RNS Number:5164R
Thorntons PLC
20 February 2007
For Immediate Release 20 February 2007
Thorntons PLC
Announcement of Interim Results
Thorntons Plc ("Thorntons" or "the Company") today announced its results for the
interim period of 28 weeks ended 6 January 2007.
Key Points:
*Revenues broadly similar at #111.2 million (2006: #112.3 million) with an
improving trend in the second quarter which has continued into the second
half of the year
*Investment in own store, commercial and online sales channels progressing
well
*Profit before tax was #10.5 million (2006: #12.8 million)
*Underlying profitability was in line with last year
*Earnings per share of 10.7p (2006: 13.0p)
*The interim dividend is maintained at 1.95p per share
John von Spreckelsen, Thorntons' Chairman, said:
"Thorntons is making steady progress as we continue to implement the Group's
strategy. Whereas profit has declined due to one-off items and increased
investment, the latter has resulted in the modernisation and refits of 178
Thorntons stores, the enhancement of our online sales channel and other trading
opportunities. This, together with other sales and cost initiatives, has
positioned us well to benefit from an improved second half performance, where, I
am pleased to report, own store like for like sales are showing good progress.
We expect the Group's performance in the second half to underpin full year
results in line with expectations.
"Mike Davies joined the Board as Chief Executive in October 2006. Mike's
knowledge and experience will prove invaluable as we continue to implement our
growth strategy."
ENDS
For further information please contact:
Cardew Group T: 020 7930 0777
Sofia Rehman / Nadja Vetter
Chief Executive's Review
Sales for the 28 weeks ended 6 January 2007 were broadly unchanged at #111.2
million (2006: #112.3 million). Although profit before tax decreased by #2.3
million to #10.5 million (2006: #12.8 million), this reflected incremental costs
relating to a significant investment in updating the store portfolio,
strengthening the Thorntons Direct offer, as well as other one-off costs. After
allowing for these incremental costs underlying profitability was in line with
last year. These actions have positioned us well for the second half of the
financial year and we are pleased to maintain the interim dividend of 1.95p.
The Group's strategic focus is on enhancing the Thorntons offer in all our sales
channels to create sustainable growth in sales and profits. This will be
supported by our strong manufacturing base, the quality of our products and our
brand visibility and should in time result in enhanced shareholder returns.
Sales Channels
Sales trends improved significantly from -7.6% in the first quarter to +2.1% in
the second quarter and the positive trend continues in the second half.
Own Stores
Although first quarter like-for-like sales declined by 3.5%, there was a marked
improvement in the second quarter, with a 3.2% like-for-like sales increase in
the final four weeks of the reporting period, which included Christmas trading.
In addition to a renewed focus on product innovation and an enhanced seasonal
gifts offering, the Company embarked upon a significant store refurbishment
programme. This benefited 178 stores with costs of #800,000 being expensed in
the period (2006: #nil).
Franchise
Franchise sales were down in the early part of the year with a fall of 2.6% to
#8.1 million in the half year. However, sales improved in the second quarter and
an additional eight franchisees were introduced in the six weeks leading to
Christmas.
We currently have 214 franchise stores, which are mainly located in smaller
towns across the UK.
Commercial
Commercial sales remained stable at #20.5 million and included the voluntary de-
listing of a High Street customer which has since been regained. This aside,
sales to other accounts grew by 4% with a particularly strong performance in
boxed chocolates where Thorntons is the leading brand in the grocery sector. In
addition to this, the Company gained a number of new customers, the benefits of
which will start to be seen in the second half.
Thorntons Direct
Thorntons Direct, www.thorntons.co.uk, services our consumer and business
customers through our website, duty free and catalogue sales channels. During
the period, a substantial increase in investment in advertising, staff and
systems resulted in a solid sales increase of 19.1% to #4.2 million and should
continue to support sales growth in the future.
Marketing
We remain committed to our focus on product innovation and believe this is key
to Thorntons objective of developing a sales and marketing led business. During
the period two new boxed collections, Organic and Single Origin chocolates were
introduced to reflect the increased consumer focus on health and provenance. In
addition to this, we remain focused on key seasonal ranges and have further
enhanced our Christmas, Valentine's, Mother's Day and Easter offer with new
products and packaging designs. We are also developing improvements for the
flagship Continental range.
