TIDMTHT
RNS Number : 3168S
Thorntons PLC
08 September 2010
Thorntons
Announcement of preliminary results
Thorntons Plc ("Thorntons" or "the Company") today announced its preliminary
results for the 52 weeks ended 26 June 2010.
Key points:
· Revenues remained flat at GBP214.6 million (2009: GBP214.8 million)
· Profit before tax decreased by 2.4% to GBP6.1 million (2009 before
exceptionals: GBP6.3 million)
· Underlying profit before tax improved by 14.2% to GBP7.5 million (2009:
GBP6.6 million)
· Basic earnings per share increased by 20.4% to 6.5p (2009: 5.4p)
· Net debt down GBP0.7 million to GBP26.0 million (2009: GBP26.7 million)
· The Board recommends a final dividend of 4.10p (2009: 4.85p), making the
total dividend for the year 6.05p (2009: 6.05p)
John von Spreckelsen, Thorntons' Executive Chairman, said;
"I am pleased to report that in spite of the difficult trading environment,
sales of Thorntons branded products grew by 4.7% on last year. We have seen
strong sales growth in both the Commercial and Thorntons Direct channels and the
number of franchises increased by 25 during the year.
"As set out in our trading statements, the key challenge for the business
continues to be the Own Stores channel, which experienced a decline in sales,
particularly in the second half of the financial year. Since the year-end,
trading in what is traditionally a quieter period has been in line with our
expectations. We have strengthened our senior Retail management team and we
believe that this, together with extensive product innovation and changes to the
promotional and marketing programmes, should have a positive impact on trading
in the lead up to Christmas.
"At the same time we have also introduced a number of sustainable cost saving
initiatives including savings through capital investment in manufacturing,
procurement activity and headcount reductions.
"Looking ahead we expect market conditions to remain tough. Thorntons has
entered the new financial year as a leaner business, but also with a good
indicative order level from our Commercial customers and various initiatives to
recover Own Store trading; and this puts the Company in a stronger position to
face the challenges ahead."
- Ends -
For further information please contact:
Cardew Group
T: 020 7930 0777
Nadja Vetter / Emma Crawshaw
Executive Chairman's statement
The past year has been a challenging one, while the Sales & Operations unit,
including the Commercial sales channel, has continued to deliver strong results,
Retail, as already indicated in earlier trading statements, with the exception
of Thorntons Direct, failed to meet management expectations.
Overall sales for the year were flat at GBP215.0 million. However, with the
reduction in own label sales being replaced by sales of Thorntons branded
product, the brand continued to gain market share in the UK chocolate market,
and the business remained strongly cash generative. Turnover in the Sales &
Operations unit grew 9.8% to approximately GBP63.0 million (2009: GBP57.0
million), which helped to offset the 3.7% decline in Retail sales. The decline
was a combination of a reduction in the number of customer transactions, in
addition to significant levels of discounting of stocks, particularly during the
latter part of the second half of the year.
Reported pre-tax profit before exceptionals was GBP6.1 million (2009: GBP6.3
million) whilst debt was down GBP0.7 million at GBP26.0 million (2009: GBP26.7
million). Underlying pre-tax profit before exceptionals was GBP7.5 million
(2009: GBP6.6 million).
We have not been immune to the slowdown in economic activity and progress has
been slowed by such an environment. However, we still continue to pursue our
strategy and remain focused on providing sustainable growth in earnings per
share supported by a strong balance sheet. Our strategy remains to:
- Improve retail performance across all three channels (Own Stores,
Franchise and Thorntons Direct)
- Continue developing innovative new products
- Further expand Commercial sales
- Improve productivity in Operations
- Continue selective development of export sales
The trading issues in the Own Store estate are a key focus area for the Board
and are being addressed. We have strengthened the Retail management team and
have also begun implementing a number of new initiatives to drive sales, both of
which we believe will have a positive impact on trading in the lead up to
Christmas. These initiatives include our continued focus on developing
innovative new products, changes to promotions and local marketing and improving
store standards.
During the year we incurred GBP0.6 million in restructuring and redundancy
costs, with annualised benefits of GBP1 million, and I am confident that, as we
slowly emerge from these difficult economic times, we will return to growth as a
leaner, stronger business. We also continued to innovate our product range and
to invest in refreshing our stores and in factory automation over the period.
The Board has recommended a final dividend of 4.10p per share, making the total
dividend for year - 6.05p the same as last year, which, subject to shareholder
approval, will be paid on 26 November 2010.
Outlook
As set out in our trading statements, over the last year Thorntons has been
successful in product innovation, growing Commercial sales and expanding
Thorntons Direct. Further, manufacturing productivity has improved.
The key challenge for the business continues to be trading in the Own Stores
channel, which experienced a decline in sales, particularly in the second half
of the financial year. Since the year-end, trading in what is traditionally a
quieter period has been in line with our expectations. We have strengthened our
senior Retail management team and we believe that this, together with extensive
product innovation and changes to the promotional and marketing programmes,
should have a positive impact on trading in the lead up to Christmas.
At the same time we have also introduced a number of sustainable cost saving
initiatives into the business including savings through capital investment in
manufacturing, procurement activity and headcount reductions.
Looking ahead we expect market conditions to remain tough. Thorntons has entered
the new financial year as a leaner business, but also with a good indicative
order level from our Commercial customers and various initiatives to recover Own
Store trading; and this puts the Company in a stronger position to face the
challenges ahead.
Management & Employees
Once again, our achievements over the last year would not have been possible
without the hard work and commitment of our dedicated workforce. I would like to
say a big personal thank you to all of them.
