TIDMTHT
RNS Number : 1748G
Thorntons PLC
02 March 2015
For immediate release
Thorntons Plc ("Thorntons" or "the Company")
Half Year Results for the 28 weeks to 10 January 2015
Financial Highlights
-- Revenues GBP128.2 million (2014: GBP139.7 million)
-- Profit before tax and exceptional items GBP6.5 million (2014: GBP7.2 million)
-- EBIT margin 6.4% (2014: 6.2%)
-- Basic EPS 7.2 pence (2014: 7.8 pence)
-- Cash generated from operations GBP10.7 million (2014: GBP13.0 million)
-- Exceptional items before tax GBPnil (2014: GBP1.0 million)
Operational Highlights
-- FMCG division sales declined 11.2% to GBP62.7 million (2014: GBP70.6 million)
o UK Commercial sales declined 12.4% to GBP54.7 million (2014:
GBP62.4 million):
- Good growth in many grocery, convenience and high street
accounts offset by underperformance in two key accounts
- Grew market share in Seasonal Specialities to 7.3% (2014: 6.4%)
o International sales grew 19.9% to GBP5.4 million (2014: GBP4.5
million)
-- Retail division reported 2.2% continued like-for-like growth (2014: 2.1%)
o Outstanding Christmas with December like for like sales growth
of 7.8%
o On track to close around 20 stores during the financial year,
towards creating a sustainable store portfolio of between 180 and
200 stores
o Consumer Direct sales increased 11.4% to GBP4.5 million (2014:
GBP4.1 million)
o Franchise sales decreased 12.0% to GBP4.5 million (2014:
GBP5.1 million).
Jonathan Hart, Thorntons' Chief Executive Officer,
commented:
"We report a mixed performance from our two divisions. Our
Retail division delivered further like for like sales growth as a
result of actions we have taken to improve its performance. Our
FMCG division, however, suffered from difficult trading conditions
in its UK Commercial sales channel. We responded quickly by
controlling costs and production.
"Our retail performance and brand tracker demonstrate that the
Thorntons' brand continues to strengthen, providing us with the
confidence that we can improve certain commercial relationships,
focussing on sustainable growth. We continue to make planned
investments in people, systems, and manufacturing capability,
needed to succeed in the FMCG market. We have taken the first steps
in a programme to improve the effectiveness and efficiency of the
core business, restructuring our executive team and business
functions in order to create an organisation that will win in
FMCG.
"The difficult trading conditions in our UK Commercial channel
have persisted into the second half. Ahead of our key spring
seasons, we continue to be cautious in our expectations for the
full year. We maintain strict control of costs and production and
remain confident of our strategy. We are well positioned to take
advantage of an improvement in consumer spending."
Introduction
The first half of the financial year saw a mixed trading
performance as we continued to make progress with our strategy of
transforming Thorntons from a business focused primarily on retail
distribution towards an emerging international FMCG company with a
strong UK multichannel retail division. Alongside positive results
from our Retail division we were disappointed that the continued
growth anticipated in the UK Commercial channel in our FMCG
division was not delivered. This was the result of an unexpected
reduction in orders from two of our major grocery partners. In
addition, the period saw disruption in supply and service to our
customers as a result of now resolved short-term difficulties at
our new centralised warehouse.
During the period under review, profit before tax and
exceptional items declined by 8.8% to GBP6.5 million (2014: GBP7.2
million). Having considered the current and future capital
requirements of the business, the Board has decided not to pay an
interim dividend (2014: nil pence). The Board intends to adopt a
progressive dividend policy as soon as the trading performance and
prospects for the business allow.
Overall sales decreased by 8.2% to GBP128.2 million (2014:
GBP139.7 million). While we continue to anticipate an overall sales
decline in our Retail division as we progress with the planned
reduction in our Own Store estate towards our longer-term ambition
of between 180 and 200 stores, the overall Company sales decline
during the period was the result of the unanticipated reduction in
sales in our UK Commercial channel. We have clearly identified the
key drivers and are addressing them. We remain confident that our
strategy of Rebalance and grow, Revitalise and Restore is the right
one and that the work we are doing to strengthen the Thorntons
brand continues to be well regarded by our consumers.
