RNS Number:5040R
Thorntons PLC
26 September 2000
PART II
THORNTONS PLC
Announcement of Preliminary Results for
52 weeks ended 24 June 2000 (Audited)
Consolidated Profit and Loss Account
for 52 weeks ended 24 June 2000
For 52 weeks For 52 weeks ended
ended 24 June 2000 26 June 1999
Results Reorgan-
before isation Contin-
Continuing reorgani- sations uing
operations sation charges 0perations
2000 charges (Note 1) 1999
#'000 #'000 #'000 #'000
Turnover 153,487 141,267 - 141,267
Cost of sales (72,215) (66,802) (402) (67,204)
------------------------------------------
Gross profit 81,272 74,465 (402) 74,063
------------------------------------------
Other selling &
distribution costs (61,785) (51,869) (233) (52,102)
Net release of onerous
onerous lease
provisions (note 2) 1,428 572 - 572
-------------------------------------------
Selling &
distribution costs (60,357) (51,297) (233) (51,530)
Administrative
expenses (10,510) (9,843) (713) (10,556)
Other operating income 174 332 - 332
-----------------------------------------
Operating profit -
continuing
operations 10,579 13,657 (1,348) 12,309
-----------------------------------------
Exceptional items
Loss on disposal
of Belper
facility (note 1) (1,055) - - -
Release of European
restructure provision-
discontinued (note 1) - - 803 803
----------------------------------------
(1,055) - 803 803
----------------------------------------
Profit on ordinary
activities before
interest 9,524 13,657 (545) 13,112
Interest receivable
& similar income 319 74 - 74
Interest payable &
similar charges
(note 3) (4,331) (2,646) - (2,646)
----------------------------------------
Profit on ordinary
activities before
taxation 5,512 11,085 (545) 10,540
Taxation (note 4) (252) (940) 415 (525)
----------------------------------------
Profit on ordinary 5,260 10,145 (130) 10,015
activities after taxation
Dividends (note 5) (4,490) (4,465) - (4,465)
-----------------------------------------
Retained profit for
the period 770 5,680 (130) 5,550
-----------------------------------------
Basic earnings per
ordinary share (pence) 7.97 15.45 (0.20) 15.25
(note 6)
Fully diluted earnings per
ordinary share (pence) 7.91 15.35 (0.20) 15.15
(note 6)
Dividend per ordinary
share (pence) (note 5) 6.80 6.80 - 6.80
Excluding exceptional
items:
Basic earnings per ordinary
share (pence) (note 6) 9.57 15.45
Fully diluted earnings
per ordinary 9.50 15.35
share (pence) (note 6)
Total recognised gains and losses
There were no material gains and losses incurred during the
period other than amounts included in the Consolidated Profit
and Loss account above.
Historical cost results
There was no material difference between the result disclosed
above and the result on an unmodified historical cost basis.
