RNS Number:6860Y
Thorntons PLC
21 February 2006
For Immediate Release 21 February 2006
Thorntons PLC
Announcement of Interim Results for
28 weeks ended 7 January 2006
Thorntons PLC, the manufacturer, retailer and distributor of high quality
confectionery and other sweet foods, today reports interim results for the 28
weeks ended 7 January 2006.
Key Points
2006 2005 Change
Turnover #112.3m #119.7m -6.2%
Profit before tax #12.8m #13.3m -4.0%
Pre-tax cash flows from #23.5m #23.3m +0.9%
operating activities
Net debt #17.3m #12.5m Up #4.8m
Gearing 45.8% 33.9% Up 13.1%
Earnings per share 13.0p 13.5p -3.7%
Interim dividend per 1.95p 1.95p Unchanged
share
* Profit before tax down 4.0% to #12.8m on turnover 6.2% lower at #112.3m
* Cash flow from operating activities remains strong
* Own shop sales 6.4% lower at #80m from 369 shops, eight fewer than last
year
* Thorntons Direct sales increased by 3.5% to #3.5m
* Unchanged Interim dividend at 1.95p
* Additional investment in new seasonal ranges for Spring and promotional
programme for the remainder of the financial year strengthened
* Focus on cost base continues
* Christopher Burnett stepped down from the Board and left Thorntons on 2
February 2006 after discussions with Newco were terminated
Commenting, John Jackson, Acting Chairman said: "Despite very tough trading
conditions, the actions taken by management to improve like-for-like sales,
tighten costs and control margin should ensure that the results for the full
year will be in line with our expectations."
For further information, please contact:
Thorntons PLC 020 7466 5000 (Today) 01773 542339
(Thereafter)
John Jackson - Acting Chairman
Peter Burdon - Chief Executive
John Wall - Finance Director
Charles Ryland /Nicola
Cronk - Buchanan
Communications 020 7466 5000
Statement to Shareholders
Total sales of #112.3m in the first six months of the financial year were down
6.2% on last year. Profit before tax declined by 4.0% to #12.8m but, despite
this, pre-tax operating cash flow improved to #23.5m compared with #23.3m last
year.
Sales
Own shop sales declined by 6.4% to #80.0m on an estate of 369 shops, which was
eight fewer than last year. On a like-for-like basis, sales were 4.8% lower,
which was heavily influenced by our previously announced disappointing
performance during the Christmas period. Franchise sales were similarly affected
and were down by 3.3% to #8.3m, with six fewer outlets and like-for-like sales
down 5.3%.
Thorntons branded commercial sales were broadly unchanged at #13.4m. Whilst we
enjoyed an increase in sales to the supermarkets, there was an expected
reduction in sales to high street retailers following the Board's decision to
withdraw from this type of account earlier in the year.
Private label commercial sales were #7.1m compared with #8.8m last year due to
the delisting of some seasonal products.
Thorntons Direct sales showed an encouraging increase of 3.5% to #3.5m.
Profit before Tax
Profit before tax was #12.8m compared with #13.3m last year, although EBITDA
remained strong at #19.9m. The decline in profit arising from the reduction in
sales was offset to some extent by year on year improvements in factory costs
and other overheads. Last year's profit before tax included an exceptional
restructuring charge of #1.2m together with a one-off stock write-down of #1.4m.
Borrowings
Net debt was up #4.8m to #17.3m, which reflected increased working capital
requirements together with the effect on net debt of settling a further tranche
of our US dollar denominated debt. Gearing was 45.8% at the period end.
Dividend
The Board has approved an unchanged interim dividend of 1.95 pence per share.
The interim dividend will be paid on 28th April 2006 to shareholders on the
register at close of business on 31st March 2006.
Corporate activity / Board changes
On 2 February 2006, the Independent Directors of Thorntons announced that
discussions with Christopher Burnett and his funders ("Newco") regarding a
possible offer for the Company had been terminated. In the view of the
Independent Directors and their advisers, Newco's revised indicative offer
proposal of 130 pence per share undervalued the Company.
It was also announced that Christopher Burnett was leaving the Company with
immediate effect and that John Jackson, the senior independent director, is
acting as Chairman until such time as a permanent appointment can be made.
Outlook
Since the New Year, it has been well reported that footfall on the high street
has remained subdued and shoppers have become even more attuned to promotions in
determining their purchasing decisions. This environment has meant that our
sales have continued to disappoint, although own shop sales figures for the
Valentines fortnight suggest that there has been less of a decline in
like-for-like sales than hitherto this year.
This improvement partly reflects the additional investment in a new seasonal
range for Valentines versus last year. Similar incremental investment has also
been made for Mothers Day and Easter. In addition, we have strengthened the
promotional programme for the remainder of the financial year to encourage
'add-on' sales in addition to customers' main purchases.
Similarly, for Thorntons Direct and our commercial channels, we will be creating
promotions and incentives that should increase profitable sales.
Despite very tough trading conditions, the actions taken by management to
improve like-for-like sales, tighten costs and control margin should ensure that
the results for the full year will be in line with our expectations.
John Jackson, Acting Chairman
Peter Burdon, Chief Executive
21 February 2006
Consolidated income statement
Unaudited results for 28 weeks ended 7 January 2006
For 52 weeks Notes For 28 For 28 weeks
ended 25 June weeks ended 8
2005 ended 7 January 2005
(unaudited) January 2006 (unaudited)
#'000 #'000 #'000
187,704 Revenue 112,347 119,746
(91,276) Cost of sales (51,429) (56,934)
96,428 Gross profit 60,918 62,812
(85,141) Operating expenses (47,214) (47,213)
(1,658) Exceptional items 4 - (1,229)
(86,799) Total operating expenses (47,214) (48,442)
816 Other operating income 407 437
10,445 Operating profit 5 14,111 14,807
42 Finance income 8 16
(2,408) Finance costs (1,362) (1,535)
8,079 Profit before taxation 12,757 13,288
(2,529) Taxation 6 (4,290) (4,495)
5,550 Profit attributable to equity 8,467 8,793
shareholders
Key ratios
8.5 Basic earnings per share (pence) 8 13.0 13.5
8.4 Fully diluted earnings per share (pence) 8 12.8 13.3
The Directors have approved an interim dividend of 1.95 pence per share in
respect of the 28 weeks ended 7 January 2006 (1.95 pence per share for the 28
weeks ended 8 January 2005).