Earlier this year Mike Davies, our Chief Executive, informed me of his decision
to retire from Thorntons and he will be leaving the Company on 30 September
2010. On behalf of the Board I would like to thank Mike for his valuable
contribution to the business over the past four years and for his commitment to
ensuring an orderly transition prior to his departure. Mike has led Thorntons'
restructuring, significantly improving the manufacturing operations, the product
offering and performance of the Commercial channel.
The selection process for a new Chief Executive is well advanced. In the
interim, Mark Robson, Finance Director, will be acting Chief Executive, with
myself remaining as Executive Chairman.
John von Spreckelsen
Executive Chairman
7 September 2010
Chief Executive's report
The focus for 2009 was on guiding the business through the recession without
losing sight of the long term strategy. Although Retail, with the exception of
Thorntons Direct, underperformed, growth in the Sales & Operations channel was
particularly strong. Overall sales remained flat at GBP215.0 million during the
year. This figure includes 4.7% growth in Thorntons' branded products to
GBP212.0 million, and a planned reduction in private label sales. The Thorntons
brand continued to gain market share in the UK chocolate market over the period
and now has circa 7% of the market. Reported pre-tax profit before exceptionals
was GBP6.1 million (2009: GBP6.3 million) whilst debt was down GBP0.7 million at
GBP26.0 million (2009: GBP26.7 million).
We continued to face challenging market conditions over the period, and in
response to this, managed our costs prudently. The decision to restructure the
cost base in Operations, the Call Centre and Head Office, had a positive impact
and the Board expects to see the full benefit of these actions coming through in
the next 18 months. Investment in Retail continued with 15 stores refurbished
during the year. Additionally, in manufacturing, nearly GBP1.6 million was
invested in a new moulding line, which will increase productivity in the factory
and, even more importantly, improve the quality and appearance of our products.
Product innovation
Innovation continues to be a key element of the Company's strategy and over the
period within Retail, two new product lines were launched - Metropolitan, a more
modern gift box of ganaches, pralines and meltaways; and Melts, a single variant
chocolate with a praline centre. In addition, the Paris and Milan lines were
extended to the Continental range. Our Christmas, Valentines, Mothering Sunday
and Easter ranges were all refreshed and our seasonal exclusives sold
particularly well.
Moments continued to perform strongly during 2010 and the coming few weeks will
see the addition of a new strawberry flavoured chocolate. Similarly, in January,
a caramel variant will be added to the Melts range.
We added coffee, which became the new number one best seller, and our award
winning pistachio flavour, to our Chocolate Block range and, more recently,
added a new white chocolate block with coconut and lime. A Haiti charity
chocolate block will be introduced in early 2011.
Our newly refreshed Classics range arrived in stores in July and the newly
refreshed Continental range will be available in October. As part of this
refresh, a new Milk box and a Limited Edition box are also being introduced.
In August, we launched a new range of indulgent bars and a new impulse range,
which contain Mini Blocks and Little Treat packs. Our refreshed sharing range
has also very recently hit the shelves.
Ahead of Christmas, packaging of our all time favourite products has been
refreshed and new seasonal lines have been added in order to keep broadening the
Company's appeal to new customers. Additionally, Thorntons Direct will see a
refresh of all its hampers.
Going forward in Commercial, a refreshed Classic Collection is being launched,
which includes two new flavours. Additionally, the range of hanging bags,
delicious chocolate smothered confectionery, has been refreshed and later in the
year, a new 'Love Milk' box, a selection of our favourite milk chocolates, which
is aimed at the younger market, is being launched. A number of seasonal
specialities are also being added for next Christmas and Easter.
Later this year, a new biscuit and chilled dessert range is being launched. The
biscuits will be sold in both the Retail and Commercial channels, whilst the
chilled desserts will be sold through the Commercial channel only.
Retail
Overall Retail sales, including Own Stores, Franchise and Thorntons Direct,
declined 3.7% to GBP152.0 million (2009: GBP157.8 million).
Own Stores
Sales in Own Stores fell 3.6% to GBP129.8 million over the period (2009:
GBP134.5 million). The larger part of this decline was experienced in the second
half with sales decreasing 5.3% against the comparative period last year. Like
for like sales declined by 3.5% for the whole year. The decline was a
combination of a reduction in the number of customer transactions, in addition
to significant levels of discounting of stocks, particularly during the latter
part of the second half of the year.
During the course of the year our Own Store estate remained relatively stable
with four closures and one new opening and one resite, ending the year with 377
stores (2009: 379).
Franchise
Franchise sales for the period declined 14.7% to GBP13.0 million (2009: GBP15.3
million), as they continued to be affected by the collapse of Birthdays Ltd.
Birthdays Ltd went into administration in May 2009, during which time we lost 94
Franchise stores. However, over the year we continued to rebuild the estate and
it is now at 222 stores, only 32 short of the number of Franchisees in April
2009.
As a special mention, I would like to thank the Franchise team for their
continued hard work in opening so many stores in one year, and our independent
Franchisees, many of whom have opened stores in addition to the ones they
already operate.
Thorntons Direct
Overall Thorntons Direct sales grew by an impressive 15.1% to GBP9.2 million
(2009: GBP8.0 million) during the period and showed an improving trend with
growth of 22.1% in H2 after 11.5% in H1. Corporate sales are back to levels seen
prior to the recession as a result of our sales efforts in the leisure and
hospitality sectors. Sales from the website grew by 12%. Improvements to the
functionality of the website, increased marketing activity and further
developments in personalisation, in particular the "design your own box" with a
personal photo printed on the lid, all contributed to this strong growth.
Sales & Operations
Commercial sales
Commercial sales, once again, delivered good growth of 9.8% to GBP62.6 million
(2009: GBP57.0 million). Sales of Thorntons' branded product (which excludes
private label sales) grew by 34.3%. This increase was driven by the boxed
chocolate ranges, which grew by more than 48% over the period. These ranges were
developed exclusively for each of our major customers. Thorntons' Moments also
continued to build on the success of last year, with sales growing over 89% in
its second year of trading and Scrumptious and Melts, two new products, were
launched during the year.