FMCG division
Total sales in the FMCG division declined by 11.2% to GBP62.7
million (2014: GBP70.6 million) as further growth in our
International channel was offset by the unanticipated decline in
our UK Commercial channel.
UK Commercial
Sales to the grocers and other third-party retailers declined by
12.4% to GBP54.7 million (2014: GBP62.4 million). Despite an
increase in sales in many of our grocery, convenience and high
street accounts we experienced an unexpected reduction in
previously indicated orders from two of our major grocery accounts
where, in particular, prior year selling space to high-volume lines
was not repeated. This resulted in a decline in our overall share
of the Christmas market (Total Boxed Chocolates plus Seasonal
Specialities - 18 weeks to 27 December) to 7.4% from 8.4% the prior
year. The significant majority of this shortfall is attributable to
these two grocery accounts. Analysis of Nielsen data shows that
grocers that supported Thorntons during the period performed better
in the Total Boxed Chocolate category. As such we are confident
that this issue reflects the need to improve our commercial
relationship with these two grocers and is not a reflection on
shopper demand or regard for the Thorntons brand, which remains
strong and growing.
Sales of Seasonal Specialities grew by 10.3%, resulting in a
market share of 7.3%, an increase from 6.4% the prior year, with
sales of Advent calendars and our Snowman models being the
highlights of another strong season.
International
International sales grew by 19.9% to GBP5.4 million (2014:
GBP4.5 million). This increase was primarily driven by our activity
in the United States where during the period, we saw our largest
ever international shipment; a mix of private label and Thorntons
branded products. We are currently undertaking a review of seasonal
performance with our US customers in order to evaluate our next
steps. Our Australian supply chain is now established, positioning
us well, and we remain encouraged by the prospects in this region.
Traveller demand for our brand in tax and duty-free locations in
the UK and UAE remains encouraging and presents opportunities for
future growth.
Private label
Sales of Private Label declined to GBP2.3 million (2014: GBP3.4
million). Whilst this remains a small part of our business, we
continue to seek opportunities to grow profitably in this area with
partners where we have no possibility to sell Thorntons branded
goods. After the close of the period we secured a significant
contract with our largest long-term private label customer that
should see a return to substantial growth in this part of our
business during the next financial year.
Manufacturing operations and supply chain
The period saw continued investment in our manufacturing
facility in line with our previously outlined strategy of investing
in areas of competitive advantage. We successfully installed an
additional decorated hollow production line, adding further
capacity to meet our requirements for Easter 2015 and beyond.
Furthermore, the planned investment in a new moulded line for
inlaid chocolates continues, ready for installation in late
spring/summer of 2015. This will deliver capability to meet market
trends as well as support efficiency improvements and deliver
future capacity.
In response to the unanticipated decline in orders from two of
our grocery partners our manufacturing operations again
demonstrated flexibility, responding quickly in order to minimise
the effect on stockholding levels. Although finished stocks are
higher than expected, the quality of stock is good with seasonal
stock at usual levels. Stockholding consists primarily of
year-round inlaid boxed chocolates and a sizeable level of 2015
Easter stock, reflecting the slightly earlier timing of the season
this year.
During November, and despite extensive planning and testing, we
encountered significant short-term difficulties in the
commissioning of our new central warehouse. Consolidating up to
seven separate locations, including our warehouse at Thornton Park
in Alfreton, this new facility operated by our logistics partner
has been commissioned to provide improved service levels and future
capacity. Notwithstanding the significant effect on our business in
terms of late and lost sales, the problems encountered were quickly
identified and resolved and the new warehouse capably handled
several record weeks of volume in December.
In terms of input costs, the price of cocoa continued to rise in
the early part of the period but has now reduced a little from this
peak. As always, we continue to work hard to protect margins by
leveraging our global purchasing reach, product and packaging
re-engineering, range refreshment, ingredient optimisation,
manufacturing efficiencies and category management. Our procurement
extends on a global basis and we continue to take opportunities to
forward buy in order to secure prices in core commodities, thereby
enabling more robust planning. Looking forward, we anticipate a
more benign overall input cost environment with a modest level of
input cost inflation during 2015.