Consolidated balance sheet
As at 25 June Notes As at 7 As at 8
2005 January January
(unaudited) 2006 2005
#'000 (unaudited) (unaudited)
#'000 #'000
Non-current assets
72,084 Property, plant and equipment 70,591 73,143
7,460 Intangible assets 7,430 6,667
79,544 78,021 79,810
Current assets
17,787 Inventories 15,544 15,038
12,773 Trade and other receivables 14,984 15,746
874 Cash and cash equivalents 6,453 17,165
31,434 36,981 47,949
Current liabilities
(22,733) Borrowings (14,489) (16,853)
(25,548) Trade and other payables (25,675) (33,480)
- Derivative financial (491) -
instruments
(1,616) Current tax liabilities (1,907) (3,215)
(49,897) (42,562) (53,548)
(18,463) Net current liabilities (5,581) (5,599)
Non-current liabilities
(6,532) Borrowings (9,252) (12,846)
(20,780) Other creditors (19,402) (19,851)
(1,992) Deferred tax liabilities (5,391) (4,297)
(617) Provisions (622) (222)
(29,921) (34,667) (37,216)
31,160 Net assets 37,773 36,995
Shareholders' equity
6,669 Ordinary shares 6,719 6,666
12,528 Share premium 12,852 12,505
- Hedge reserve 173 -
11,963 Retained earnings 18,029 17,824
31,160 Total equity 37,773 36,995
Consolidated statement of recognised income and expense
+-------------+----------------------------------------+---------------+--------------+
| For 52 weeks| | For 28 weeks| For 28 weeks |
|ended 25 June| |ended 7 January| ended 8 |
| 2005| | 2006| January 2005 |
| (unaudited)| | (unaudited)| (unaudited)|
| #'000| | #'000 | #'000 |
| | | | |
+-------------+----------------------------------------+---------------+--------------+
| - |Effective portion of changes in fair | (189) | - |
| |value of cash flow hedges (net of tax) | | |
+-------------+----------------------------------------+---------------+--------------+
| (3,953) |Actuarial gains/(losses) recognised on | 1,079 | (1,959) |
| |defined benefit pension scheme | | |
+-------------+----------------------------------------+---------------+--------------+
| 1,185 |Movement of deferred tax on pension | (324) | 588 |
| |liability | | |
+-------------+----------------------------------------+---------------+--------------+
| (2,768) |Net gains/(losses) not recognised in the| 566 | (1,371) |
| |income statement | | |
+-------------+----------------------------------------+---------------+--------------+
| 5,550 |Profit attributable to equity | 8,467 | 8,793 |
| |shareholders | | |
+-------------+----------------------------------------+---------------+--------------+
| 2,782 |Total recognised income and expenses for| 9,033 | 7,422 |
| |the period | | |
+-------------+----------------------------------------+---------------+--------------+
| - |Adoption of IAS32/39 (net of tax) | 362 | - |
+-------------+----------------------------------------+---------------+--------------+
| 2,782 |Total recognised income and expenses | 9,395 | 7,422 |
| |attributable to equity shareholders | | |
+-------------+----------------------------------------+---------------+--------------+
Consolidated statement of cash flows
Unaudited results for 28 weeks ended 7 January 2006
+---------------+-----------------------------------+-----+---------------+--------------+
| For 52 weeks| |Notes| For 28 weeks| For 28 weeks|
| ended| | | ended| ended|
| 25 June 2005| | | 7 January 2006|8 January 2005|
| (unaudited)| | | (unaudited)| (unaudited)|
| #'000| | | #'000| #'000|
+---------------+-----------------------------------+-----+---------------+--------------+
| 13,216 |Cash flows from operating | 10 | 22,400 | 22,218 |
| |activities | | | |
+---------------+-----------------------------------+-----+---------------+--------------+
| | | | | |
+---------------+-----------------------------------+-----+---------------+--------------+
| |Cash flows from investing | | | |
| |activities | | | |
+---------------+-----------------------------------+-----+---------------+--------------+
| (5,279) |Purchase of property, plant, | | (1,992) | (4,494) |
| |equipment and intangible assets | | | |
+---------------+-----------------------------------+-----+---------------+--------------+
| 462 |Sale of property, plant and | | 631 | 420 |
| |equipment | | | |
+---------------+-----------------------------------+-----+---------------+--------------+
| (4,817) |Net cash used in investing | | (1,361) | (4,074) |
| |activities | | | |
+---------------+-----------------------------------+-----+---------------+--------------+
| | | | | |
+---------------+-----------------------------------+-----+---------------+--------------+
| |Cash flows from financing | | | |
| |activities | | | |
+---------------+-----------------------------------+-----+---------------+--------------+
| (2,420) |Net interest paid | | (1,408) | (1,463) |
+---------------+-----------------------------------+-----+---------------+--------------+
| 51 |Net proceeds from issue of new | | 374 | 25 |
| |shares | | | |
+---------------+-----------------------------------+-----+---------------+--------------+
| (814) |Loans advanced/(repaid) | | (8,800) | 4,300 |
+---------------+-----------------------------------+-----+---------------+--------------+
| (4,516) |Capital element of finance lease | | (2,562) | (2,283) |
| |rental payments | | | |
+---------------+-----------------------------------+-----+---------------+--------------+
| (4,428) |Dividends paid | | (3,162) | (3,157) |
+---------------+-----------------------------------+-----+---------------+--------------+
| (12,127) |Net cash used in financing | | (15,558) | (2,578) |
| |activities | | | |
+---------------+-----------------------------------+-----+---------------+--------------+
| (3,728) |Increase in cash, cash equivalents | | 5,481 | 15,566 |
| |and bank overdrafts | | | |
+---------------+-----------------------------------+-----+---------------+--------------+
+--------------+------------------------------------+-----+---------------+--------------+
| 1,599 |Cash, cash equivalents and bank | | (2,129) | 1,599 |
| |overdrafts at beginning of the | | | |
| |period | | | |
+--------------+------------------------------------+-----+---------------+--------------+
| (2,129) |Cash, cash equivalents and bank | | 3,352 | 17,165 |
| |overdrafts at the end of the | | | |
| |period | | | |
+--------------+------------------------------------+-----+---------------+--------------+
Notes to the interim financial statements
1. Basis of preparation of the interim financial statements
EU law (IAS Regulation EC 1606/2002) requires that the group's annual
consolidated financial statements for the 52 weeks ending 24 June 2006 be
prepared in accordance with International Financial Reporting Standards (IFRS)
adopted for use in the EU (Adopted IFRS).
This financial information has been prepared in accordance with the Listing
Rules of the Financial Services Authority. In preparing this financial
information management has used its best knowledge of the expected standards and
interpretations, facts and circumstances, and accounting policies that will be
applied when the group prepares its first set of financial statements in
accordance with IFRSs as adopted for use in the EU as of 24 June 2006.
As a result, although this financial information is based on management's best
knowledge of expected standards and interpretations, and current facts and
circumstances, this may change. For example, IFRS standards and IFRIC
interpretations are subject to ongoing review and possible amendment or
interpretative guidance and, therefore, are still subject to change. Therefore,
until the company prepares its first set of financial statements in accordance
with IFRSs as adopted for use in the EU, the possibility cannot be excluded that
the accompanying financial information may have to be adjusted.
An explanation of how the transition to IFRS has affected the reported financial
position and financial performance of the group is provided in note 12. This
note includes reconciliations of equity and profit or loss for the comparative
periods reported under UK Generally Accepted Accounting Practices (UK GAAP) to
those reported under IFRS.
The group has chosen not to adopt IAS 34, 'Interim financial statements', in
preparing its 2006 interim financial statements and, therefore, this interim
financial information is not in compliance with IFRS.
The accounting policies have been consistently applied to all the periods
presented with one exception. As permitted by IFRS 1 "First-time Adoption of
IFRS", the group has adopted IAS 32 and IAS 39 "Financial Instruments"
prospectively from 26 June 2005, and comparative figures have not been restated.
The financial information contained in these interim financial statements does
not constitute statutory accounts as defined in section 240 of the Companies Act
1985. The figures for the 52 weeks ended 25 June 2005 have been derived from the
published statutory accounts as amended by the IFRS adjustments as set out in
note 12. A copy of the full accounts for that period, on which the auditors have
issued an unqualified audit report, has been delivered to the Registrar of
Companies.
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 20. The auditors have not issued a review opinion on the restated
financial information for the 28 weeks ended 8 January 2005.
2. Accounting policies
Accounting convention
The consolidated interim financial statements have been prepared under the
historical cost convention except for pension assets and liabilities and share
based payment charges which are measured at fair value, and in accordance with
those parts of the Companies Act 1985 applicable to companies reporting under
IFRS.
Basis of consolidation
The consolidated financial information incorporates the financial statements of
the Company and its subsidiaries drawn up to the end of the financial period.
Inter-company sales and profits are eliminated on consolidation.
Property, plant and equipment
Property, plant and equipment are stated at cost less accumulated depreciation.
Cost comprises the purchase price of property, plant and equipment together with
any incidental costs of acquisition. Specific internal employee costs incurred
in implementing capital projects of the Group are capitalised within property,
plant and equipment in the same category as the project.
Subsequent costs are included in the asset's carrying value or recognised as a
separate asset, as appropriate, only when it is probable that future economic
benefits associated with the item will flow to the Group and the cost of the
item can be measured reliably. All other repairs and maintenance expenditure is
charged to the income statement as incurred.
All property, plant and equipment, other than land and assets in the course of
construction, are depreciated to write off their cost down to residual value
over their remaining useful lives by equal annual instalments, as follows:-
In equal annual instalments:
Freehold premises 50 years
Short leasehold land and Period of the lease
buildings
Retail fixtures and fittings 5 years
Retail equipment 4 to 5 years
Retail store improvements 10 years
Other equipment and vehicles 3 to 7 years
Manufacturing plant and 12 to 15 years
machinery
The assets' residual values and useful lives are reviewed and adjusted if
appropriate, at each balance sheet date. The need for an impairment write-down
is assessed by comparison of the carrying value of the asset against the higher
of its net realisable value or its value in use.
Intangible assets
Acquired computer software licences are capitalised on the basis of the costs
incurred to acquire and bring to use the specific software. These costs are
amortised over their estimated useful lives (three to five years).
Costs associated with developing or maintaining computer software programmes are
recognised as an expense as incurred. Costs that are directly associated with
the production of identifiable and unique software products controlled by the
Group, and that will probably generate economic benefits exceeding costs beyond
one year, are recognised as intangible assets.
Computer software development costs recognised as assets are amortised over
their estimated useful lives (not exceeding five years).
Employee share option schemes
Where share options are granted to employees as part of their remuneration, the
fair value of options granted is recognised as an employee expense in the income
statement with a corresponding increase in equity. The fair value is measured at
the grant date and expensed through the income statement over the period during
which the employees become unconditionally entitled to the options. The amount
recognised in the income statement is adjusted each year for the expected and
actual number of options vesting.
The fair value of the options is measured using a Black Scholes option valuation
model for options with non-market performance conditions and a Monte Carlo model
for options with market performance conditions.
The proceeds received net of any directly attributable transaction costs are
credited to share capital and share premium when the options are exercised.
Own shares held by the ESOP Trust are carried at cost and disclosed within
shareholders' funds.
Investments in subsidiaries
Investments in subsidiaries are stated at cost, provision being made where
appropriate for impairment, assessed by comparing the carrying value to the
higher of net realisable value or its value in use.