Management Changes
During the period, Peter Burdon and Philip Douty stepped down from their
positions of Chief Executive and Trading & Marketing Director. The associated
reorganisation costs have been expensed in the period. The search for a new
Marketing Director has commenced and we will make an appointment as soon as
possible.
Outlook
We are pleased with the steady progress we have achieved following the difficult
start to the year. The investments that we are making in the business produced
an improved sales performance in the second quarter and we remain confident that
our investments together with our new sales and cost initiatives position us
well to deliver overall sales growth in the second half. We therefore expect the
Group's performance to be in line with expectations.
Mike Davies
Chief Executive
20 February 2007
Consolidated income statement
Unaudited results for 28 weeks ended 6 January 2007
+-------------+------------------------------------+--------+--------------+--------------+
|For 52 weeks | | Notes | For 28 weeks |For 28 weeks |
| ended | | | ended | ended |
| 24 June | | | 6 January | 7 January |
| 2006 | | | 2007 | 2006 |
| (audited)| | | (unaudited)| (unaudited) |
| #'000 | | | #'000 | #'000 |
+-------------+------------------------------------+--------+--------------+--------------+
| 176,626 | Revenue | | 111,196 | 112,347 |
+-------------+------------------------------------+--------+--------------+--------------+
| (84,765)| Cost of sales | | (49,935)| (51,429) |
+-------------+------------------------------------+--------+--------------+--------------+
| 91,861 | Gross profit | | 61,261 | 60,918 |
+-------------+------------------------------------+--------+--------------+--------------+
| | Operating expenses before | | | |
| (84,627)| exceptional items | | (50,077)| (47,214) |
+-------------+------------------------------------+--------+--------------+--------------+
| (726)| Exceptional items | 3 | - | - |
+-------------+------------------------------------+--------+--------------+--------------+
| (85,353)| Total operating expenses | | (50,077)| (47,214) |
+-------------+------------------------------------+--------+--------------+--------------+
| 799 | Other operating income | | 397 | 407 |
+-------------+------------------------------------+--------+--------------+--------------+
| 7,307 | Operating profit | 4 | 11,581 | 14,111 |
+-------------+------------------------------------+--------+--------------+--------------+
| 12 | Finance income | | 17 | 8 |
+-------------+------------------------------------+--------+--------------+--------------+
| (2,154)| Finance costs | | (1,125)| (1,362) |
+-------------+------------------------------------+--------+--------------+--------------+
| 5,165 | Profit before taxation | | 10,473 | 12,757 |
+-------------+------------------------------------+--------+--------------+--------------+
| (1,517)| Taxation | 5 | (3,435)| (4,290) |
+-------------+------------------------------------+--------+--------------+--------------+
| | Profit attributable to equity | | | |
| 3,648 | shareholders | | 7,038 | 8,467 |
+-------------+------------------------------------+--------+--------------+--------------+
| | Key ratios | | | |
+-------------+------------------------------------+--------+--------------+--------------+
| 5.6 | Basic earnings per share (pence) | 7 | 10.7 | 13.0 |
+-------------+------------------------------------+--------+--------------+--------------+
| | Fully diluted earnings per share | | | |
| 5.5 | (pence) | 7 | 10.5 | 12.8 |
+-------------+------------------------------------+--------+--------------+--------------+
The Directors have approved an interim dividend of 1.95 pence per share in
respect of the 28 weeks ended 6 January 2007 (1.95 pence per share for the 28
weeks ended 7 January 2006).