Retail division
Total sales for the Retail division declined by 5.2% to GBP65.5
million (2014: GBP69.1 million). After a subdued first quarter for
our Retail division, the key Christmas quarter saw a strong
performance in particular from our Own Stores and Consumer Direct
channels. Like for like sales increased by 2.2% (2014: 2.1%) for
the period. This included an outstanding December (up to Christmas
Eve) which saw like-for-like growth of 7.8%, highlighting the
strength of the Thorntons brand and product offer. It also
demonstrates the value of the initiatives we have applied to this
division over recent years.
Own Stores
During the period, Own Store sales reduced by 6.5% to GBP55.0
million (2014: GBP58.8 million), mainly as a result of our planned
store closures. The economic environment remained challenging for
our shoppers despite small signs of improvement towards the end of
the period.
We closed 16 stores (2014: 15 stores) over the period at a cost
of GBP0.4 million (2014: GBP0.9 million), mainly in line with lease
expiry. We relocated three of these stores and will continue to do
small numbers of these in locations of high footfall where we do
not have optimum stores or locations. We refurbished a further 8
stores, bringing the total number of refurbished stores to 36. We
continue to take advantage of opportunities in the property market,
retaining stores on short-term leases or licences if attractive
terms are available. We remain confident in our strategy of
"right-sizing" our retail estate. We expect to close approximately
20 stores during this financial year towards achieving our
longer-term objective of creating a flexible and sustainable estate
of between 180 and 200 stores. We ended the first half with 247
stores.
During the Christmas season we successfully opened temporary
kiosk merchandising units in 35 malls and shopping centres,
extending the reach of our Own Stores network during this period of
seasonal strength for Thorntons.
Excellent growth in shopper demand for our Advent calendars,
boxed chocolates and seasonal specialities, including our highly
successful Snowman range, were highlights of an outstanding run up
to Christmas and clearly reflect our shoppers' appreciation for our
brand, product offer and in-store experience.
Consumer Direct
A good performance from our online business saw sales increase
by 11.4% to GBP4.5 million (2014: GBP4.1 million). Sales of our
hampers were again a highlight of our performance, with sales
increasing by 49% over the period. Despite being a small part of
our overall sales mix, during the period under review we have had
success in delivering a more profitable balance between sales and
marketing investment and we continue to focus on this.
Franchise
Franchise sales declined by 12.0% to GBP4.5 million (2014:
GBP5.1 million). During the period six franchises opened and six
closed, resulting in 175 franchises at the end of the period.
During the period one of our multiple franchise partners underwent
a change of ownership process that resulted in a significant
shortfall in sales for us during the peak selling period.
Additionally, the challenges experienced in our new central
warehouse created disruption in service to our franchisees during
November, a key period of peak stock intake, resulting in some
level of sales shortfall.
Financial performance
The period under review saw both revenues and profits lower than
in the first half last year. This has had a predictable impact on
the six KPIs that are used to monitor the financial health and
progress of the business.
These KPIs are set out below:
Pre-exceptional profit before tax GBP6.5 million (2014: GBP7.2
million)
Pre-exceptional EBIT margin % 6.4% (2014: 6.2%)
Earnings per share 7.2 pence (2014: 7.8 pence)
Cash from operations GBP10.7 million (2014: GBP13.0 million)
Net sales growth -8.2% (2014: +4.5%)
FMCG sales participation 48.9% (2014: 50.5%)
The business saw cash flow from operations fall from GBP13.0
million in the first half last year to GBP10.7 million in the
period under review, partly due to lower operating cash flow before
working capital of GBP0.9 million driven by lower operating profit
and depreciation charges.
Combined with the above movement, a working capital cash outflow
of GBP0.7 million in the period under review, compared to a GBP0.7
million cash inflow in the same period last year, accounts for the
full annual variance of GBP2.3 million. The main driver of the
switch to a working capital outflow in the first half of this year
was the planned increase in debtor balances and the lower
associated cash inflow from debtors as our transformation into an
FMCG business continues.