Inventories
Inventories are stated at the lower of cost and net realisable value. Cost
includes materials, direct labour and an attributable proportion of
manufacturing overheads, based on normal operating capacity, according to the
stage of production reached. Net realisable value is the estimated value which
would be realised after deducting all costs of completion, marketing and
selling. Provision is made to reduce the cost to net realisable value having
regard to the age and condition of inventory, as well as its anticipated
saleability.
Cash and equivalents
Cash and cash equivalents includes cash in hand, deposits on call with banks,
other short term highly liquid investments with maturities of three months or
less, and bank overdrafts. Bank overdrafts are shown within borrowings in
current liabilities on the balance sheet.
Borrowings
Borrowings are recognised initially at fair value, net of transaction costs.
Subsequent measurement is based on amortised cost, and any difference between
the proceeds (net of transaction of costs) and the redemption value is
recognised in the income statement over the period of the borrowings using the
effective interest rate method.
Borrowings are classified as current liabilities unless the Group has an
unconditional right to defer settlement of the liability for at least 12 months
after the balance sheet date.
Deferred taxation
Deferred tax expected to be payable or recoverable on temporary differences at
the balance sheet date between the tax bases of assets and liabilities and their
carrying amounts for financial reporting purposes is accounted for using the
liability method.
Deferred tax liabilities are recognised in full for all taxable temporary
differences, and deferred tax assets are recognised to the extent that it is
probable that taxable profits will be available against which deductible
temporary differences can be utilised. However, if the deferred tax arises from
the initial recognition of an asset or liability in a transaction other than a
business combination that at the time of the transaction affects neither
accounting nor taxable profit, it is not accounted for.
Deferred taxation is measured based on tax rates and laws enacted or
substantively enacted at the balance sheet date.
Provisions
A provision is recognised in the balance sheet when the Group has a legal or
constructive obligation as a result of a past event, it is probable that an
outflow of economic benefits will be required to settle the obligation and a
reliable estimate can be made of the amount of the obligation. If the effect is
material, provisions are determined by discounting the expected future cash
flows at a pre-tax rate that reflects current market assessments of the time
value of money and, where appropriate, the risks specific to the liability.
Provision is made for the Group's obligations to maintain properties to a
standard as required by various leases. The provision is not discounted.
In respect of leasehold properties, from which the Group no longer trades and
which remain vacant, onerous lease provisions are created to cover rentals and
other property obligations up to the expiry date of the lease. If a property is
sublet externally but at a level below the head rent then the lease is also
classed as onerous, with the total amounts receivable and payable being
provided. The provision is not discounted.
Revenue
Revenue comprises the amounts receivable for goods and services provided outside
the Group in the normal course of business, net of trade discounts and value
added tax.
Retail sales, returns and allowances are reflected at the date of the
transaction with consumers. In addition provisions are made for expected returns
as necessary. For sales promotions purposes, Thorntons PLC operates a variety of
schemes that give rise to goods being sold at a discount to standard retail
price. These include staff discounts and the redemption of promotional vouchers.
Revenue is adjusted to show sales net of all related discounts.
Wholesale sales, including sales to franchise outlets, are recognised when goods
are despatched to customers, the customer has accepted the products, and
collectability of the related receivables is reasonably assured. Provision is
made for expected returns and allowances as necessary.
Pensions
Defined benefit pension scheme
The retirement benefit obligation recognised in the balance sheet represents the
present value of the defined benefit obligation and unfunded liabilities as
reduced by the fair value of defined benefit scheme assets.
The defined benefit obligation is calculated annually by independent actuaries
using the projected united method. The present value of the defined benefit
obligation is determined by discounting the estimated future cash outflows.
Actuarial gains and losses are recognised in full in the period in which they
occur. They are recognised directly in equity and are presented in the statement
of recognised income and expense. Other income and expenses associated with the
defined benefit section are recognised in the income statement.
The contributions made by the employees and the Group are held in a trust fund,
separated from the Group's finances.
Defined contribution pension scheme
The Group also operates a defined contribution pension scheme which requires
contributions to be made to a separately administered fund. Contributions to the
fund are determined as a percentage of employees' earnings and are charged to
the profit and loss account as incurred.
Foreign currencies
Transactions in foreign currencies are translated at the exchange rate ruling at
the date of transaction. Monetary assets and liabilities denominated in foreign
currencies are retranslated at the exchange rates ruling at the balance sheet
date and any exchange differences arising are taken to the consolidated income
statement.
Operating leases
The costs of all operating leases are charged against operating profit on a
straight line basis at existing rental levels. Incentives to sign leases,
including reverse premiums and rent free periods, are treated as deferred income
and are credited to the income statement in equal instalments over the term of
the lease.
Rental income from operating leases is recognised on a straight line basis over
the period of the lease at current rental levels.
Finance leases
Leases are classified as finance leases where the terms of the lease transfer
substantially all the risks and rewards of ownership to the Group. All other
leases are classified as operating leases.
Property, plant and equipment held under finance leases are capitalised in the
balance sheet and depreciated over the shorter of their lease term and their
expected useful lives. The interest element of leasing payments represents a
constant proportion of the capital balance outstanding and is charged to the
consolidated income statement over the period of the lease.
New Store expenditure
Pre-trading expenditure on new stores is charged to the income statement as
incurred.
Derivatives and other financial instruments
Financial instruments are utilised to support and raise finances for the trading
operations of the Group. Where appropriate, the Group enters into currency swap
and interest rate swap agreements, in order to minimise relevant currency and
interest rate exposure to the Group from the transaction. The effect of swaps is
that a fixed dollar interest, dollar-denominated loan is converted to a fixed
sterling interest, sterling-denominated loan. As such the swaps are designated
and qualify as cash flow hedges and are included on the balance sheet at their
fair value.
Any changes in the fair value of the currency and interest rate swaps during the
period in which the cash flow hedge is in effect are reflected as a component of
equity to the extent that that the hedge is effective. The ineffective part of
the hedge is recognised in the consolidated income statement immediately. Gains
or losses relating to the effective portions of currency and interest rate swaps
are recycled to the income statement and included in operating expenses and
finance costs respectively in the period in which the hedged items affects
profit or loss.
When a hedging instrument expires or is sold, terminated or exercised, or no
longer meets the criteria for hedge accounting, any cumulative gain or loss on
the hedging instrument previously recognised in equity is retained in equity and
is recognised when the forecast transaction is ultimately recognised in the
income statement. If the hedged transaction is no longer expected to occur, the
net cumulative gain or loss that was recognised in equity is immediately
transferred to the income statement.
Grants
Grants and other contributions towards the cost of property, plant and equipment
are included in creditors as deferred income and credited to the income
statement over the life of the asset.
Exceptional items
Exceptional items are material items which derive from events or transactions
which individually or, if of a similar type, in aggregate need to be disclosed
by virtue of their size or incidence if the financial statements are to give a
true and fair view.
Dividends
Dividends are recognised as a liability in the period in which they are
approved.
3. Segmental reporting
The Group has one business segment which is food retail and one geographical
segment, which is the United Kingdom. The business segment reporting format
reflects the Group's management and internal reporting structure.
4. Exceptional items
+-----------------+------------------------------+----------------+--------------------+
| For 52 weeks| | For 28 weeks| For 28 weeks|
| ended 25 June| | ended 7 January|ended 8 January 2005|
| 2005| | 2006| |
| | | | #'000|
| #'000| | #'000| |
+-----------------+------------------------------+----------------+--------------------+
| |Exceptional items comprise: | | |
+-----------------+------------------------------+----------------+--------------------+
| 1,266 |Restructuring costs | - | 1,229 |
+-----------------+------------------------------+----------------+--------------------+
| 475 |Write-off of redundant assets | - | - |
+-----------------+------------------------------+----------------+--------------------+
| 360 |Unrecognised VAT liability | - | - |
| |from prior periods | | |
+-----------------+------------------------------+----------------+--------------------+
| (443) |Release of surplus accruals | - | - |
+-----------------+------------------------------+----------------+--------------------+
| 1,658 |Total exceptional items | - | 1,229 |
+-----------------+------------------------------+----------------+--------------------+
5. Operating Profit
+-----------------+------------------------------+----------------+--------------------+
| For 52 weeks| | For 28 weeks| For 28 weeks|
| ended 25 June| | ended 7 January|ended 8 January 2005|
| 2005| | 2006| |
| | | | #'000|
| #'000| | #'000| |
+-----------------+------------------------------+----------------+--------------------+
| |Operating profit is stated | | |
| |after charging/(crediting): | | |
+-----------------+------------------------------+----------------+--------------------+
| 11,714 |Depreciation and amortisation | 5,754 | 5,891 |
| |charges | | |
+-----------------+------------------------------+----------------+--------------------+
| (188) |Profit on disposal of | (594) | (282) |
| |property, plant and equipment | | |
+-----------------+------------------------------+----------------+--------------------+
| 100 |Costs associated with offer | 192 | - |
| |talks | | |
+-----------------+------------------------------+----------------+--------------------+
6. Taxation
The tax charge, including deferred tax, for the 28 weeks ended 7 January 2006 is
based on the estimated effective rate chargeable for the 52 weeks ending 24 June
2006 of 33.6% (2005: 33.3%). The tax charge exceeds the charge based on the
statutory rate of corporation tax of 30.0%, principally due to the
non-deductibility of depreciation charged on capital expenditure in respect of
store infrastructure.