Consolidated balance sheet
+-------------+------------------------------------+--------+--------------+--------------+
| As at | | Notes | As at | As at |
| 24 June | | | 6 January | 7 January |
| 2006 | | | 2007 | 2006 |
| (audited)| | | (unaudited)| (unaudited) |
| #'000 | | | #'000 | #'000 |
+-------------+------------------------------------+--------+--------------+--------------+
| | Non-current assets | | | |
+-------------+------------------------------------+--------+--------------+--------------+
| 69,392 | Property, plant and equipment | | 68,551 | 70,591 |
+-------------+------------------------------------+--------+--------------+--------------+
| 6,027 | Intangible assets | | 6,314 | 7,430 |
+-------------+------------------------------------+--------+--------------+--------------+
| 75,419 | | | 74,865 | 78,021 |
+-------------+------------------------------------+--------+--------------+--------------+
| | Current assets | | | |
+-------------+------------------------------------+--------+--------------+--------------+
| 15,317 | Inventories | | 15,290 | 15,544 |
+-------------+------------------------------------+--------+--------------+--------------+
| 11,642 | Trade and other receivables | | 16,084 | 14,984 |
+-------------+------------------------------------+--------+--------------+--------------+
| 932 | Cash and cash equivalents | | 1,274 | 6,453 |
+-------------+------------------------------------+--------+--------------+--------------+
| 27,891 | | | 32,648 | 36,981 |
+-------------+------------------------------------+--------+--------------+--------------+
| | Current liabilities | | | |
+-------------+------------------------------------+--------+--------------+--------------+
| (5,082)| Borrowings | | (9,473)| (14,489) |
+-------------+------------------------------------+--------+--------------+--------------+
| (19,070)| Trade and other payables | | (27,908)| (25,675) |
+-------------+------------------------------------+--------+--------------+--------------+
| - | Derivative financial instruments | | - | (491) |
+-------------+------------------------------------+--------+--------------+--------------+
| (832)| Current tax liabilities | | (2,185)| (1,907) |
+-------------+------------------------------------+--------+--------------+--------------+
| | Provisions for other liabilities | | | |
| (142)| and charges | | (176)| (115) |
+-------------+------------------------------------+--------+--------------+--------------+
| (25,126)| | | (39,742)| (42,677) |
+-------------+------------------------------------+--------+--------------+--------------+
| 2,765 | Net current assets/(liabilities) | | (7,094)| (5,696) |
+-------------+------------------------------------+--------+--------------+--------------+
| | Non-current liabilities | | | |
+-------------+------------------------------------+--------+--------------+--------------+
| (23,421)| Borrowings | | (7,417)| (9,252) |
+-------------+------------------------------------+--------+--------------+--------------+
| (2,284)| Deferred tax liabilities | | (3,556)| (4,976) |
+-------------+------------------------------------+--------+--------------+--------------+
| (17,941)| Retirement benefit obligations | | (17,911)| (18,002) |
+-------------+------------------------------------+--------+--------------+--------------+
| (2,093)| Other non-current liabilities | | (2,050)| (1,400) |
+-------------+------------------------------------+--------+--------------+--------------+
| | Provisions for other liabilities | | | |
| (491)| and charges | | (455)| (507) |
+-------------+------------------------------------+--------+--------------+--------------+
| (46,230)| | | (31,389)| (34,137) |
+-------------+------------------------------------+--------+--------------+--------------+
| 31,954 | Net assets | | 36,382 | 38,188 |
+-------------+------------------------------------+--------+--------------+--------------+
| | Shareholders' equity | | | |
+-------------+------------------------------------+--------+--------------+--------------+
| 6,724 | Ordinary shares | | 6,805 | 6,719 |
+-------------+------------------------------------+--------+--------------+--------------+
| 12,890 | Share premium | | 13,514 | 12,852 |
+-------------+------------------------------------+--------+--------------+--------------+
| - | Hedging reserve | | - | 173 |
+-------------+------------------------------------+--------+--------------+--------------+
| 12,340 | Retained earnings | | 16,063 | 18,444 |
+-------------+------------------------------------+--------+--------------+--------------+
| 31,954 | Total equity | 8 | 36,382 | 38,188 |
+-------------+------------------------------------+--------+--------------+--------------+
Consolidated statement of recognised income and expense
+-------------+---------------------------------------------+--------------+--------------+
|For 52 weeks | | For 28 weeks| For 28 weeks |
| ended | | ended | ended |
| 24 June | | 6 January | 7 January |
| 2006 | | 2007 | 2006 |
| (audited)| | (unaudited)| (unaudited)|
| #'000 | | #'000| #'000 |
+-------------+---------------------------------------------+--------------+--------------+
| | Actuarial gains/(losses) recognised on | | |
| 1,219 | defined benefit pension scheme | (412)| 1,079 |