Thorntons now has more than 30% (2009: 25%) of the inlaid box chocolate market
in the UK (A.C. Nielsen, July 2010 excluding sales in Thorntons Retail).
Manufacturing operations
Raw material prices have dramatically increased during the year with cocoa
prices rising 25% and reaching levels not seen for well over 30 years. This has
been the subject of wide coverage in the press recently. Butter has increased
even more, by more than 66% since July 2009. Management has continued to seek to
mitigate these price increases through a mixture of hedging via forward cover
purchasing and product and ingredient re-engineering.
As a result of value engineering activities, benefits coming through from the
investment in the robotic packing line and packaging price improvements,
productivity in operations improved significantly over the period. Further
improvements are expected when the new moulding line is fully commissioned in
the next few weeks.
Distribution costs also declined during the year as we benefited from the
decision to outsource distribution in the South East of England at the beginning
of the financial year.
Service levels to Own Stores and Commercial customers continued to improve and
consistently exceeded 96% during the year (2009: 96%).
Export sales
In September last year we announced our intention to dedicate more resources to
exploring the export opportunity. Good progress has been made in building routes
to new markets, particularly in Central Europe, Duty Free, and in further
developing the business in the Republic of Ireland. Whilst still small, these
opportunities are providing us with the necessary commercial experience to
accelerate growth in the future. For the period under review, Export Sales
achieved GBP2.7 million (2009: GBP2.0 million).
Mike Davies
Chief Executive
7 September 2010
Finance Director's report
The Board uses five Key Performance Indicators to measure progress in building
shareholder value. These are shown below for the last two years:
+-------------+----------+----------+
| | 2010 | 2009 |
+-------------+----------+----------+
| Net | (0.1)% | 3.2% |
| sales | | |
| movement | | |
+-------------+----------+----------+
| Own | (3.5)% | (2.0)% |
| Stores | | |
| like | | |
| for | | |
| like | | |
| sales | | |
| growth | | |
+-------------+----------+----------+
| Profit | GBP6.1m | GBP6.3m |
| before | | |
| tax | | |
| and | | |
| exceptional | | |
| items | | |
+-------------+----------+----------+
| Gross | 49.7% | 48.9% |
| margin | | |
| return | | |
| on | | |
| sales | | |
+-------------+----------+----------+
| Cashflow | GBP14.6m | GBP19.2m |
| from | | |
| operating | | |
| activities | | |
+-------------+----------+----------+
Sales
Thorntons' sales are made through a number of channels, whose performance is
summarised below:
+------------+--------+--------+-----------+
| | 2010 | 2009 | % |
| | | | increase/ |
| | | | decrease |
+------------+--------+--------+-----------+
| | GBPm | GBPm | |
+------------+--------+--------+-----------+
| Own | 129.8 | 134.5 | (3.6)% |
| Stores | | | |
+------------+--------+--------+-----------+
| Franchise | 13.0 | 15.3 | (14.7)% |
+------------+--------+--------+-----------+
| Thorntons | 9.2 | 8.0 | 15.1% |
| Direct | | | |
+------------+--------+--------+-----------+
| Total | 152.0 | 157.8 | (3.7)% |
| Retail | | | |
| sales | | | |
+------------+--------+--------+-----------+
| Commercial | 62.6 | 57.0 | 9.8% |
| sales | | | |
+------------+--------+--------+-----------+
| Total | 214.6 | 214.8 | (0.1)% |
| sales | | | |
+------------+--------+--------+-----------+
A detailed review of the sales performance by channel is set out in the Chief
Executive's report.
Profit before taxation
Reported profit before taxation and exceptionals fell 2.4% to GBP6.1 million
(2009: GBP6.3 million). However, in both 2009 and 2010 there were a number of
one-off items charged to the accounts, as shown below, which, in line with Group
policy, have not been classed as exceptional items. Excluding these items,
underlying profit before taxation and exceptionals improved 14.2% to GBP7.5
million (2009: GBP6.6 million).
+--------------------------------------+--------+--------+--------+--------+
| | 2010 | 2009 |
+--------------------------------------+-----------------+-----------------+
| | GBPm | GBPm | GBPm | GBPm |
+--------------------------------------+--------+--------+--------+--------+
| Profit before taxation and | | 6.1 | | 6.3 |
| exceptionals | | | | |
+--------------------------------------+--------+--------+--------+--------+
| Redundancy charges | 0.6 | | - | |
+--------------------------------------+--------+--------+--------+--------+
| Impairment and onerous lease charges | 0.8 | | 0.3 | |
+--------------------------------------+--------+--------+--------+--------+
| Total one-off charges | | 1.4 | | 0.3 |
+--------------------------------------+--------+--------+--------+--------+
| Underlying profit before taxation | | 7.5 | | 6.6 |
| and exceptionals | | | | |
+--------------------------------------+--------+--------+--------+--------+
Exceptional items are set out in note 2.
With Group sales flat year on year, the improvement in underlying profit before
tax was achieved through a higher gross margin, a continued focus on controlling
operating expenses and lower interest costs.
The second half of the year is traditionally the quieter half of Thorntons'
financial year and historically has generated a loss for the Company. In the
second half of 2010, although sales increased by GBP0.7 million to GBP87.1
million (2009: GBP86.4 million), like for like sales in Own Stores declined
5.2%. This included the impact of higher levels of discounting to clear stock,
particularly after Easter. As a result, the loss before taxation and
exceptionals in the second half was GBP3.0 million (2009: GBP1.0 million).