7. Dividends
+-----------------+------------------------------+----------------+--------------------+
| For 52 weeks| | For 28 weeks| For 28 weeks|
| ended 25 June| | ended 7 January|ended 8 January 2005|
| 2005| | 2006| |
| | | | #'000|
| #'000| | #'000| |
+-----------------+------------------------------+----------------+--------------------+
| 3,157 |Final dividend paid for the 52| 3,162 | 3,157 |
| |weeks ended 25 June 2005 of | | |
| |4.85p (52 weeks ended 26 June | | |
| |2004: 4.85p) | | |
+-----------------+------------------------------+----------------+--------------------+
| 1,271 |Interim dividend paid of 1.95p| - | - |
| |for the 52 weeks ended 25 June| | |
| |2005 | | |
+-----------------+------------------------------+----------------+--------------------+
| 4,428 |Amounts recognised as | 3,162 | 3,157 |
| |distributions to equity | | |
| |holders | | |
+-----------------+------------------------------+----------------+--------------------+
| - |Interim dividend for the 52 | 1,310 | 1,271 |
| |weeks ending 24 June 2006 (52 | | |
| |weeks ended 25 June 2005: | | |
| |1.95p) | | |
+-----------------+------------------------------+----------------+--------------------+
The interim dividend will be paid on 28 April 2006 to shareholders registered on
31 March 2006. The shares will be quoted ex-dividend on 29 March 2006.
8. Earnings per share
Basic earnings per share is calculated by dividing the earnings attributable to
ordinary shareholders by the weighted average number of ordinary shares in issue
during the period.
For diluted earnings per share the weighted average number of ordinary shares in
issue is adjusted to assume conversion of all dilutive potential ordinary
shares. These represent share options granted to employees where the exercise
price is less than the average market price of the Company's ordinary shares
during the 28 weeks to 7 January 2006.
For 52 weeks ended For 28 weeks ended For 28 weeks ended
7 January 2006 8 January 2005
25 June 2005
Profit Basic Fully Profit Basic Fully Profit Basic Fully
#'000 earnings diluted #'000 Earnings diluted #'000 earnings diluted
earnings earnings earnings
per per per
share per share per share per
share share share
6,711 10.3p 10.2p Profit before 8,467 13.0p 12.8p 9,653 14.8p 14.6p
exceptional
items
(1,161) (1.8) (1.8)p Exceptional - - - (860) (1.3)p (1.3)p
items (post
tax)
5,550 8.5p 8.4p Profit 8,467 13.0p 12.8p 8,793 13.5p 13.3p
attributable
to equity
shareholders
+------------------------------------------------------------------------------------+
|Weighted average number of shares: |
+---------------+----------------------------------+-----------------+---------------+
| For 52 weeks| | For 28 weeks| For 28 weeks|
| ended| | ended| ended|
| | | 7 January 2006| 8 January 2005|
| 25 June 2005| | | |
| Number of| | Number of| Number of|
| | | | |
|Ordinary Shares| | Ordinary Shares|Ordinary Shares|
+---------------+----------------------------------+-----------------+---------------+
| 65,118,846 |Basic weighted average number of | 65,180,784 | 65,100,566 |
| |ordinary shares | | |
+---------------+----------------------------------+-----------------+---------------+
| 700,115 |Dilutive effect from share options| 997,462 | 1,180,303 |
+---------------+----------------------------------+-----------------+---------------+
| 65,818,961 |Fully diluted weighted average | 66,178,246 | 66,280,869 |
| |number of ordinary shares | | |
+---------------+----------------------------------+-----------------+---------------+
9. Reconciliation of movements in total equity
+---------------+-----------------------------------+------------------+---------------+
| For 52 weeks| |For 28 weeks ended| For 28 weeks|
| ended| | | ended|
| | | 7 January| |
| 25 June 2005| | | 8 January|
| | | 2006| |
| #'000| | | 2005|
| | | #'000| |
| | | | #'000|
+---------------+-----------------------------------+------------------+---------------+
| 2,782 |Total recognised income and | 9,395 | 7,422 |
| |expenses attributable to equity | | |
| |shareholders | | |
+---------------+-----------------------------------+------------------+---------------+
| (4,428) |Dividends | (3,162) | (3,157) |
+---------------+-----------------------------------+------------------+---------------+
| 51 |New share capital issued | 374 | 25 |
+---------------+-----------------------------------+------------------+---------------+
| 155 |Value of employee services (net of | 6 | 105 |
| |tax) | | |
+---------------+-----------------------------------+------------------+---------------+
| (1,440) |Net increase/(decrease) in equity | 6,613 | 4,395 |
| |shareholders' funds | | |
+---------------+-----------------------------------+------------------+---------------+
| 32,600 |Opening total equity | 31,160 | 32,600 |
+---------------+-----------------------------------+------------------+---------------+
| 31,160 |Closing total equity | 37,773 | 36,995 |
+---------------+-----------------------------------+------------------+---------------+
10. Reconciliation of operating profit to cash flows from operating activities
+----------------+---------------------------------+------------------+---------------+
| For 52 weeks| |For 28 weeks ended| For 28 weeks|
| ended 25 June| | 7 January 2006|ended 8 January|
| 2005| | | 2005|
| | | #'000| |
| #'000| | | #'000|
+----------------+---------------------------------+------------------+---------------+
| 10,445 |Operating profit | 14,111 | 14,807 |
+----------------+---------------------------------+------------------+---------------+
| 11,714 |Depreciation and amortisation | 5,754 | 5,891 |
| |charges | | |
+----------------+---------------------------------+------------------+---------------+
| 155 |Share based payment charges | 91 | 117 |
+----------------+---------------------------------+------------------+---------------+
| (188) |Profit on disposal of property, | (594) | (282) |
| |plant and equipment | | |
+----------------+---------------------------------+------------------+---------------+
| 973 |Change in inventories | 2,243 | 3,722 |
+----------------+---------------------------------+------------------+---------------+
| (485) |Change in receivables | (2,211) | (3,365) |
+----------------+---------------------------------+------------------+---------------+
| (7,155) |Change in payables | 4,000 | 2,575 |
+----------------+---------------------------------+------------------+---------------+
| 393 |Change in provisions | 5 | (2) |
+----------------+---------------------------------+------------------+---------------+
| (245) |Change in post-employment | 84 | (183) |
| |benefits | | |
+----------------+---------------------------------+------------------+---------------+
| 15,607 |Cash flows from operating | 23,483 | 23,280 |
| |activities before taxation | | |
+----------------+---------------------------------+------------------+---------------+
| (2,391) |Corporation taxation | (1,083) | (1,062) |
+----------------+---------------------------------+------------------+---------------+
| 13,216 |Cash flows from operating | 22,400 | 22,218 |
| |activities | | |
+----------------+---------------------------------+------------------+---------------+
11. Reconciliation of movement in net debt
+--------------+----------------------------------+---------------+--------------+
| For 52 weeks| | For 28 weeks| For 28 weeks|
| ended| | ended| ended|
| 25 June 2005| | 7 January 2006|8 January 2005|
| | | | |
| #'000| | #'000| #'000|
+--------------+----------------------------------+---------------+--------------+
| (3,728) |Increase in cash and cash | 5,481 | 15,566 |
| |equivalents | | |
+--------------+----------------------------------+---------------+--------------+
| 5,330 |Cash flows from decrease/ | 11,362 | (2,017) |
| |(increase) in debt | | |
+--------------+----------------------------------+---------------+--------------+
| 1,602 |Change in net debt resulting from | 16,843 | 13,549 |
| |cash flows | | |
+--------------+----------------------------------+---------------+--------------+
| (4,779) |Inception of new finance leases | (5,538) | (2,000) |
+--------------+----------------------------------+---------------+--------------+
| (773) |Effect of exchange rate | (202) | 358 |
| |fluctuations on net debt | | |
+--------------+----------------------------------+---------------+--------------+
| (3,950) |Movement in net debt in the period| 11,103 | 11,907 |
+--------------+----------------------------------+---------------+--------------+
| (24,441) |Net debt at beginning of period | (28,391) | (24,441) |
+--------------+----------------------------------+---------------+--------------+
| (28,391) |Net debt at end of period | (17,288) | (12,534) |
+--------------+----------------------------------+---------------+--------------+
12. Explanation of transition to IFRS
Thorntons PLC is required to report its financial statements in accordance with
International Financial Reporting Standards (IFRS) from 26 June 2005. In
general, the group is required to determine its IFRS accounting policies and
apply them retrospectively to determine its opening balance sheet as at 27 June
2004.
IFRS 1 First time adoption of International Financial Reporting Standards sets
out the procedures which the Group must follow when it adopts IFRS for the first
time. The Group is required to establish its IFRS accounting policies for the
period ending 24 June 2006 and in general apply these retrospectively to
determine the IFRS opening balance sheet at its date of transition, 27 June
2004.