+-------------+---------------------------------------------+--------------+--------------+
| | Movement of deferred tax on pension | | |
| (366)| liability | 124 | (324)|
+-------------+---------------------------------------------+--------------+--------------+
| | Effective portion of changes in fair | | |
| | value of cash flow hedges (net of tax): | | |
| | - Effective value of changes | | |
| (150)| in fair value | - | (189)|
| (212)| - Recycled to net income | - | -|
+-------------+---------------------------------------------+--------------+--------------+
| | Net gains/(losses) not recognised in | | |
| 491 | the income statement | (288)| 566 |
+-------------+---------------------------------------------+--------------+--------------+
| | Profit attributable to equity | | |
| 3,648 | shareholders | 7,038 | 8,467|
+-------------+---------------------------------------------+--------------+--------------+
| | Total recognised income and expense | | |
| 4,139 | for the period | 6,750 | 9,033 |
+-------------+---------------------------------------------+--------------+--------------+
| 362 | Adoption of IAS32/39 (net of tax) | - | 362 |
+-------------+---------------------------------------------+--------------+--------------+
| | Total recognised income and expense | | |
| 4,501 | attributable to equity shareholders | 6,750 | 9,395 |
+-------------+---------------------------------------------+--------------+--------------+
Consolidated statement of cash flows
+-------------+------------------------------------+--------+--------------+--------------+
|For 52 weeks | | Notes | For 28 weeks |For 28 weeks |
| ended | | | ended | ended |
| 24 June | | | 6 January | 7 January |
| 2006 | | | 2007 | 2006 |
| (audited)| | | (unaudited)| (unaudited) |
| #'000 | | | #'000 | #'000 |
+-------------+------------------------------------+--------+--------------+--------------+
| |Cash flows from operating | | | |
| 17,304 |activities | 9 | 20,845 | 22,400 |
+-------------+------------------------------------+--------+--------------+--------------+
| |Cash flows from investing | | | |
| |activities | | | |
+-------------+------------------------------------+--------+--------------+--------------+
| |Purchase of property, plant, and | | | |
| (5,100)|equipment | | (3,293)| (1,992) |
+-------------+------------------------------------+--------+--------------+--------------+
| |Sale of property, plant and | | | |
| 844 |equipment | | 237 | 631 |
+-------------+------------------------------------+--------+--------------+--------------+
| |Net cash used in investing | | | |
| (4,256)|activities | | (3,056)| (1,361) |
+-------------+------------------------------------+--------+--------------+--------------+
| |Cash flows from financing | | | |
| |activities | | | |
+-------------+------------------------------------+--------+--------------+--------------+
| (2,360)|Net interest paid | | (1,132)| (1,408) |
+-------------+------------------------------------+--------+--------------+--------------+
| |Net proceeds from issue of new | | | |
| 417 |shares | | 705 | 374 |
+-------------+------------------------------------+--------+--------------+--------------+
| (238)|Borrowings repaid | | (12,000)| (8,800) |
+-------------+------------------------------------+--------+--------------+--------------+
| |Capital element of finance lease | | | |
| (4,293)|rental payments | | (2,416)| (2,562) |
+-------------+------------------------------------+--------+--------------+--------------+
| (4,443)|Dividends paid | | (3,211)| (3,162) |
+-------------+------------------------------------+--------+--------------+--------------+
| |Net cash used in financing | | | |
| (10,917)|activities | | (18,054)| (15,558) |
+-------------+------------------------------------+--------+--------------+--------------+
| |Net increase/(decrease) in cash | | | |
| 2,131 |and cash equivalents | | (265)| 5,481 |
+-------------+------------------------------------+--------+--------------+--------------+
| |Cash and cash equivalents at | | | |
| (2,129)|beginning of period | | 2 | (2,129) |
+-------------+------------------------------------+--------+--------------+--------------+
| |Cash and cash equivalents at end | | | |
| 2 |of period | | (263)| 3,352 |
+-------------+------------------------------------+--------+--------------+--------------+
Notes to the interim financial statements
1. Basis of preparation of the interim financial statements
The interim financial statements for the 28 weeks ended 6 January 2007 were
approved by the directors on 20 February 2007. The interim financial statements
have been prepared in accordance with the Listing Rules of the Financial
Services Authority and the accounting policies set out in the Group's Annual
Report for the 52 week period ended 24 June 2006. The interim financial
statements are unaudited and do not constitute statutory accounts within the
meaning of Section 240 of the Companies Act 1985, but have been reviewed by the
auditors. The financial information for the 52 weeks ended 24 June 2006 does not
constitute the Company's statutory accounts for that period but has been
extracted from those accounts which have been filed with the Registrar of
Companies. The auditors have reported on those accounts, their report was
unqualified and did not contain statements under Sections 237(2) or (3) of the
Companies Act 1985.