Total cash flow in the period under review was an inflow of
GBP1.6 million, compared to an inflow of GBP7.1 million in the same
period last year. Of this GBP5.5 million adverse variance, the
GBP3.2 million not accounted for in operational cash flow movements
was due to higher cash interest costs of GBP1.1 million, the result
of higher average net debt, and higher capital expenditure of
GBP2.0 million, plus a further GBP0.1 million of other negative
cash flow movements.
We closed the period under review with net debt of GBP30.8
million, GBP11.0 million higher than the same period last year.
The Company continues to have access to c.GBP75 million of
committed cash funding until October 2018 and a further GBP5
million overdraft renegotiated annually.
Full details of closing net debt and the movements since the
first half of last year and the year-end position are given in note
14 to these accounts.
After making the appropriate enquiries, the Directors believe
that the Company continues to have sufficient financial resources
to continue trading as a going concern.
Margin and operating expenses
The unanticipated switch in the participation of higher gross
margin sales through our Retail division led to an increase in
statutory gross margins, which improved to 41.9% from 41.5%. As we
have stated previously, we make a higher gross margin on our Retail
divisional sales than we do on our FMCG divisional sales, but this
is reversed lower down the Income statement, where at the net
margin level we make a greater percentage margin on our FMCG sales.
Please see our segmental analysis in note 6 to these accounts for
further details of our divisional split of revenues and
margins.
Pre-exceptional operating costs in the period under review
reduced to GBP46.1 million from GBP50.1 million in the same period
last year. This was primarily due to the ongoing store closure
programme, which saw the net closure of another 13 stores in the
financial half-year period. In addition, management responded
swiftly to the revenue shortfalls, resulting in approximately GBP1
million of lower central operating costs than in the first half
last year. As a percentage of sales, pre-exceptional operating
expenses remained broadly flat at 36%.
As we have previously outlined, the most important measure of
our overall financial performance is our pre-exceptional EBIT
margin and, despite disappointing revenue results and a modest
reversal in our FMCG sales revenue participation, proactive cost
management generated a modest increase in our pre-exceptional EBIT
margin to 6.4%, up from 6.2% last financial half year.
Other operating income declined marginally to GBP0.6 million
(2014: GBP0.7 million) with a small decrease in licensing
income.
Exceptional costs
Exceptional costs in the half year under review were GBPnil
(2014: GBP1.0 million), with no significant changes to levels of
onerous lease provision or asset impairment required in the period.
Further details of these charges in 2014 are given in note 7 to
this report.
Taxation
The accounting charge for taxation through the Income statement
for the period under review was GBP1.7 million (2014: GBP1.0
million), compared to the pre-exceptional PBT in the Income
statement, the tax charge equates to a percentage rate of 26%. This
is higher than the statutory rate of taxation due to adjustments
for non-allowable depreciation and other permanent non-qualifying
expenditure. The equivalent percentage rate from the Income
statement in the first half last year was 14.9%, as that half
benefited from a one-off credit of GBP0.3 million for prior year
tax over-payments and a GBP0.5 million credit for the impact of the
lowering of the statutory tax rates on the Company's deferred tax
assets.
Pension scheme
The deficit on the Company's defined benefit scheme was GBP36.7
million at the half-year end (2014: GBP28.3 million). The main
driver of the increase in this long-term liability was the decrease
in the discount rate used to express these future liabilities to a
present value. The scheme remains closed to new members and to
future accrual. Following the most recent triennial valuation of
the defined benefit scheme, the Company and trustees are finalising
a new deficit recovery schedule which will see the annual deficit
payment increase from GBP2.75 million to GBP3.25 million per
annum.
Principal risks and uncertainties
Key risks are regularly reviewed by the Executive Directors and
Senior Management. The key risks and uncertainties facing the
business are detailed in note 17.