Gross margin return on sales
Gross profit margin percentage increased 0.8% for the year to 49.7% (2009:
48.9%), although overall progress was hampered by the higher level of
discounting in the second half. Despite this gross margin increased by GBP1.6
million for the year.
Operating expenses
Operating expenses increased 2.3% to GBP100.7 million (2009: GBP98.4 million).
After adjusting for the one-off charges highlighted above, this increase was
reduced to 1.2%. Operating expenses as a percentage of sales increased from
45.8% in 2009 to 46.9% in 2010.
A number of one-off cost management measures were taken in 2009 (for instance
staff taking unpaid leave) but the focus in 2010 was on implementing sustainable
cost saving initiatives for both current and future years. This included
headcount reductions with 54 roles taken out of both manufacturing and head
office during 2010. Cost savings have also been secured in IT, telecoms, point
of sale and marketing materials as well as other areas of discretionary spend.
In addition efficiency cost savings are being achieved in manufacturing
following capital investment on the packaging and moulding lines.
Other operating income
Other operating income remained flat at GBP1.4 million (2009: GBP1.4 million).
Within other operating income licensing income increased from GBP0.9 million in
2009 to GBP1.0 million in 2010. Towards the end of 2010 new licences were put in
place for Thorntons branded biscuits and chilled desserts. The increase in
licence income was offset by small declines in franchise income and rent
receivable.
Taxation
The GBP1.8 million tax charge for the year represents 29.1% of PBT (2009:
55.4%). The main reason for the high charge in 2009 was the phasing out of
industrial buildings allowances ("IBAs") which previously had been tax
deductible and resulted in a deferred tax charge of GBP2.0 million.
After taking account of prior period adjustments, the 2010 effective rate
equates to 32.2% (2009: 31.0%). This, as in previous years, is higher than the
effective statutory rate of 28% and is due to the effect for tax purposes of
permanently disallowable items and a historic element of capital investment for
which no tax allowances are available.
Shareholders' returns and dividends
Basic earnings per share increased 20.4% from 5.40p to 6.50p. Dividends paid in
the year amounted to 6.80p per share which, following a reasonable period of
trading in the first half of the year, included an interim dividend of 1.95p per
share (2009: 1.20p per share). With the trading pressures experienced in the
second half of the year and the uncertain economic outlook, it is the intention
of the Board to recommend at the Annual General Meeting that a final dividend of
4.10p be paid to shareholders in November 2010, thus making a total dividend in
respect of the year's earnings of 6.05p (2009: 6.05p).
Cash and debt
Cash generated from operating activities before taxation declined from GBP19.2
million to GBP14.6 million. The growth in Commercial sales and their phasing for
the first half of the June 2011 year end contributed to higher stock levels
which increased by GBP5.0 million to GBP30.4 million (2009: GBP25.4 million).
Stock levels also increased in the lead up to the year-end to manage the lost
production time ahead of the new moulding machinery being commissioned in the
new financial year.
The increased investment in stock was partially funded through improved payment
terms from suppliers which reduced working capital outflows by GBP2.8 million.
Net debt was GBP26.0 million at the year end (2009: GBP26.7 million). The Group
has committed banking facilities with HSBC, Lloyds TSB Bank and
Santander/Alliance & Leicester totalling GBP55.0 million through to August 2012
and the covenant requirements under these agreements have been met.
Capital expenditure
Investment in fixed assets totalled GBP6.1 million (2009: GBP10.0 million), of
which GBP1.5 million (2009: GBP3.0 million) was funded through finance leases.
The 2009 investment in fixed assets included GBP3.0 million of expenditure on
the new EPOS systems. In 2010, GBP1.2 million was spent on 15 store refits,
seven café refurbishments, one store opening and one store re-site. GBP1.6
million was spent on a new moulding manufacturing line that will soon be fully
commissioned. The balance was invested in new product tooling, other supply
chain and IT improvements, including a GBP0.2 million spend on improvements to
the Thorntons Direct website.
Pensions
The IAS 19 pension scheme deficit increased from GBP21.3 million in 2009 to
GBP24.2 million at the 2010 year end. The increase in the value of the equity
markets over the twelve months to June 2010 contributed to a GBP6.7 million
increase in the valuation of the pension scheme assets. This increase was
however offset by the basis on which the present value of the scheme's
obligations is measured. A 0.9% decrease in the discount rate to 5.5% (2009:
6.4%) determined by reference to market yields on corporate bonds at the balance
sheet date has contributed to actuarial losses of GBP8.8 million.
Information systems
The key activity during the year has been the negotiation of the renewal of the
IT outsourcing contract which was due to expire in September 2011. A new
contract was agreed with the existing provider, Hewlett Packard, soon after the
year-end, and will deliver savings over the term of the contract, which includes
the current financial year.
We have also continued with system developments to ensure that the business
remains fully compliant with the credit card industry's PCI-DSS standard, which
sets the security standards for handling credit cards transactions.