2. Segmental reporting
The Group's operations consist of the vertically integrated manufacture,
distribution and retail of confectionery products. Given the level of
integration, the Directors consider that there is only one business segment and
therefore disclosures are given in the primary financial statements or related
notes.
Revenue arises from UK operations and therefore no separate reporting for
geographical segments is required.
3. Exceptional items
+----------------+-----------------------------+----------------+----------------+
| For 52 weeks| | For 28 weeks| For 28 weeks|
| ended| | ended| ended|
| 24 June 2006| | 6 January 2007| 7 January 2006|
| #'000| | #'000| #'000|
+----------------+-----------------------------+----------------+----------------+
| |Exceptional items comprise: | | |
+----------------+-----------------------------+----------------+----------------+
| 322|Restructuring costs | -| -|
+----------------+-----------------------------+----------------+----------------+
| |Write-off of redundant assets| | |
| 404|and revision of asset lives | -| -|
+----------------+-----------------------------+----------------+----------------+
| 726|Total exceptional items | -| -|
+----------------+-----------------------------+----------------+----------------+
4. Operating Profit
+----------------+-----------------------------+----------------+----------------+
| For 52 weeks| | For 28 weeks| For 28 weeks|
| ended| | ended| ended|
| 24 June 2006| | 6 January 2007| 7 January 2006|
| #'000| | #'000| #'000|
+----------------+-----------------------------+----------------+----------------+
| |Operating profit is stated | | |
| |after charging/(crediting): | | |
+----------------+-----------------------------+----------------+----------------+
| |Depreciation and amortisation| | |
| 11,413|charges | 5,855| 5,754|
+----------------+-----------------------------+----------------+----------------+
| |Profit on disposal of | | |
| (619)|property, plant and equipment| (219)| (594)|
+----------------+-----------------------------+----------------+----------------+
| |Costs associated with offer | | |
| 224|talks | -| 192|
+----------------+-----------------------------+----------------+----------------+
5. Taxation
The tax charge, including deferred tax, for the 28 weeks ended 6 January 2007 is
based on the estimated effective rate chargeable for the 53 weeks ending 30 June
2007 of 32.8% (2006: 33.6%). The tax charge exceeds the charge based on the
statutory rate of corporation tax of 30.0%, principally due to depreciation on
owned assets not qualifying for capital allowances, and other permanently
disallowable items.
6. Dividends
+-----------------+-----------------------------+-----------------+-----------------+
| For 52 weeks| | For 28 weeks| For 28 weeks|
| ended| | ended| ended|
| 24 June 2006| | 6 January 2007| 7 January 2006|
| #'000| | #'000| #'000|
+-----------------+-----------------------------+-----------------+-----------------+
| |Final dividend paid for the | | |
| |52 weeks ended 24 June 2006 | | |
| |of 4.85p (52 weeks ended 25 | | |
| 3,162|June 2005: 4.85p) | 3,211| 3,162|
+-----------------+-----------------------------+-----------------+-----------------+
| |Interim dividend paid of | | |
| |1.95p for the 52 weeks ended | | |
| 1,281|24 June 2006 | -| -|
+-----------------+-----------------------------+-----------------+-----------------+
| |Amounts recognised as | | |
| |distributions to equity | | |
| 4,443|holders | 3,211| 3,162|
+-----------------+-----------------------------+-----------------+-----------------+
The interim dividend will be paid on 27 April 2007 to shareholders registered on
30 March 2007. The shares will be quoted ex-dividend on 28 March 2007.
7. 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 6 January 2007.