Executive and Board responsibility changes
We have identified the transformation of our people, systems and
processes as an essential enabler of achieving our stated strategy
to transform our business towards an emerging FMCG company with a
strong UK retail division. Towards that objective, effective today,
we have made changes to executive roles and responsibilities with
the objective of increasing our focus on winning in FMCG whilst
ensuring a strong UK retail division.
We have created two new operating boards, one for each operating
division - FMCG and Retail. The FMCG operating board, chaired by
the Chief Executive Officer ("CEO"), has the objective of creating
a core business focus around developing a class-leading approach to
FMCG, improving efficiencies and aligning resources to deliver. A
key part of this is developing a strong relationship between the
marketing and commercial sales functions. To this end, a new role
of Sales and Marketing Director has been created. Simon Foster,
previously our Marketing Director, takes on the additional
responsibility for UK Commercial sales and brings his extensive
branded FMCG experience and skills to the role. In addition, the
importance of our international development has been recognised by
moving this to report directly into the CEO.
The Retail operating board will be chaired by a new role of
Managing Director - Retail division. Geoff Kershaw, previously
Retail Trading Director, steps up to this role, which brings
together responsibility for the business performance of the entire
division. A key accountability in the near term is to establish the
desired relationships for this division as the largest customer of
the "core" FMCG division.
A smaller Group Executive board has been established and will be
accountable for overall Company strategy, business review and
Group-wide policy.
In terms of Executive Board roles and responsibilities, Barry
Bloomer takes the new role of Chief Operating Officer with
immediate effect. He retains his responsibilities for all
operations and supply chain activity and for the IT function. He
now adds to this the responsibility for product development,
providing him an entire view of the end-to-end product production
process, from the development of product from marketing briefs, to
manufacturing and distribution to the end customer.
Barry Bloomer relinquishes his responsibilities for UK
Commercial and International sales, affording a flatter management
structure of the FMCG division and for these key parts of the
business to be led directly by the CEO.
Mike Killick's responsibilities remain unchanged though his
title changes to Chief Financial Officer.
Summary and outlook
The overall performance of the business in the first half of
this financial year was disappointing. Our Retail division has seen
a remarkable turnaround over the past few years and we are proud of
this achievement. Our FMCG division has hitherto demonstrated
strong and consistent growth over many years, led by outstanding UK
Commercial sales growth. Our strategy has been demonstrably correct
and our previous results have evidenced this. It is in this context
that we look back on recent events.
The Thorntons brand remains strong and is growing further in the
eyes of our consumers. This setback in our UK Commercial sales is a
reflection of a short-term issue in our new warehouse and of
business relationships with two of our grocery partners. We
continue to invest in developing our commercial sales capability
and category management skills and our planned investment in
systems, logistics and manufacturing capability to meet the needs
of our customers. We understand the issues that we have recently
faced and are confident that the actions we are taking and plan to
take will go far in addressing them. Last autumn, in setting out
our plans for the next three years, we identified the
transformation of our core business to an FMCG focus as our biggest
challenge. We are taking the first essential steps towards this
goal and remain confident that this objective is the correct
one.
The performance of our business in the first half was not as we
planned; nevertheless it demonstrates management's agility in
controlling and managing costs and activities. As we continue with
the transformation of the business, so we seek further
efficiencies. We have restructured executive responsibilities and
have embarked upon the next phase of our organisation review.
Whilst we continue to invest in the people, systems, insights and
manufacturing assets needed to support our transformation, we
anticipate that this process will deliver meaningful
cost-efficiencies in the next financial year, albeit with some
associated one-off costs of change.
The difficult trading conditions in our UK Commercial sales have
persisted into the second half. Ahead of our key spring seasons, we
continue to be cautious in our expectations for the full year. We
maintain strict control of costs and production and remain
confident of our strategy. We are well positioned to take advantage
of an improvement in consumer spending.
We are confident that during 2015, by accelerating our
transformation and adopting a clearly articulated shopper and
category-led approach, we can re-establish the previously positive
sales trajectory in our UK Commercial sales channel.
There is still much to do in delivering to our vision for the
future of Thorntons. On behalf of the Board I would like to thank
everyone who continues to contribute to our transformation: our
hard-working and passionate colleagues, loyal franchisees,
commercial partners and suppliers.
