7. Interim Report 2005
The Interim Report 2005 will be sent to all registered shareholders during March
2005. Copies for general release will be available from the Company Secretary,
Thorntons PLC, Thornton Park, Somercotes, Alfreton, Derbyshire, DE55 4XJ.
The Interim Report 2005 will also be available on the company's website
(www.thorntons.co.uk). The maintenance and integrity of the Thorntons website is
the responsibility of the directors and the work carried out by the auditors
does not involve consideration of these matters. Legislation in the UK governing
the preparation and dissemination of financial statements may differ from
legislation in other jurisdictions.
Independent auditors' review report to the members of Thorntons PLC
We have been instructed by the company to review the financial information which
comprises the consolidated profit and loss account, note of group historical
profits and losses, consolidated balance sheet, consolidated cash flow statement
and the related notes. We have read the other information contained in the
interim report and considered whether it contains any apparent misstatements or
material inconsistencies with the financial information.
Directors' responsibilities
The interim report, including the financial information contained therein, is
the responsibility of, and has been approved by, the directors. The directors
are responsible for preparing the interim report in accordance with the Listing
Rules of the Financial Services Authority which require that the accounting
policies and presentation applied to the interim figures should be consistent
with those applied in preparing the preceding annual accounts except where any
changes, and the reasons for them, are disclosed.
Review work performed
We performed our review in accordance with guidance contained in Bulletin 1999/4
issued by the Auditing Practices Board for use in the United Kingdom. A review
consists principally of making enquiries of management and applying analytical
procedures to the financial information and underlying financial data and, based
thereon, assessing whether the accounting policies and presentation have been
consistently applied unless otherwise disclosed. A review excludes audit
procedures such as tests of controls and verification of assets, liabilities and
transactions. It is substantially less in scope than an audit performed in
accordance with United Kingdom Auditing Standards and therefore provides a lower
level of assurance than an audit. Accordingly we do not express an audit opinion
on the financial information. This report, including the conclusion, has been
prepared for and only for the company for the purpose of the Listing Rules of
the Financial Services Authority and for no other purpose. We do not, in
producing this report, accept or assume responsibility for any other purpose or
to any other person to whom this report is shown or into whose hands it may come
save where expressly agreed by our prior consent in writing.
Review conclusion
On the basis of our review we are not aware of any material modifications that
should be made to the financial information as presented for the twenty eight
weeks ended 8 January 2005.
PricewaterhouseCoopers LLP
Chartered Accountants
Leeds
21 February 2005
This information is provided by RNS
The company news service from the London Stock Exchange
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