Mark Robson
Finance Director
7 September 2010
Consolidated income statement
52 weeks ended 26 June 2010
+--------------+--------+--------------+--------------+-----------+--------------+--------------+-----------+
| | | 52 weeks ended 26 June | 52 weeks ended 27 June |
| | | 2010 | 2009 |
+--------------+--------+-----------------------------------------+-----------------------------------------+
| | | Before | Exceptionals | Total | Before | Exceptionals | Total |
| | | exceptionals | | | exceptionals | | |
+--------------+--------+--------------+--------------+-----------+--------------+--------------+-----------+
| | | GBP'000 | GBP'000 | GBP'000 | GBP'000 | GBP'000 | GBP'000 |
+--------------+--------+--------------+--------------+-----------+--------------+--------------+-----------+
| Revenue | | 214,553 | - | 214,553 | 214,805 | - | 214,805 |
+--------------+--------+--------------+--------------+-----------+--------------+--------------+-----------+
| Cost | | (108,009) | - | (108,009) | (109,836) | - | (109,836) |
| of | | | | | | | |
| sales | | | | | | | |
+--------------+--------+--------------+--------------+-----------+--------------+--------------+-----------+
| Gross | | 106,544 | - | 106,544 | 104,969 | - | 104,969 |
| profit | | | | | | | |
+--------------+--------+--------------+--------------+-----------+--------------+--------------+-----------+
| Operating | | (100,676) | - | (100,676) | (98,439) | 1,800 | (96,639) |
| expenses | | | | | | | |
+--------------+--------+--------------+--------------+-----------+--------------+--------------+-----------+
| Other | | 1,386 | - | 1,386 | 1,410 | - | 1,410 |
| operating | | | | | | | |
| income | | | | | | | |
+--------------+--------+--------------+--------------+-----------+--------------+--------------+-----------+
| Operating | | 7,254 | - | 7,254 | 7,940 | 1,800 | 9,740 |
| profit | | | | | | | |
+--------------+--------+--------------+--------------+-----------+--------------+--------------+-----------+
| Finance | | 212 | - | 212 | 38 | - | 38 |
| income | | | | | | | |
+--------------+--------+--------------+--------------+-----------+--------------+--------------+-----------+
| Finance | | (1,329) | - | (1,329) | (1,690) | - | (1,690) |
| costs | | | | | | | |
+--------------+--------+--------------+--------------+-----------+--------------+--------------+-----------+
| Profit | | 6,137 | - | 6,137 | 6,288 | 1,800 | 8,088 |
| before | | | | | | | |
| taxation | | | | | | | |
+--------------+--------+--------------+--------------+-----------+--------------+--------------+-----------+
| Taxation | | (1,783) | - | (1,783) | (1,946) | (2,537) | (4,483) |
+--------------+--------+--------------+--------------+-----------+--------------+--------------+-----------+
| Profit | | 4,354 | - | 4,354 | 4,342 | (737) | 3,605 |
| attributable | | | | | | | |
| to owners of | | | | | | | |
| the parent | | | | | | | |
+--------------+--------+--------------+--------------+-----------+--------------+--------------+-----------+
| | | | | | | | |
+--------------+--------+--------------+--------------+-----------+--------------+--------------+-----------+
| Earnings | | | | | | | |
| per | | | | | | | |
| share | | | | | | | |
+--------------+--------+--------------+--------------+-----------+--------------+--------------+-----------+
| Basic | | | | 6.5p | | | 5.4p |
+--------------+--------+--------------+--------------+-----------+--------------+--------------+-----------+
| Diluted | | | | 6.5p | | | 5.4p |
+--------------+--------+--------------+--------------+-----------+--------------+--------------+-----------+
All activities in both the current and previous year relate to continuing
operations.
Dividend per share
+---------------+--------+--------+--------+
| | Note | 2010 | 2009 |
+---------------+--------+--------+--------+
| Proposed | | 4.10p | 4.85p |
| final | | | |
| dividend | | | |
+---------------+--------+--------+--------+
| Impact | 3 | 2,745 | 3,247 |
| on | | | |
| shareholders | | | |
| funds | | | |
| (GBP000) | | | |
+---------------+--------+--------+--------+
| Total | | 6.05p | 6.05p |
| dividend | | | |
| in | | | |
| respect | | | |
| of the | | | |
| year | | | |
+---------------+--------+--------+--------+
| Impact | 3 | 4,051 | 4,050 |
| on | | | |
| shareholders | | | |
| funds | | | |
| (GBP000) | | | |
+---------------+--------+--------+--------+
| Paid | | 6.80p | 6.05p |
| in the | | | |
| year | | | |
+---------------+--------+--------+--------+
| Impact | 3 | 4,553 | 4,040 |
| on | | | |
| shareholders | | | |
| funds | | | |
| (GBP000) | | | |
+---------------+--------+--------+--------+
Statements of comprehensive income
52 weeks ended 26 June 2010
+-------------------+---------+---------+
| | 52 | 52 |
| | weeks | weeks |
| | ended | ended |
| | 26 | 27 |
| | June | June |
| | 2010 | 2009 |
+-------------------+---------+---------+
| | GBP'000 | GBP'000 |
+-------------------+---------+---------+
| Profit | 4,354 | 3,605 |
| for | | |
| the | | |
| period | | |
+-------------------+---------+---------+
| Other | | |
| comprehensive | | |
| (expense)/income: | | |
+-------------------+---------+---------+
| - | (4,040) | (8,629) |
| actuarial | | |
| loss | | |
| recognised | | |
| in the | | |
| defined | | |
| benefit | | |
| pension | | |
| scheme | | |
+-------------------+---------+---------+
| - | 1,131 | 2,416 |
| movement | | |
| of | | |
| deferred | | |
| tax on | | |
| pension | | |
| liability | | |
+-------------------+---------+---------+
| Total | (2,909) | (6,213) |
| other | | |
| comprehensive | | |
| expense | | |
+-------------------+---------+---------+
| Total | 1,445 | (2,608) |
| comprehensive | | |
| income/(expense) | | |
| for the | | |
| financial period | | |
| attributable | | |