+--------------------------+------------+--------------------------+--------------------------+
| | | For 28 weeks | For 28 weeks |
| For 52 weeks ended | | ended | ended |
| 24 June 2006 | | 6 January 2007 | 7 January 2006 |
+--------+--------+--------+------------+--------+--------+--------+--------+--------+--------+
| Profit| Basic| Fully| | Profit| Basic| Fully| Profit| Basic| Fully|
| #'000|earnings| diluted| | #'000|earnings| diluted| #'000|earnings| diluted|
| | per|earnings| | | per|earnings| | per|earnings|
| | share| per| | | share| per| | share| per|
| | | share| | | | share| | | share|
+--------+--------+--------+------------+--------+--------+--------+--------+--------+--------+
| | | |Profit | | | | | | |
| | | |before | | | | | | |
| | | |exceptional | | | | | | |
| 4,156 | 6.4p | 6.3p |items | 7,038 | 10.7p | 10.5p | 8,467 | 13.0p | 12.8p |
+--------+--------+--------+------------+--------+--------+--------+--------+--------+--------+
| | | |Exceptional | | | | | | |
| | | |items (post | | | | | | |
| (508) | (0.8)p| (0.8)p|tax) | - | - | - | - | - | - |
+--------+--------+--------+------------+--------+--------+--------+--------+--------+--------+
| | | |Profit | | | | | | |
| | | |attributable| | | | | | |
| | | |to equity | | | | | | |
| 3,648 | 5.6p | 5.5p |shareholders| 7,038 | 10.7p | 10.5p | 8,467 | 13.0p | 12.8p |
+--------+--------+--------+------------+--------+--------+--------+--------+--------+--------+
+-----------------------------------------------------------------------------------+
|Weighted average number of shares: |
+---------------+----------------------------------+----------------+---------------+
| For 52 weeks| | For 28 weeks| For 28 weeks|
| ended| | ended| ended|
| 24 June 2006| | 6 January 2007| 7 January 2006|
| Number of | | Number of| Number of|
|Ordinary Shares| | Ordinary Shares|Ordinary Shares|
+---------------+----------------------------------+----------------+---------------+
| |Basic weighted average number of | | |
| 65,440,406|ordinary shares | 66,036,093| 65,180,784|
+---------------+----------------------------------+----------------+---------------+
| 973,853|Dilutive effect from share options| 916,629| 997,462|
+---------------+----------------------------------+----------------+---------------+
| |Fully diluted weighted average | | |
| 66,414,259|number of ordinary shares | 66,952,722| 66,178,246|
+---------------+----------------------------------+----------------+---------------+
8. Reconciliation of movements in total equity
+---------------+----------------------------------+---------------+---------------+
| For 52 weeks| | For 28 weeks| For 28 weeks|
| ended| | ended| ended|
| 24 June 2006| | 6 January 2007| 7 January 2006|
| #'000| | #'000| #'000|
+---------------+----------------------------------+---------------+---------------+
| |Total recognised income and | | |
| |expenses attributable to equity | | |
| 4,501 |shareholders | 6,750| 9,395|
+---------------+----------------------------------+---------------+---------------+
| (4,443)|Dividends | (3,211)| (3,162)|
+---------------+----------------------------------+---------------+---------------+
| 417 |New share capital issued | 705| 374|
+---------------+----------------------------------+---------------+---------------+
| |Share based payment (credit)/ | | |
| (133)|charge (net of tax) | 111| 6|
+---------------+----------------------------------+---------------+---------------+
| |Movement in investment in own | | |
| 37 |shares | 73| -|
+---------------+----------------------------------+---------------+---------------+
| |Net increase in equity | | |
| 379 |shareholders' funds | 4,428| 6,613|
+---------------+----------------------------------+---------------+---------------+
| 31,575 |Opening total equity | 31,954| 31,575|
+---------------+----------------------------------+---------------+---------------+
| 31,954 |Closing total equity | 36,382| 38,188|
+---------------+----------------------------------+---------------+---------------+
9. Reconciliation of operating profit to cash flows from operating activities
+--------------+----------------------------------+----------------+----------------+
| For 52 weeks| | For 28 weeks| For 28 weeks|
| ended| | ended| ended|
| 24 June 2006| | 6 January 2007| 7 January 2006|
| #'000| | #'000| #'000|
+--------------+----------------------------------+----------------+----------------+
| 7,307|Operating profit | 11,581| 14,111|
+--------------+----------------------------------+----------------+----------------+
| |Depreciation and amortisation | | |