This standard provides a number of optional and compulsory exemptions to this
general principle. Set out below are the exemptions the Group has adopted:
1 IFRS 2 Share-based payments. The Group has adopted the exemption to
apply IFRS 2 only to equity instruments granted after 7 November 2002 and that
had not vested as at 1 January 2005.
2 IAS 39 Financial Instruments: Recognition and Measurement and IAS 32
Financial Instruments: Disclosure and Presentation. The Group has taken the
exemption not to restate comparatives for IAS 32 and IAS 39. Consequently, the
comparative information for financial instruments in this document for the 28
weeks ended 8 January 2005 and the 52 weeks ended 25 June 2005 is presented on
the previously existing UK GAAP basis. On 26 June 2005, an adjustment has been
made to reflect the movements from UK GAAP carrying values to IAS 39 values.
3 The carrying value of previously revalued assets has been treated as
deemed cost on transition to IFRS, in accordance with the provisions of IFRS 1.
Accordingly, the Group's revaluation reserve of #186,000 in the IFRS opening
balance sheet has been reclassified into the profit and loss reserve.
The standards giving rise to the most significant changes to the reported profit
before tax of the Group are:
(a) SIC15 "Operating Leases: incentives"
Under UK GAAP operating lease incentives (monetary contributions and rent free
periods) were released to the profit and loss account over the period to the
first rent review. Under SIC 15, lease incentives are required to be recognised
in the income statement over the life of the lease.
As a result, the Group's IFRS opening balance sheet at 27 June 2004 includes
additional deferred income of #1,323,000 and an increase in operating profit for
the 52 weeks ended 25 June 2005 of #133,000.
(b) IFRS 2 "Share based payment"
Under IFRS 2, the charge recognised in the income statement for share options,
long term incentive plans and other share based payments will be based on the
'fair value' of the awards, calculated using an option pricing model. This
differs from UK GAAP, where the charge recognised was based on the 'intrinsic
value' of awards, being the difference between the market value of the shares at
the date of the award and the option exercise price.
In accordance with the transitional provisions of IFRS 2, the Group has applied
the fair value model to all grants of equity instruments after 7 November 2002
that had not vested as at 1 January 2005.
For equity-settled share based payments, the fair value determined at the date
of the grant is expensed through the income statement on a straight line basis
over the vesting period. This is based on the Group's estimate of the number of
shares that are believed will eventually vest. Fair value is measured by the use
of the Black Scholes model for options with internal performance conditions and
the Monte Carlo model for options with external performance conditions. The
decrease in operating profit for the 52 weeks ended 25 June 2005 arising from
the adoption of IFRS2 is #24,000.
(c) IAS 10 "Events after the Balance Sheet Date"
Proposed dividends are no longer accrued for in the period to which they relate.
Dividends will now be recognised only when they are declared and approved at the
Annual General Meeting. Interim dividends are recognised when paid. The
adjustment for the 25 June 2005 year end is to reverse the UK GAAP accrued final
dividend not approved until the AGM in October 2005.
The effect on the IFRS opening balance sheet is to reduce creditors and increase
net assets by the final dividend of #3,157,000. In addition, dividends will no
longer be shown on the face of the income statement but instead as a movement
directly to equity.
(d) IAS 19 "Employee benefits"
Under UK GAAP, the cost to the Group of the defined benefit pension scheme was
charged to the profit and loss account so as to spread the costs of the pension
over the average remaining service lives of the employees. The pension provision
/prepayment in the balance sheet represented the differences between
contributions paid and the cumulative amounts charged to the profit and loss
account. The assets and liabilities of the scheme itself were not recognised on
the Group's balance sheet.
The defined benefit pension net liability of #15,827,000 recognised in the IFRS
opening balance sheet under IAS 19 represents the present value of the defined
benefit liabilities as reduced by the market value of scheme assets. The
decrease in operating profit for the 52 weeks ended 25 June 2005 arising from
the adoption of IAS 19 on the Group's income statement is #165,000. IAS 19
allows several alternative options for the accounting for actuarial gains and
losses. The Group has elected to recognise all actuarial gains and losses in
full in the period in which they occur, outside of the income statement, via the
statement of recognised income and expense. This option has been selected for
consistency with the required UK GAAP treatment under FRS 17 that had previously
been disclosed by way of a note in the Group's financial statements. The
actuarial loss of #3,953,000 in the year ended 25 June 2005 has been recorded in
the statement of recognised income and expenses. The pension deficit under IFRS
at 25 June 2005 is #18,997,000.
(e) IAS 12 "Deferred taxation"
IAS 12 takes a balance sheet approach to deferred tax whereby deferred tax is
recognised in the balance sheet by applying the appropriate tax rate to the
temporary differences arising between the carrying values of assets and
liabilities and their tax base. This contrasts with UK GAAP , which considers
timing differences arising in the income statement.
As a result, the Group's IFRS opening balance sheet includes an additional
deferred tax asset of #4,170,000. The majority of this adjustment relates to the
deferred tax asset recognised on the pension deficit at 27 June 2004.
(f) IAS 14 "Segmental reporting"
The Group has reviewed and amended the segmental reporting presented in the
report and accounts in the light of guidance contained under IFRS.
(g) IAS 2 "Inventories"
IAS2 requires the inclusion of certain elements of income from suppliers and
other similar items in the cost of inventories.
(h) IAS 38 "Intangible Assets"
Under UK GAAP, all capitalised computer software was included within tangible
fixed assets. IAS 38 Intangible Assets requires software that is not an integral
part of an item of computer hardware to be classified within intangible assets.
An adjustment of #5,311,000 has been made to reclassify such computer software
from property, plant and equipment to intangible assets as at 27 June 2004.
The previously reported and restated financial statements are set out below:
IFRS income statement for 28 weeks ended 8 January 2005
+--------------+---------+-------+--------+--------+-------+-----------+------------------+---------+
| #'000 |UK GAAP |SIC15 |IFRS2 |IAS19 |IAS 12 |IAS2 |Reclass-ifications|IFRS |
| | |Leases |Share |Employee|Income |Inventories| | |
| | | |based |Benefits|Taxes | | | |
| | | |payments| | | | | |
+--------------+---------+-------+--------+--------+-------+-----------+------------------+---------+
|Reference | |a |b |d |e |g | | |
| | | | | | | | | |
+--------------+---------+-------+--------+--------+-------+-----------+------------------+---------+
|Revenue |119,746 | - | - | - | - | - | - |119,746 |
+--------------+---------+-------+--------+--------+-------+-----------+------------------+---------+
|Cost of sales |(56,907) | - | - | - | - | (27) | - |(56,934) |
+--------------+---------+-------+--------+--------+-------+-----------+------------------+---------+
|Gross profit | 62,839 | - | - | - | - | (27) | - | 62,812 |
+--------------+---------+-------+--------+--------+-------+-----------+------------------+---------+
|Operating | | | | | | | | |
|expenses |(47,474) | (19) | 50 | (49) | - | - | 279 |(47,213) |
+--------------+---------+-------+--------+--------+-------+-----------+------------------+---------+
|Exceptional | | | | | | | | |
|items | (1,229) | - | - | - | - | - | - | (1,229) |
+--------------+---------+-------+--------+--------+-------+-----------+------------------+---------+
|Total | | | | | | | | |
|administrative| | | | | | | | |
|expenses |(48,703) | (19) | 50 | (49) | - | - | 279 |(48,442) |
+--------------+---------+-------+--------+--------+-------+-----------+------------------+---------+
|Other | | | | | | | | |
|operating | | | | | | | | |
|income | 437 | - | - | - | - | - | - | 437 |
+--------------+---------+-------+--------+--------+-------+-----------+------------------+---------+
|Operating | | | | | | | | |
|profit | 14,573 | (19) | 50 | (49) | - | (27) | 279 | 14,807 |
+--------------+---------+-------+--------+--------+-------+-----------+------------------+---------+
|Other income | 279 | - | - | - | - | - | (279) | - |
+--------------+---------+-------+--------+--------+-------+-----------+------------------+---------+
|Profit before | | | | | | | | |
|interest | 14,852 | (19) | 50 | (49) | - | (27) | - | 14,807 |
+--------------+---------+-------+--------+--------+-------+-----------+------------------+---------+
|Finance income| 16 | - | - | - | - | - | - | 16 |