| to owners of the | | |
| parent | | |
+-------------------+---------+---------+
Statements of changes in shareholders' equity
52 weeks ended 26 June 2010
+---------------+---------+---------+----------+---------+
| | Share | Share | Retained | Total |
| | capital | premium | earnings | |
+---------------+---------+---------+----------+---------+
| | GBP'000 | GBP'000 | GBP'000 | GBP'000 |
+---------------+---------+---------+----------+---------+
| At 28 | 6,835 | 13,750 | 14,450 | 35,035 |
| June | | | | |
| 2008 | | | | |
+---------------+---------+---------+----------+---------+
| Profit | - | - | 3,605 | 3,605 |
| for | | | | |
| the | | | | |
| period | | | | |
+---------------+---------+---------+----------+---------+
| Other | - | - | (6,213) | (6,213) |
| comprehensive | | | | |
| expense | | | | |
+---------------+---------+---------+----------+---------+
| Total | - | - | (2,608) | (2,608) |
| comprehensive | | | | |
| income for | | | | |
| the period | | | | |
| ended | | | | |
| 27 June 2009 | | | | |
+---------------+---------+---------+----------+---------+
| Transactions | | | | |
| with owners: | | | | |
+---------------+---------+---------+----------+---------+
| - new | - | 2 | - | 2 |
| share | | | | |
| capital | | | | |
| issued | | | | |
+---------------+---------+---------+----------+---------+
| - | - | - | 520 | 520 |
| share-based | | | | |
| payment | | | | |
| charge | | | | |
+---------------+---------+---------+----------+---------+
| - | - | - | (171) | (171) |
| effect | | | | |
| of tax | | | | |
| on | | | | |
| share | | | | |
| option | | | | |
| movement | | | | |
+---------------+---------+---------+----------+---------+
| - | - | - | (4,040) | (4,040) |
| dividends | | | | |
+---------------+---------+---------+----------+---------+
| At 27 | 6,835 | 13,752 | 8,151 | 28,738 |
| June | | | | |
| 2009 | | | | |
+---------------+---------+---------+----------+---------+
| Profit | - | - | 4,354 | 4,354 |
| for | | | | |
| the | | | | |
| period | | | | |
+---------------+---------+---------+----------+---------+
| Other | - | - | (2,909) | (2,909) |
| comprehensive | | | | |
| expense | | | | |
+---------------+---------+---------+----------+---------+
| Total | - | - | 1,445 | 1,445 |
| comprehensive | | | | |
| income for | | | | |
| the period | | | | |
| ended | | | | |
| 26 June 2010 | | | | |
+---------------+---------+---------+----------+---------+
| Transactions | | | | |
| with owners: | | | | |
+---------------+---------+---------+----------+---------+
| - new | 2 | 16 | - | 18 |
| share | | | | |
| capital | | | | |
| issued | | | | |
+---------------+---------+---------+----------+---------+
| - | - | - | 379 | 379 |
| share-based | | | | |
| payment | | | | |
| charge | | | | |
+---------------+---------+---------+----------+---------+
| - | - | - | (59) | (59) |
| effect | | | | |
| of tax | | | | |
| on | | | | |
| share | | | | |
| option | | | | |
| movement | | | | |
+---------------+---------+---------+----------+---------+
| - | - | - | (4,553) | (4,553) |
| dividends | | | | |
+---------------+---------+---------+----------+---------+
| At 26 | 6,837 | 13,768 | 5,363 | 25,968 |
| June | | | | |
| 2010 | | | | |
+---------------+---------+---------+----------+---------+
Consolidated balance sheet at 26 June 2010
+---------------+--------+---------+---------+
| | | 2010 | 2009 |
+---------------+--------+---------+---------+
| | | GBP'000 | GBP'000 |
+---------------+--------+---------+---------+
| Assets | | | |
+---------------+--------+---------+---------+
| Non-current | | | |
| assets | | | |
+---------------+--------+---------+---------+
| Intangible | | 3,451 | 4,850 |
| assets | | | |
+---------------+--------+---------+---------+
| Property, | | 58,533 | 62,759 |
| plant and | | | |
| equipment | | | |
+---------------+--------+---------+---------+
| | | 61,984 | 67,609 |
+---------------+--------+---------+---------+
| Current | | | |
| assets | | | |
+---------------+--------+---------+---------+
| Inventories | | 30,393 | 25,370 |
+---------------+--------+---------+---------+
| Trade | | 15,977 | 14,056 |
| and | | | |
| other | | | |
| receivables | | | |
+---------------+--------+---------+---------+
| Cash | | 1,626 | 588 |
| and | | | |
| cash | | | |
| equivalents | | | |
+---------------+--------+---------+---------+
| | | 47,996 | 40,014 |
+---------------+--------+---------+---------+
| Total | | 109,980 | 107,623 |
| assets | | | |
+---------------+--------+---------+---------+
| Equity | | | |
| and | | | |
| liabilities | | | |
+---------------+--------+---------+---------+
| Shareholders' | | | |
| equity | | | |
| attributable | | | |
| to owners of | | | |
| the parent | | | |
+---------------+--------+---------+---------+
| Ordinary | | 6,837 | 6,835 |
| shares | | | |
+---------------+--------+---------+---------+
| Share | | 13,768 | 13,752 |
| premium | | | |
+---------------+--------+---------+---------+
| Retained | | 5,363 | 8,151 |
| earnings | | | |
+---------------+--------+---------+---------+
| Total | | 25,968 | 28,738 |
| equity | | | |
+---------------+--------+---------+---------+
| Liabilities | | | |
+---------------+--------+---------+---------+
| Current | | | |
| liabilities | | | |
+---------------+--------+---------+---------+
| Trade | | 25,390 | 22,628 |
| and | | | |
| other | | | |
| payables | | | |
+---------------+--------+---------+---------+
| Borrowings | | 24,090 | 22,625 |
+---------------+--------+---------+---------+
| Current | | 614 | 1,043 |
| tax | | | |
| liabilities | | | |
+---------------+--------+---------+---------+
| Provisions | | 297 | 254 |
| for | | | |
| liabilities | | | |
+---------------+--------+---------+---------+
| | | 50,391 | 46,550 |
+---------------+--------+---------+---------+