Group Balance Sheet
As at
As at 26 June
24 June 1999
2000 (Restated)
#'000 #'000
Fixed assets
Tangible assets 104,147 109,157
Investments - purchase of own shares 290 290
Investments in subsidiaries - -
-------------------
104,437 109,447
-------------------
Current assets
Stocks 17,001 11,728
Debtors: amounts falling due after one year - 452
Debtors: amounts falling due within
one year 9,098 9,605
Cash at bank and in hand 2,065 2,941
------------------
28,164 24,726
Creditors: amounts falling due
within one year (36,696) (37,613)
------------------
Net current liabilities (8,532) (12,887)
------------------
Total assets less current liabilities 95,905 96,560
Creditors: amounts falling due
after one year (45,367) (43,818)
Provisions for liabilities and charges (1,441) (4,594)
--------------------
Net assets 49,097 48,148
-------------------
Capital and reserves
Share capital 6,656 6,644
Share premium 12,399 12,232
Revaluation reserves 505 729
Profit and loss account 29,537 28,543
-------------------
Equity shareholders' funds 49,097 48,148
-------------------
Movements in Shareholders' Funds
for 52 weeks ended 24 June 2000
2000 1999
#'000 #'000
Profit after tax attributable to 5,260 10,015
shareholders
Dividends (4,490) (4,465)
------------------
Retained profit attributable to 770 5,550
shareholders
New share capital issued 179 569
-------------------
Net increase in shareholders' funds 949 6,119
Opening shareholders' funds 48,148 42,029
-------------------
Closing shareholders' funds 49,097 48,148
-------------------
Consolidated Cash Flow Statement
for 52 weeks ended 24 June 2000
2000 2000 1999 1999
#'000 #'000 #'000 #'000
Cash flow from operating
activities (note 7) 16,218 29,693
Returns on investments and
servicing of finance (4,330) (3,978)
Taxation (122) (2,872)
Capital expenditure and
financial investment (4,837) (37,066)
Equity dividends paid (4,486) (4,297)
------------------------------
Cash inflow/(outflow) before
use of liquid
resources and financing 2,443 (18,520)
Management of liquid resources (264) 11,596
Financing - issue of shares 179 569
- (decrease)/increase
in debt (3,737) 10,529
-------------------------------
(3,558) 11,098
--------------------------------
(Decrease)/Increase in cash
in the period (1,379) 4,174
--------------------------------
Reconciliation of Net Cash Flow to Movement in Net Debt
for 52 weeks ended 24 June 2000
2000 2000 1999 1999
#'000 #'000 #'000 #'000
(Decrease)/Increase in cash in the
in the period (note 8) (1,379) 4,174
Cash outflow/(inflow) from
decrease/(increase) in debt (note 8) 3,737 (10,529)
Cash outflow/(inflow) from
increase/(decrease) in liquid
resources (note 8) 264 (11,596)
---------------------------
Change in net debt resulting from 2,622 (17,951)
cash flows (note 8)
Inception of new finance leases (4,562) (2,696)
(note 8)
Termination of finance leases (note 8) 157 -
Translation difference (note 8) 239 23
--------------------------
Movement in net debt
in the period (note 8) (1,544) (20,624)
Net debt at beginning of period
(note 8) (50,729) (30,105)
--------------------------
Net debt at end of period (note 8) (52,273) (50,729)
--------------------------
NOTES
1. Exceptional items and reorganisation charges
Belper Reorgani-
sation
disposal charges
2000 1999
#'000 #'000
Exceptional items charged/(credited)
in the period are as follows:
Project 200 redundancy related payments - 659
Project 200 consultancy fees paid to
PricewaterhouseCoopers - 600
Project 200 other redundancy related costs - 89
-----------------
Total reorganisation charges - 1,348
Loss on disposal of Belper facility 1,055 -
European restructure provision released - (803)
------------------
Amounts charged in the period 1,055 545
-----------------
The Belper freehold site, now largely vacated except for
toffee, fudge and hard-boiled production, was sold on 17
April 2000 for gross proceeds of #1,708,000, generating a
total loss on disposal of #1,055,000 after losses against
fixed asset book values of #2,622,000 and costs of
disposal and site clearance of #141,000. We will continue
to lease part of the facility until June 2003 at the
latest, by which time remaining production will have
transferred to Thornton Park.
Project 200 was a comprehensive overhead cost review of
the business, facilitated and co-ordinated by external
consultants, completed in October 1998, which resulted in
consultancy fees of #600,000 and total redundancy related
costs of #748,000.
Further to successful negotiations, completed in the 52
weeks ended 26 June 1999, on liabilities arising from the
exit from Europe in 1996, the balance of the European
provision was released unused in 1999.