| 11,413|charges | 5,855| 5,754|
+--------------+----------------------------------+----------------+----------------+
| |Share based payment (credit)/ | | |
| (80)|charge | 145| 91|
+--------------+----------------------------------+----------------+----------------+
| |Profit on disposal of property, | | |
| (619)|plant and equipment | (219)| (594)|
+--------------+----------------------------------+----------------+----------------+
| |Cash flows from continuing | | |
| 18,021|operations | 17,362| 19,362|
+--------------+----------------------------------+----------------+----------------+
| |Changes in working capital | | |
+--------------+----------------------------------+----------------+----------------+
| 2,470|Change in inventories | 27| 2,243|
+--------------+----------------------------------+----------------+----------------+
| 1,209|Change in receivables | (4,364)| (2,211)|
+--------------+----------------------------------+----------------+----------------+
| (2,866)|Change in payables | 8,984| 4,000|
+--------------+----------------------------------+----------------+----------------+
| 16|Change in provisions | (2)| 5|
+--------------+----------------------------------+----------------+----------------+
| 163|Change in post-employment benefits| (442)| 84|
+--------------+----------------------------------+----------------+----------------+
| 304|Effects of exchange rate changes | -| -|
+--------------+----------------------------------+----------------+----------------+
| |Cash flows from operating | | |
| 19,317|activities before taxation | 21,565| 23,483|
+--------------+----------------------------------+----------------+----------------+
| (2,013)|Corporation taxation | (720)| (1,083)|
+--------------+----------------------------------+----------------+----------------+
| |Cash flows from operating | | |
| 17,304|activities | 20,845| 22,400|
+--------------+----------------------------------+----------------+----------------+
10. Reconciliation of movement in net debt
+---------------+----------------------------------+---------------+---------------+
| For 52 weeks| | For 28 weeks| For 28 weeks|
| ended| | ended| ended|
| 24 June 2006| | 6 January 2007| 7 January 2006|
| #'000| | #'000| #'000|
+---------------+----------------------------------+---------------+---------------+
| |Increase/(decrease) in cash and | | |
| 2,131|cash equivalents | (265)| 5,481|
+---------------+----------------------------------+---------------+---------------+
| 4,531|Cash flows from decrease in debt | 14,416| 11,362|
+---------------+----------------------------------+---------------+---------------+
| |Change in net debt resulting from | | |
| 6,662|cash flows | 14,151| 16,843|
+---------------+----------------------------------+---------------+---------------+
| (5,538)|Inception of new finance leases | (2,196)| (5,538)|
+---------------+----------------------------------+---------------+---------------+
| |Effect of exchange rate | | |
| (304)|fluctuations on net debt | -| (202)|
+---------------+----------------------------------+---------------+---------------+
| 820|Movement in net debt in the period| 11,955| 11,103|
+---------------+----------------------------------+---------------+---------------+
| (28,391)|Net debt at beginning of period | (27,571)| (28,391)|
+---------------+----------------------------------+---------------+---------------+
| (27,571)|Net debt at end of period | (15,616)| (17,288)|
+---------------+----------------------------------+---------------+---------------+
Independent review report to Thorntons PLC
Introduction
We have been instructed by the company to review the financial information for
the 28 weeks ended 6 January 2007 which comprises the consolidated balance sheet
as at 6 January 2007 and the related consolidated statements of income,
recognised income and expense, and cash flows for the 28 weeks then ended, 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 Listing Rules
of the Financial Services Authority require that the accounting policies and
presentation applied to the interim figures should be consistent with those
applied in preparing the preceding annual accounts except where any changes, and
the reasons for them, are disclosed.
This interim report has been prepared in accordance with the basis set out in
Note 1.
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
6 January 2007.
PricewaterhouseCoopers LLP
Chartered Accountants
Leeds
20 February 2007
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 GUUBCPUPMGRB
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