+--------------+---------+-------+--------+--------+-------+-----------+------------------+---------+
|Finance costs | (1,535) | - | - | - | - | - | - | (1,535) |
+--------------+---------+-------+--------+--------+-------+-----------+------------------+---------+
|Profit before | | | | | | | | |
|taxation | 13,333 | (19) | 50 | (49) | - | (27) | - | 13,288 |
+--------------+---------+-------+--------+--------+-------+-----------+------------------+---------+
|Taxation | (4,507) | 6 | (16) | 14 | - | 8 | - | (4,495) |
+--------------+---------+-------+--------+--------+-------+-----------+------------------+---------+
|Profit | | | | | | | | |
|attributable | | | | | | | | |
|to equity | | | | | | | | |
|shareholders | 8,826 | (13) | 34 | (35) | - | (19) | - | 8,793 |
+--------------+---------+-------+--------+--------+-------+-----------+------------------+---------+
IFRS income statement for 52 weeks ended 25 June 2005
+------------+---------+-------+--------+--------+------+-----------+------------------+---------+
| #'000 |UK GAAP |SIC15 |IFRS2 |IAS19 |IAS 12|IAS2 |Reclass-ifications|IFRS |
| | |Leases |Share |Employee|Income|Inventories| | |
| | | |based |Benefits|Taxes | | | |
| | | |payments| | | | | |
+------------+---------+-------+--------+--------+------+-----------+------------------+---------+
|Reference | |a |b |d |e |g | | |
| | | | | | | | | |
+------------+---------+-------+--------+--------+------+-----------+------------------+---------+
|Revenue |187,704 | - | - | - | - | - | - |187,704 |
+------------+---------+-------+--------+--------+------+-----------+------------------+---------+
|Cost of |(91,257) | - | - | - | - | (19) | - |(91,276) |
|sales | | | | | | | | |
+------------+---------+-------+--------+--------+------+-----------+------------------+---------+
|Gross profit| 96,447 | - | - | - | - | (19) | - | 96,428 |
+------------+---------+-------+--------+--------+------+-----------+------------------+---------+
|Operating | | | | | | | | |
|expenses |(85,273) | 133 | (24) | (165) | - | - | 188 |(85,141) |
+------------+---------+-------+--------+--------+------+-----------+------------------+---------+
|Exceptional | | | | | | | | |
|items | (1,658) | - | - | - | - | - | - | (1,658) |
+------------+---------+-------+--------+--------+------+-----------+------------------+---------+
|Total | | | | | | | | |
|operating | | | | | | | | |
|expenses |(86,931) | 133 | (24) | (165) | - | - | 188 |(86,799) |
+------------+---------+-------+--------+--------+------+-----------+------------------+---------+
|Other | | | | | | | | |
|operating | | | | | | | | |
|income | 816 | - | - | - | - | - | - | 816 |
+------------+---------+-------+--------+--------+------+-----------+------------------+---------+
|Operating | | | | | | | | |
|profit | 10,332 | 133 | (24) | (165) | - | (19) | 188 | 10,445 |
+------------+---------+-------+--------+--------+------+-----------+------------------+---------+
|Other income| 188 | - | - | - | - | - | (188) | - |
+------------+---------+-------+--------+--------+------+-----------+------------------+---------+
|Profit | | | | | | | | |
|before | 10,520 | 133 | (24) | (165) | - | (19) | - | 10,445 |
|interest | | | | | | | | |
+------------+---------+-------+--------+--------+------+-----------+------------------+---------+
|Finance | 42 | - | - | - | - | - | - | 42 |
|income | | | | | | | | |
+------------+---------+-------+--------+--------+------+-----------+------------------+---------+
|Finance | (2,408) | - | - | - | - | - | - | (2,408) |
|costs | | | | | | | | |
+------------+---------+-------+--------+--------+------+-----------+------------------+---------+
|Profit | | | | | | | | |
|before | 8,154 | 133 | (24) | (165) | - | (19) | - | 8,079 |
|taxation | | | | | | | | |
+------------+---------+-------+--------+--------+------+-----------+------------------+---------+
|Taxation | (2,584) | (40) | 38 | 50 | - | 7 | - | (2,529) |
+------------+---------+-------+--------+--------+------+-----------+------------------+---------+
|Profit | | | | | | | | |
|attributable| | | | | | | | |
|to equity | | | | | | | | |
|shareholders| 5,570 | 93 | 14 | (115) | - | (12) | - | 5,550 |
+------------+---------+-------+--------+--------+------+-----------+------------------+---------+
Consolidated balance sheet as at 27 June 2004
+-------------+--------+-------+--------+---------+--------+------+-----------+----------+------------------+--------+
| #'000 | UK GAAP| SIC15| IFRS2| IAS 10| IAS19|IAS 12| IAS2| IAS 38|Reclass-ifications| IFRS|
| | | Leases| Share|Dividends|Employee|Income|Inventories|Intangible| | |
| | | | based| |Benefits| Taxes| | Assets| | |
| | | |payments| | | | | | | |
+-------------+--------+-------+--------+---------+--------+------+-----------+----------+------------------+--------+
|Reference | |a |b |c |d |e | g|h | | |
+-------------+--------+-------+--------+---------+--------+------+-----------+----------+------------------+--------+
|Non-current | | | | | | | | | | |
|assets | | | | | | | | | | |
+-------------+--------+-------+--------+---------+--------+------+-----------+----------+------------------+--------+
|Property, | | | | | | | | | | |
|plant and | | | | | | | | | | |
|equipment |80,329 | - | - | - | - | - | - | (5,311) | - |75,018 |
+-------------+--------+-------+--------+---------+--------+------+-----------+----------+------------------+--------+
|Intangible | | | | | | | | | | |
|assets | - | - | - | - | - | - | - | 5,311 | - | 5,311 |
+-------------+--------+-------+--------+---------+--------+------+-----------+----------+------------------+--------+
| |80,329 | - | - | - | - | - | - | - | - |80,329 |
+-------------+--------+-------+--------+---------+--------+------+-----------+----------+------------------+--------+
|Current | | | | | | | | | | |
|assets | | | | | | | | | | |
+-------------+--------+-------+--------+---------+--------+------+-----------+----------+------------------+--------+
|Inventories |18,912 | - | - | - | - | - | (152) | - | - |18,760 |
+-------------+--------+-------+--------+---------+--------+------+-----------+----------+------------------+--------+
|Trade and | | | | | | | | | | |
|other | | | | | | | | | | |
|receivables |12,818 | - | - | - | (436) | - | - | - | - |12,382 |
+-------------+--------+-------+--------+---------+--------+------+-----------+----------+------------------+--------+
|Cash and cash| | | | | | | | | | |
|equivalents | 1,599 | - | - | - | - | - | - | - | - | 1,599 |
+-------------+--------+-------+--------+---------+--------+------+-----------+----------+------------------+--------+
| |33,329 | - | - | - | (436) | - | (152) | - | - |32,741 |
+-------------+--------+-------+--------+---------+--------+------+-----------+----------+------------------+--------+
|Current | | | | | | | | | | |
|liabilities | | | | | | | | | | |
+-------------+--------+-------+--------+---------+--------+------+-----------+----------+------------------+--------+
|Borrowings |(13,571)| - | - | - | - | - | - | - | 777 |(12,794)|
| | | | | | | | | | | |
+-------------+--------+-------+--------+---------+--------+------+-----------+----------+------------------+--------+
|Trade and | | | | | | | | | | |
|other |(33,954)| (140) | (83) | 3,157 | - | - | - | - | (777) |(31,797)|
|payables | | | | | | | | | | |
+-------------+--------+-------+--------+---------+--------+------+-----------+----------+------------------+--------+
|Corporation | | | | | | | | | | |
|tax | | | | | | | | | | |
|liabilities |(1,373) | - | - | - | - | - | - | - | - |(1,373) |
+-------------+--------+-------+--------+---------+--------+------+-----------+----------+------------------+--------+
| |(48,898)| (140) | (83) | 3,157 | - | - | - | - | - |(45,964)|
| | | | | | | | | | | |
+-------------+--------+-------+--------+---------+--------+------+-----------+----------+------------------+--------+
|Net current | | | | | | | | | | |
|liabilities |(15,569)| (140) | (83) | 3,157 | (436) | - | (152) | - | - |(13,223)|
| | | | | | | | | | | |
+-------------+--------+-------+--------+---------+--------+------+-----------+----------+------------------+--------+
|Non-current | | | | | | | | | | |
|liabilities | | | | | | | | | | |
+-------------+--------+-------+--------+---------+--------+------+-----------+----------+------------------+--------+
|Borrowings |(14,022)| - | - | - | - | - | - | - | 776 |(13,246)|
| | | | | | | | | | | |
+-------------+--------+-------+--------+---------+--------+------+-----------+----------+------------------+--------+
|Other | (546) |(1,183)| 38 | - |(15,287)| - | - | - | (776) |(17,754)|
|payables | | | | | | | | | | |
+-------------+--------+-------+--------+---------+--------+------+-----------+----------+------------------+--------+
|Deferred tax | | | | | | | | | | |
|provision |(8,562) | 397 | 176 | - | 4,717 | (56) | 46 | - | - |(3,282) |
+-------------+--------+-------+--------+---------+--------+------+-----------+----------+------------------+--------+
|Onerous lease| | | | | | | | | | |
|provision | (224) | - | - | - | - | - | - | - | - | (224) |
+-------------+--------+-------+--------+---------+--------+------+-----------+----------+------------------+--------+
|Non-current | | | | | | | | | | |