2 Net release of onerous lease provisions
Amounts credited to the consolidated profit and loss
account in respect of onerous lease provisions are as
follows:-
2000 1999
#'000 #'000
Onerous lease provisions credited in the
period are:
Provision created for new onerous
lease obligations - (982)
Asset created for new onerous lease sublet
receivables 4 180
----------------
Net provisions created for new onerous
lease obligations 4 (802)
Provision released on exit from onerous
leases 1,424 1,374
----------------
Net onerous lease obligations credited 1,428 572
in the period ----------------
During the period, onerous lease obligations were incurred
on no new properties (1999 : three properties) which gave
rise to a credit of #4,000 (1999 : charge of #802,000) net
of sublet receivables. In addition, #1,424,000 was
released (1999 : #1,374,000) on exiting onerous lease
obligations on seven properties (1999 : eight properties).
3 Interest payable and similar charges
2000 1999
#'000 #'000
Bank loan and overdraft interest on
amounts wholly repayable within one year 1,090 908
Unsecured loan note interest payable at
fixed 7.35% 2,901 2,901
Unsecured loan note interest payable on
additional premium (see below) 35 -
Exchange differences and other interest 35 40
Interest on finance lease repayments 270 257
----------------
Total interest payable and financial 4,331 4,106
charges
Interest capitalised on Thornton Park
development - (1,460)
-----------------
Net interest payable and similar charges 4,331 2,646
----------------
Following the grading of our loan note issue at a level
below initial expectations we have agreed with the
subscribers an additional US dollar 0.25% premium on the
$65 million loan note issue, effective from 9 January
2000 until 31 March 2007, which is outside of our currency
and interest rate swap arrangements. Whilst this element
of US interest will vary with exchange rate fluctuations,
the annual charge based on year-end exchange rates would
amount to approximately #108,000 per annum.
4 Taxation
2000 1999
#'000 #'000
UK corporation tax at 30% (1999 : 30%) 458 763
Overseas taxation 2 5
Reorganisation charges taxation - (415)
Onerous leases taxation 428 172
----------------
Current year taxation 888 525
Adjustments in respect of previous periods (636) -
---------------
Total Taxation 252 525
---------------
The tax charge in 2000 has benefited from accelerated
capital allowances on the fixed asset additions in the
period, together with tax losses utilised against property
disposal profits.
The tax charge in 1999 benefited from accelerated capital
allowances on the significant fixed asset additions in the
period, including those relating to the packing and
warehousing facilities which came into use during the
period, together with the expected tax deduction from
capitalised interest and tax losses utilised against
property disposal profits.
5 Dividends
2000 1999
Dividend Dividend 2000 1999
10p Ordinary Shares: per share per share #'000 #'000
Interim Paid 1.95p 1.95p 1,283 1,263
Final Proposed 4.85p 4.85p 3,207 3,202
Total Dividends 6.80p 6.80p 4,490 4,465
The Trust operating the Long Term Incentive Plan has
waived all but a nominal sum as dividends on the 504,610
(1999 : 504,610) shares in its possession at the year end.
As such no dividend has been accrued for this shareholding
although additional amounts have been provided in
anticipation of the conversion of share options.
If approved, the final dividend will be paid on 30
November 2000 to shareholders on the register at the close
of business on 6 October 2000.