| Non-current | | | |
| liabilities | | | |
+---------------+--------+---------+---------+
| Borrowings | | 3,557 | 4,637 |
+---------------+--------+---------+---------+
| Deferred | | 1,800 | 2,917 |
| tax | | | |
| liabilities | | | |
+---------------+--------+---------+---------+
| Retirement | | 24,219 | 21,313 |
| benefit | | | |
| obligations | | | |
+---------------+--------+---------+---------+
| Other | | 2,827 | 2,816 |
| non-current | | | |
| liabilities | | | |
+---------------+--------+---------+---------+
| Provisions | | 1,218 | 652 |
| for | | | |
| liabilities | | | |
+---------------+--------+---------+---------+
| | | 33,621 | 32,335 |
+---------------+--------+---------+---------+
| Total | | 84,012 | 78,885 |
| liabilities | | | |
+---------------+--------+---------+---------+
| Total | | 109,980 | 107,623 |
| equity | | | |
| and | | | |
| liabilities | | | |
+---------------+--------+---------+---------+
Consolidated cash flow statement
52 weeks ended 26 June 2010
+---------------------+--------+---------+----------+
| | | 52 | 52 |
| | | weeks | weeks |
| | | ended | ended |
| | | 26 | 27 |
| | | June | June |
| | | 2010 | 2009 |
+---------------------+--------+---------+----------+
| | | GBP'000 | GBP'000 |
+---------------------+--------+---------+----------+
| Cash | | 14,579 | 19,151 |
| generated | | | |
| from | | | |
| operations | | | |
+---------------------+--------+---------+----------+
| Corporate | | (2,255) | (2,013) |
| taxation | | | |
+---------------------+--------+---------+----------+
| Interest | | 177 | 27 |
| received | | | |
+---------------------+--------+---------+----------+
| Cash | | 12,501 | 17,165 |
| flows | | | |
| from | | | |
| operating | | | |
| activities | | | |
+---------------------+--------+---------+----------+
| Cash | | | |
| flows | | | |
| from | | | |
| investing | | | |
| activities | | | |
+---------------------+--------+---------+----------+
| Proceeds | | 136 | 51 |
| from | | | |
| sale of | | | |
| property, | | | |
| plant and | | | |
| equipment | | | |
+---------------------+--------+---------+----------+
| Purchase | | (4,605) | (7,112) |
| of | | | |
| property, | | | |
| plant and | | | |
| equipment | | | |
+---------------------+--------+---------+----------+
| Net | | (4,469) | (7,061) |
| cash | | | |
| used | | | |
| in | | | |
| investing | | | |
| activities | | | |
+---------------------+--------+---------+----------+
| Cash | | | |
| flows | | | |
| from | | | |
| financing | | | |
| activities | | | |
+---------------------+--------+---------+----------+
| Net | | 18 | 2 |
| proceeds | | | |
| from | | | |
| issue of | | | |
| ordinary | | | |
| shares | | | |
+---------------------+--------+---------+----------+
| Interest | | (1,346) | (1,469) |
| paid | | | |
+---------------------+--------+---------+----------+
| Capital | | (3,613) | (3,297) |
| element | | | |
| of | | | |
| finance | | | |
| lease | | | |
| rental | | | |
| payments | | | |
+---------------------+--------+---------+----------+
| Borrowings | | 2,500 | (1,800) |
| advanced/(repaid) | | | |
+---------------------+--------+---------+----------+
| Dividends | 3 | (4,553) | (4,040) |
| paid | | | |
+---------------------+--------+---------+----------+
| Net | | (6,994) | (10,604) |
| cash | | | |
| used | | | |
| in | | | |
| financing | | | |
| activities | | | |
+---------------------+--------+---------+----------+
| Net | | 1,038 | (500) |
| increase/(decrease) | | | |
| in cash and cash | | | |
| equivalents and | | | |
| bank overdrafts | | | |
+---------------------+--------+---------+----------+
| Cash | | 588 | 1,088 |
| and | | | |
| cash | | | |
| equivalents | | | |
| at | | | |
| beginning | | | |
| of period | | | |
+---------------------+--------+---------+----------+
| Cash | | 1,626 | 588 |
| and | | | |
| cash | | | |
| equivalents | | | |
| at end of | | | |
| period | | | |
+---------------------+--------+---------+----------+
Notes to the preliminary announcement
1 Basis of preparation
This preliminary announcement does not constitute statutory accounts within the
meaning of section 434 of the Companies Act 2006. The financial information for
the years ended 26 June 2010 and 27 June 2009 has been extracted from the
consolidated financial statements on which the auditors have given unqualified
opinions and which do not contain statements under Sections 498(2) or 498(3) of
the Companies Act 2006. This announcement has been agreed with the Company's
auditors for release.
The financial information included in this preliminary announcement does not
include all the disclosures required by International Financial Reporting
Standard ("IFRS") or the Companies Act 2006 and accordingly it does not itself
comply with IFRS or the Companies Act 2006.
The Group's financial statements for the year ended 27 June 2009 have been
delivered to the Registrar of Companies and 26 June 2010 will be delivered to
the Registrar of Companies following the Company's Annual General Meeting.
The Group prepares its annual consolidated financial statements in accordance
with International Financial Reporting Standards ("IFRS") and International
Financial Reporting Interpretations Committee ("IFRIC") interpretations as
adopted by the European Union ("EU") and with those parts of the Companies Act
2006 applicable to companies reporting under IFRS. There are no material
differences between the accounting policies adopted for use in the preparation
of the consolidated financial statements for the year ended 26 June 2010, the
financial information included in this preliminary announcement and the
accounting policies disclosed in the 2009 Annual Report and Financial
Statements, copies of which are available on Thorntons plc website,
www.thorntons.co.uk.