|liabilities |(23,354)| (786) | 214 | - |(10,570)| (56) | 46 | - | - |(34,506)|
| | | | | | | | | | | |
+-------------+--------+-------+--------+---------+--------+------+-----------+----------+------------------+--------+
|Net assets |41,406 | (926) | 131 | 3,157 |(11,006)| (56) | (106) | - | - |32,600 |
| | | | | | | | | | | |
+-------------+--------+-------+--------+---------+--------+------+-----------+----------+------------------+--------+
| | | | | | | | | | | |
+-------------+--------+-------+--------+---------+--------+------+-----------+----------+------------------+--------+
|Capital and | | | | | | | | | | |
|reserves | | | | | | | | | | |
+-------------+--------+-------+--------+---------+--------+------+-----------+----------+------------------+--------+
|Ordinary | 6,663 | - | - | - | - | - | - | - | - | 6,663 |
|shares | | | | | | | | | | |
+-------------+--------+-------+--------+---------+--------+------+-----------+----------+------------------+--------+
|Share premium|12,483 | - | - | - | - | - | - | - | - |12,483 |
+-------------+--------+-------+--------+---------+--------+------+-----------+----------+------------------+--------+
|Revaluation | | | | | | | | | | |
|reserves | 186 | - | - | - | - | - | - | - | (186) | - |
+-------------+--------+-------+--------+---------+--------+------+-----------+----------+------------------+--------+
|Retained | | | | | | | | | | |
|earnings |24,384 | (926) | 131 | 3,157 |(11,006)| (56) | (106) | - | (2,124) |13,454 |
| | | | | | | | | | | |
+-------------+--------+-------+--------+---------+--------+------+-----------+----------+------------------+--------+
|Investment in| | | | | | | | | | |
|own shares |(2,310) | - | - | - | - | - | - | - | 2,310 | - |
+-------------+--------+-------+--------+---------+--------+------+-----------+----------+------------------+--------+
|Equity | | | | | | | | | | |
|shareholders'| | | | | | | | | | |
|funds |41,406 | (926) | 131 | 3,157 |(11,006)| (56) | (106) | - | - |32,600 |
| | | | | | | | | | | |
+-------------+--------+-------+--------+---------+--------+------+-----------+----------+------------------+--------+
Consolidated balance sheet as at 8 January 2005
+-------------+--------+-------+--------+---------+--------+------+-----------+----------+------------------+--------+
| #'000 | UK GAAP| SIC15| IFRS2| IAS 10| IAS19|IAS 12| IAS2| IAS 38|Reclass-ifications| IFRS|
| | | Leases| Share|Dividends|Employee|Income|Inventories|Intangible| | |
| | | | based| |Benefits| Taxes| | Assets| | |
| | | |payments| | | | | | | |
+-------------+--------+-------+--------+---------+--------+------+-----------+----------+------------------+--------+
|Reference | |a |b |c |d |e |g |h | | |
+-------------+--------+-------+--------+---------+--------+------+-----------+----------+------------------+--------+
|Non-current | | | | | | | | | | |
|assets | | | | | | | | | | |
+-------------+--------+-------+--------+---------+--------+------+-----------+----------+------------------+--------+
|Property, | | | | | | | | | | |
|plant and | | | | | | | | | | |
|equipment |79,810 | - | - | - | - | - | - | (6,667) | - |73,143 |
+-------------+--------+-------+--------+---------+--------+------+-----------+----------+------------------+--------+
|Intangible | | | | | | | | | | |
|assets | - | - | - | - | - | - | - | 6,667 | - | 6,667 |
+-------------+--------+-------+--------+---------+--------+------+-----------+----------+------------------+--------+
| |79,810 | - | - | - | - | - | - | - | - |79,810 |
+-------------+--------+-------+--------+---------+--------+------+-----------+----------+------------------+--------+
|Current | | | | | | | | | | |
|assets | | | | | | | | | | |
+-------------+--------+-------+--------+---------+--------+------+-----------+----------+------------------+--------+
|Inventories |15,217 | - | - | - | - | - | (179) | - | - |15,038 |
+-------------+--------+-------+--------+---------+--------+------+-----------+----------+------------------+--------+
|Trade and | | | | | | | | | | |
|other | | | | | | | | | | |
|receivables |16,412 | - | - | - | (666) | - | - | - | - |15,746 |
+-------------+--------+-------+--------+---------+--------+------+-----------+----------+------------------+--------+
|Cash and cash| | | | | | | | | | |
|equivalents |17,165 | - | - | - | - | - | - | - | - |17,165 |
+-------------+--------+-------+--------+---------+--------+------+-----------+----------+------------------+--------+
| |48,794 | - | - | - | (666) | - | (179) | - | - |47,949 |
+-------------+--------+-------+--------+---------+--------+------+-----------+----------+------------------+--------+
|Current | | | | | | | | | | |
|liabilities | | | | | | | | | | |
+-------------+--------+-------+--------+---------+--------+------+-----------+----------+------------------+--------+
|Borrowings |(17,809)| - | - | - | - | - | - | - | 956 |(16,853)|
| | | | | | | | | | | |
+-------------+--------+-------+--------+---------+--------+------+-----------+----------+------------------+--------+
|Trade and | | | | | | | | | | |
|other |(33,626)| (148) | (50) | 1,300 | - | - | - | - | (956) |(33,480)|
|payables | | | | | | | | | | |
+-------------+--------+-------+--------+---------+--------+------+-----------+----------+------------------+--------+
|Corporation | | | | | | | | | | |
|tax | | | | | | | | | | |
|liabilities |(3,215) | - | - | - | - | - | - | - | - |(3,215) |
+-------------+--------+-------+--------+---------+--------+------+-----------+----------+------------------+--------+
| |(54,650)| (148) | (50) | 1,300 | - | - | - | - | - |(53,548)|
| | | | | | | | | | | |
+-------------+--------+-------+--------+---------+--------+------+-----------+----------+------------------+--------+
|Net current | | | | | | | | | | |
|liabilities |(5,856) | (148) | (50) | 1,300 | (666) | - | (179) | - | - |(5,599) |
+-------------+--------+-------+--------+---------+--------+------+-----------+----------+------------------+--------+
|Non-current | | | | | | | | | | |
|liabilities | | | | | | | | | | |
+-------------+--------+-------+--------+---------+--------+------+-----------+----------+------------------+--------+
|Borrowings |(13,801)| - | - | - | - | - | - | - | 955 |(12,846)|
| | | | | | | | | | | |
+-------------+--------+-------+--------+---------+--------+------+-----------+----------+------------------+--------+
|Other | (669) |(1,195)| 33 | - |(17,065)| - | - | - | (955) |(19,851)|
|payables | | | | | | | | | | |
+-------------+--------+-------+--------+---------+--------+------+-----------+----------+------------------+--------+
|Deferred tax | | | | | | | | | | |
|provision |(10,165)| 403 | 148 | - | 5,319 | (56) | 54 | - | - |(4,297) |
| | | | | | | | | | | |
+-------------+--------+-------+--------+---------+--------+------+-----------+----------+------------------+--------+
|Onerous lease| | | | | | | | | | |
|provision | (222) | - | - | - | - | - | - | - | - | (222) |
+-------------+--------+-------+--------+---------+--------+------+-----------+----------+------------------+--------+
|Non-current | | | | | | | | | | |
|liabilities |(24,857)| (792) | 181 | - |(11,746)| (56) | 54 | - | - |(37,216)|
| | | | | | | | | | | |
+-------------+--------+-------+--------+---------+--------+------+-----------+----------+------------------+--------+
|Net assets |49,097 | (940) | 131 | 1,300 |(12,412)| (56) | (125) | - | - |36,995 |
| | | | | | | | | | | |
+-------------+--------+-------+--------+---------+--------+------+-----------+----------+------------------+--------+
| | | | | | | | | | | |
+-------------+--------+-------+--------+---------+--------+------+-----------+----------+------------------+--------+
|Capital and | | | | | | | | | | |
|reserves | | | | | | | | | | |
+-------------+--------+-------+--------+---------+--------+------+-----------+----------+------------------+--------+
|Ordinary | 6,666 | - | - | - | - | - | - | - | - | 6,666 |
|shares | | | | | | | | | | |
+-------------+--------+-------+--------+---------+--------+------+-----------+----------+------------------+--------+
|Share premium|12,505 | - | - | - | - | - | - | - | - |12,505 |
+-------------+--------+-------+--------+---------+--------+------+-----------+----------+------------------+--------+
|Revaluation | | | | | | | | | | |
|reserves | 186 | - | - | - | - | - | - | - | (186) | - |
+-------------+--------+-------+--------+---------+--------+------+-----------+----------+------------------+--------+
|Profit and | | | | | | | | | | |
|loss account |32,050 | (940) | 131 | 1,300 |(12,412)| (56) | (125) | - | (2,124) |17,824 |
| | | | | | | | | | | |
+-------------+--------+-------+--------+---------+--------+------+-----------+----------+------------------+--------+
|Investment in| | | | | | | | | | |
|own shares |(2,310) | - | - | - | - | - | - | - | 2,310 | - |
+-------------+--------+-------+--------+---------+--------+------+-----------+----------+------------------+--------+
|Equity | | | | | | | | | | |
|shareholders'| | | | | | | | | | |
|funds |49,097 | (940) | 131 | 1,300 |(12,412)| (56) | (125) | - | - |36,995 |
| | | | | | | | | | | |
+-------------+--------+-------+--------+---------+--------+------+-----------+----------+------------------+--------+
Consolidated balance sheet as at 25 June 2005