6 Earnings per share
The calculations of earnings per share are based on the
following profits/(losses) after taxation:-
2000
2000 Fully
2000 Basic diluted
Results earnings earnings
#'000 per share per share
Profit before onerous
leases credit 5,315 8.05p 8.00p
Onerous leases credit 1,000 1.52p 1.50p
Profit on ordinary
activities 6,315 9.57p 9.50p
Reorganisation charges - - -
Belper disposal (1,055) (1,60p) (1.59p)
------------------------------------
Total profit after
taxation 5,260 7.97p 7.91p
-----------------------------------
1999
1999 Fully
1999 Basic diluted
Results earnings earnings
#'000 per share per share
Profit before onerous
leases credit 9,745 14.84p 14.74p
Onerous leases credit 400 0.61p 0.61p
Profit on ordinary
activities 10,145 15.45p 15.35p
Reorganisation charges (130) (0.20p) (0.20p)
Belper disposal - - -
------------------------------------
Total profit after
taxation 10,015 15.25p 15.15p
-----------------------------------
Weighted average number of shares:
2000 1999
Number of Number of
Ordinary Shares Ordinary
Shares
Basic weighted average number of 65,988,097 65,653,399
ordinary shares
Dilutive effect from share 480,491 438,203
options*
Fully diluted weighted average 66,468,588 66,091,602
number of ordinary shares
* Average market price of the #1.6220 #2.0719
Group's shares during the period
7 Reconciliation of operating profit to operating cash flows
Results
before
Continuing reorgani Reorgan Contin-
operations sation isation uing
2000 charges charges operat-
1999 1999 ions
1999
#'000 #'000 #'000 #'000
Operating profit/(loss) 10,579 13,657 (1,348) 12,309
Profit on disposal of fixed
assets (598) (376) - (376)
Depreciation charges 12,260 12,328 - 12,328
Amortisation of Long Term
Incentive Plan - 200 - 200
Non-cash movements in
provisions (1,428) (572) - (572)
------------------------------
Operating cash flows before
working capital movements 20,813 25,237 (1,348) 23,889
Cash flows relating to previous
years provisions (1,086) (1,436) - (1,436)
(Increase)/decrease in stocks(5,273) 5,138 - 5,138
Decrease in debtors 374 486 - 486
Increase in creditors 1,390 1,616 - 1,616
-----------------------------
Net cash inflow/(outflow) 16,218 31,041 (1,348) 29,693
from operating activities ------------------------------
8 Analysis of net debt
At Other At
26 June Cash non-cash Exchange 24
1999 flow changes move- June
ment 2000
#'000 #'000 #'000 #'000 #'000
Group: For the 52
weeks ended
24 June 2000
Cash at bank and
in hand 2,941 (1,379) - 239 1,801
-------------------------------------
Debt due within
one year (11,100) 2,750 - - (8,350)
Debt due after
one year (39,574) - - - (39,574)
Finance leases (2,996) 987 (4,405) - (6,414)
--------------------------------------
(53,670) 3,737 (4,405) - (54,338)
--------------------------------------
Cash on deposit - 264 - - 264
--------------------------------------
Total Net Debt (50,729) 2,622 (4,405) 239 (52,273)
--------------------------------------
At Other At
27 June Cash non-cash Exchange 26
1998 flow changes move- June
ment 1999
#'000 #'000 #'000 #'000 #'000
Group : For the 52
weeks ended
26 June 1999
Cash at bank and
in hand 385 2,556 - - 2,941
Overdrafts (1,618) 1,618 - - -
-------------------------------------
(1,233) 4,174 - - 2,941
-------------------------------------
Debt due within
one year - (11,100) - - (11,100)
Debt due after
one year (39,574) - - - (39,574)
Finance leases (871) 571 (2,696) - (2,996)
---------------------------------------
(40,445)(10,529) (2,696) - (53,670)
---------------------------------------
Cash on deposit 11,573 (11,596) - 23 -
---------------------------------------
Total Net Debt (30,105)(17,951) (2,696) 23 (50,729)
----------------------------------------
9. Annual Report 2000
The financial information given above does not constitute
the Group's Financial statements. Financial statements
for the years ended 24 June 2000 and 26 June 1999 have
been reported on without qualification by
PricewaterhouseCoopers, the Company's auditors. Financial
statements for the year ended 26 June 1999 have been
delivered to the Registrar of Companies and the financial
statements for the year ended 24 June 2000 will be
delivered to the Registrar of Companies in due course.
The Annual Report will be posted to shareholders. Copies
for general release will be available from the Company
Secretary, Thorntons plc, Thornton Park, Somercotes,
Alfreton, Derbyshire, DE55 4XJ from 13 October 2000.
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