These consolidated financial statements have been prepared under the historical
cost convention with the exception of derivative financial instruments and share
based payments which are recognised at fair value.
This preliminary announcement will be published on the Company's website, in
addition to the paper version. The maintenance and integrity of the website is
the responsibility of the directors. The work carried out by the auditors does
not involve consideration of these matters. Legislation in the United Kingdom
governing the preparation and dissemination of financial statements may differ
from legislation in other jurisdictions.
2 Exceptional items
Exceptional items comprise:
+--------------+---------+---------+
| | 52 | 52 |
| | weeks | weeks |
| | ended | ended |
| | 26 | 27 |
| | June | June |
| | 2010 | 2009 |
+--------------+---------+---------+
| | GBP'000 | GBP'000 |
+--------------+---------+---------+
| Pension | - | 2,300 |
| curtailment | | |
| gain | | |
+--------------+---------+---------+
| Franchisee | - | (500) |
| bad debt | | |
+--------------+---------+---------+
| | - | 1,800 |
+--------------+---------+---------+
| Tax | - | 504 |
| charge | | |
| attributable | | |
| to | | |
| exceptional | | |
| items | | |
+--------------+---------+---------+
| Net | - | 2,033 |
| tax | | |
| impact | | |
| of | | |
| withdrawal | | |
| of IBAs | | |
+--------------+---------+---------+
| | - | 2,537 |
+--------------+---------+---------+
Pension curtailment gain
In 2009 the Group implemented a change to the defined benefit pension scheme
from a final salary to a CARE basis. Under the CARE Scheme, pension benefits are
built up each year linked to the members' pensionable salaries in that year.
This reduction in pension benefits resulted in a curtailment gain which, in line
with IAS 19, was valued at GBP2,300,000.
Franchisee bad debt
The 2009 charge related to the creation of a provision against an unusually
large bad debt following the insolvency of a major franchisee.
Tax charge attributable to exceptional items
This was the tax charge arising in relation to the exceptional profit and loss
items calculated at the standard rate of 28%.
Net tax impact of withdrawal of industrial buildings allowances ("IBAs")
This related to a one-off charge of GBP3,053,000 arising from the withdrawal of
IBAs. This was offset by a GBP1,020,000 tax credit arising from a revision of
capital allowance claims made in respect of plant and machinery.
3 Ordinary dividends
+---------------+---------+---------+
| | 2010 | 2009 |
+---------------+---------+---------+
| | GBP'000 | GBP'000 |
+---------------+---------+---------+
| Final | 3,247 | 3,237 |
| dividend | | |
| paid for | | |
| the 52 | | |
| weeks | | |
| ended 27 | | |
| June | | |
| 2009 of | | |
| 4.85p | | |
| (52 | | |
| weeks | | |
| ended 28 | | |
| June | | |
| 2008: | | |
| 4.85p) | | |
+---------------+---------+---------+
| Interim | 1,306 | 803 |
| dividend | | |
| paid in | | |
| respect | | |
| of the | | |
| 52 weeks | | |
| ended 26 | | |
| June | | |
| 2010 of | | |
| 1.95p | | |
| (52 | | |
| weeks | | |
| ended 27 | | |
| June | | |
| 2009: | | |
| 1.20p) | | |
+---------------+---------+---------+
| Amounts | 4,553 | 4,040 |
| recognised | | |
| as | | |
| distributions | | |
| to owners of | | |
| the parent | | |
+---------------+---------+---------+
In addition, the Directors are proposing a final dividend in respect of the year
ended 26 June 2010 of 4.10p per share which will absorb an estimated
GBP2,700,000 of shareholders' funds. It will be paid on 26 November 2010 to
shareholders who are on the register of members on 29 October 2010.
The trusts operating the Long-Term Incentive Plan Scheme ("LTIP 2007") have
fully waived dividends on the 504,610 shares (2009: 504,610) held at 26 June
2010 and all but 0.01p per share on the 905,070 (2009: 905,070) shares held in
respect of the 2001 Executive Share Option Scheme.
4 Reconciliation of movement in net debt
+---------------------+----------+----------+
| | 2010 | 2009 |
+---------------------+----------+----------+
| | GBP'000 | GBP'000 |
+---------------------+----------+----------+
| Increase/(decrease) | 1,038 | (500) |
| in cash and cash | | |
| equivalents | | |
+---------------------+----------+----------+
| Cash | 1,113 | 5,097 |
| flows | | |
| from | | |
| decrease | | |
| in debt | | |
+---------------------+----------+----------+
| Change | 2,151 | 4,597 |
| in net | | |
| debt | | |
| resulting | | |
| from cash | | |
| flow | | |
+---------------------+----------+----------+
| Inception | (1,498) | (3,007) |
| of new | | |
| finance | | |
| leases | | |
+---------------------+----------+----------+
| Movement | 653 | 1,590 |
| in net | | |
| debt in | | |
| the | | |
| period | | |
+---------------------+----------+----------+
| Net | (26,674) | (28,264) |
| debt | | |
| at | | |
| beginning | | |
| of period | | |
+---------------------+----------+----------+
| Net | (26,021) | (26,674) |
| debt | | |
| at end | | |
| of | | |
| period | | |
+---------------------+----------+----------+
This information is provided by RNS
The company news service from the London Stock Exchange
END
FR BIGDCCGGBGGR
Thorntons Plc (LSE:THT)
Historical Stock Chart
From Oct 2024 to Nov 2024
Thorntons Plc (LSE:THT)
Historical Stock Chart
From Nov 2023 to Nov 2024