+-------------+--------+-------+--------+---------+--------+------+-----------+----------+------------------+--------+
| #'000 | UK GAAP| SIC15| IFRS2| IAS 10| IAS19|IAS 12| IAS2| IAS 38|Reclass-ifications| IFRS|
| | | Leases| Share|Dividends|Employee|Income|Inventories|Intangible| | |
| | | | based| |Benefits| Taxes| | Assets| | |
| | | |payments| | | | | | | |
+-------------+--------+-------+--------+---------+--------+------+-----------+----------+------------------+--------+
|Reference | |a |B |c |d |e |g |h | | |
+-------------+--------+-------+--------+---------+--------+------+-----------+----------+------------------+--------+
|Non-current | | | | | | | | | | |
|assets | | | | | | | | | | |
+-------------+--------+-------+--------+---------+--------+------+-----------+----------+------------------+--------+
|Property, | | | | | | | | | | |
|plant and | | | | | | | | | | |
|equipment |79,544 | - | - | - | - | - | - | (7,460) | - |72,084 |
+-------------+--------+-------+--------+---------+--------+------+-----------+----------+------------------+--------+
|Intangible | | | | | | | | | | |
|assets | - | - | - | - | - | - | - | 7,460 | - | 7,460 |
+-------------+--------+-------+--------+---------+--------+------+-----------+----------+------------------+--------+
| |79,544 | - | - | - | - | - | - | - | - |79,544 |
+-------------+--------+-------+--------+---------+--------+------+-----------+----------+------------------+--------+
|Current | | | | | | | | | | |
|assets | | | | | | | | | | |
+-------------+--------+-------+--------+---------+--------+------+-----------+----------+------------------+--------+
|Inventories |17,958 | - | - | - | - | - | (171) | - | - |17,787 |
+-------------+--------+-------+--------+---------+--------+------+-----------+----------+------------------+--------+
|Trade and | | | | | | | | | | |
|other | | | | | | | | | | |
|receivables |13,592 | 25 | - | - | (844) | - | - | - | - |12,773 |
+-------------+--------+-------+--------+---------+--------+------+-----------+----------+------------------+--------+
|Cash and cash| | | | | | | | | | |
|equivalents | 874 | - | - | - | - | - | - | - | - | 874 |
+-------------+--------+-------+--------+---------+--------+------+-----------+----------+------------------+--------+
| |32,424 | 25 | - | - | (844) | - | (171) | - | - |31,434 |
+-------------+--------+-------+--------+---------+--------+------+-----------+----------+------------------+--------+
|Current | | | | | | | | | | |
|liabilities | | | | | | | | | | |
+-------------+--------+-------+--------+---------+--------+------+-----------+----------+------------------+--------+
|Borrowings |(23,513)| - | - | - | - | - | - | - | 780 |(22,733)|
| | | | | | | | | | | |
+-------------+--------+-------+--------+---------+--------+------+-----------+----------+------------------+--------+
|Trade and | | | | | | | | | | |
|other |(27,773)| (124) | (60) | 3,189 | - | - | - | - | (780) |(25,548)|
|payables | | | | | | | | | | |
+-------------+--------+-------+--------+---------+--------+------+-----------+----------+------------------+--------+
|Corporation | | | | | | | | | | |
|tax | | | | | | | | | | |
|liabilities |(1,616) | - | - | - | - | - | - | - | - |(1,616) |
+-------------+--------+-------+--------+---------+--------+------+-----------+----------+------------------+--------+
| |(52,902)| (124) | (60) | 3,189 | - | - | - | - | - |(49,897)|
| | | | | | | | | | | |
+-------------+--------+-------+--------+---------+--------+------+-----------+----------+------------------+--------+
|Net current | | | | | | | | | | |
|liabilities |(20,478)| (99) | (60) | 3,189 | (844) | - | (171) | - | - |(18,463)|
| | | | | | | | | | | |
+-------------+--------+-------+--------+---------+--------+------+-----------+----------+------------------+--------+
|Non-current | | | | | | | | | | |
|liabilities | | | | | | | | | | |
+-------------+--------+-------+--------+---------+--------+------+-----------+----------+------------------+--------+
|Borrowings |(6,532) | - | - | - | - | - | - | - | - |(6,532) |
+-------------+--------+-------+--------+---------+--------+------+-----------+----------+------------------+--------+
|Other | (715) |(1,091)| 23 | - |(18,997)| - | - | - | - |(20,780)|
|payables | | | | | | | | | | |
+-------------+--------+-------+--------+---------+--------+------+-----------+----------+------------------+--------+
|Deferred tax | | | | | | | | | | |
|provision |(8,474) | 357 | 176 | - | 5,952 | (55) | 52 | - | - |(1,992) |
+-------------+--------+-------+--------+---------+--------+------+-----------+----------+------------------+--------+
|Onerous lease| | | | | | | | | | |
|provision | (617) | - | - | - | - | - | - | - | - | (617) |
+-------------+--------+-------+--------+---------+--------+------+-----------+----------+------------------+--------+
|Non-current | | | | | | | | | | |
|liabilities |(16,338)| (734) | 199 | - |(13,045)| (55) | 52 | - | - |(29,921)|
| | | | | | | | | | | |
+-------------+--------+-------+--------+---------+--------+------+-----------+----------+------------------+--------+
|Net assets |42,728 | (833) | 139 | 3,189 |(13,889)| (55) | (119) | - | - |31,160 |
| | | | | | | | | | | |
+-------------+--------+-------+--------+---------+--------+------+-----------+----------+------------------+--------+
| | | | | | | | | | | |
+-------------+--------+-------+--------+---------+--------+------+-----------+----------+------------------+--------+
|Capital and | | | | | | | | | | |
|reserves | | | | | | | | | | |
+-------------+--------+-------+--------+---------+--------+------+-----------+----------+------------------+--------+
|Share capital| 6,669 | - | - | - | - | - | - | - | - | 6,669 |
+-------------+--------+-------+--------+---------+--------+------+-----------+----------+------------------+--------+
|Share premium|12,528 | - | - | - | - | - | - | - | - |12,528 |
+-------------+--------+-------+--------+---------+--------+------+-----------+----------+------------------+--------+
|Revaluation | | | | | | | | | | |
|reserves | 183 | - | - | - | - | - | - | - | (183) | - |
+-------------+--------+-------+--------+---------+--------+------+-----------+----------+------------------+--------+
|Profit and | | | | | | | | | | |
|loss account |23,348 | (833) | 139 | 3,189 |(13,889)| (55) | (119) | - | 183 |11,963 |
| | | | | | | | | | | |
+-------------+--------+-------+--------+---------+--------+------+-----------+----------+------------------+--------+
|Equity | | | | | | | | | | |
|shareholders'| | | | | | | | | | |
|funds |42,728 | (833) | 139 | 3,189 |(13,889)| (55) | (119) | - | - |31,160 |
| | | | | | | | | | | |
+-------------+--------+-------+--------+---------+--------+------+-----------+----------+------------------+--------+
Independent review report to Thorntons PLC
Introduction
We have been instructed by the company to review the financial information for
the 28 weeks ended 7 January 2006 which comprises the consolidated income
statement, consolidated balance sheet, consolidated statement of income and
expense, consolidated statement of cash flows 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.
As disclosed in note 1, the next annual financial statements of the group will
be prepared in accordance with accounting standards adopted by the European
Union. This interim report has been prepared in accordance with the basis set
out in Note 1.
The accounting policies are consistent with those that the directors intend to
use in the next annual financial statements. As explained in note 1, there is,
however, a possibility that the directors may determine that some changes are
necessary when preparing the full annual financial statements for the first time
in accordance with accounting standards adopted by the European Union. The IFRS
standards and IFRIC interpretations that will be applicable and adopted by the
European Union at 24 June 2006 are not known with certainty at the time of
preparing this interim financial information.
Review work performed
We conducted 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 group management and applying
analytical procedures to the financial information and underlying financial data
and, based thereon, assessing whether the disclosed accounting policies have
been applied. 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 and therefore provides a lower level of assurance.
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 28 weeks ended
7 January 2006.
PricewaterhouseCoopers LLP
Chartered Accountants
Leeds
21 February 2006
Notes
(a) The maintenance and integrity of the Thorntons PLC web site is the
responsibility of the directors; the work carried out by the auditors does not
involve consideration of these matters and accordingly, the auditors accept no
responsibility for any changes that may have occurred to the interim report
since it was initially presented on the web site.
(b) Legislation in the United Kingdom governing the preparation and
dissemination of financial information may differ from legislation in other
jurisdictions.
This information is provided by RNS
The company news service from the London Stock Exchange
END
IR PUUWCPUPQGRU
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