On behalf of the Board
Jonathan Hart
Chief Executive Officer
27 February 2015
Consolidated income statement
28 weeks ended 10 January 2015
Unaudited 28 weeks ended Unaudited 28 weeks ended Audited 52 weeks ended
10 January 2015 11 January 2014 28 June 2014
Note GBP'000 GBP'000 GBP'000
------------------- ------ -------------------------- -------------------------- ------------------------
Revenue 6 128,236 139,746 222,437
Cost of sales (74,452) (81,702) (125,249)
---------------------- ------ -------------------------- -------------------------- ------------------------
Gross profit 53,784 58,044 97,188
Operating expenses
- operating
expenses before
exceptional items (46,120) (50,079) (88,400)
- exceptional
items 7 - (988) (1,367)
-------------------- ------ -------------------------- -------------------------- ------------------------
Total operating
expenses (46,120) (51,067) (89,767)
-------------------- ------ -------------------------- -------------------------- ------------------------
Other operating
income 591 651 1,216
-------------------- ------ -------------------------- -------------------------- ------------------------
Operating profit
- operating profit
before exceptional
items 8,255 8,616 10,004
- exceptional
items 7 - (988) (1,367)
-------------------- ------ -------------------------- -------------------------- ------------------------
Total operating
profit 6 8,255 7,628 8,637
-------------------- ------ -------------------------- -------------------------- ------------------------
Net finance costs
- net finance costs
before exceptional
items (1,706) (1,435) (2,493)
- exceptional
items - - (176)
-------------------- ------ -------------------------- ------------------------
Net finance costs (1,706) (1,435) (2,669)
-------------------- ------ -------------------------- -------------------------- ------------------------
Profit before
taxation
- profit before
taxation and
exceptional items 6,549 7,181 7,511
- exceptional
items 7 - (988) (1,543)
-------------------- ------ -------------------------- -------------------------- ------------------------
Total profit before
taxation 6,549 6,193 5,968
-------------------- ------ -------------------------- -------------------------- ------------------------
Taxation
- taxation before
exceptional items (1,706) (1,070) (909)
- exceptional
items 7 - 98 213
-------------------- ------ -------------------------- -------------------------- ------------------------
Total taxation 8 (1,706) (972) (696)
---------------------- ------ -------------------------- -------------------------- ------------------------
Profit attributable
to owners of the
parent
- profit attributable to
owners of the parent before
exceptional items 4,843 6,111 6,602
- exceptional
items 7 - (890) (1,330)
Total profit
attributable to
owners of the parent 4,843 5,221 5,272
---------------------- ------ -------------------------- -------------------------- ------------------------
Earnings per share
Basic 9 7.2p 7.8p 7.8p
Diluted 9 6.5p 7.1p 7.1p
---------------------- ------ -------------------------- -------------------------- ------------------------
All activities in both the current and previous periods relate
to continuing operations.
The notes below form an integral part of this condensed set of
financial statements.
Consolidated statement of comprehensive income
28 weeks ended 10 January 2015
Unaudited 28 weeks Audited 52 weeks
Unaudited 28 weeks ended 11 ended 28
ended 10 January 2015 January 2014 June 2014
GBP'000 GBP'000 GBP'000
------------------------------ ----------------------- ------------------------ -----------------------
Profit for the period 4,843 5,221 5,272
------------------------------- ----------------------- ------------------------ -----------------------
Other comprehensive
(expense)/income:
- actuarial loss recognised in
the defined benefit pension
scheme (9,472) (6,699) (6,710)
- movement of deferred tax on
pension liability 1,894 1,417 700
Total other comprehensive
expense (7,578) (5,282) (6,010)
-------------------------------- ----------------------- ------------------------ -----------------------
Total comprehensive expense for
the financial period
attributable to owners of the
parent (2,735) (61) (738)
---------------------------------- ----------------------- ------------------------ -----------------------
The above items of other comprehensive income are not expected
to be subsequently reclassified to profit and loss.
The notes below form an integral part of this condensed set of
financial statements.
Consolidated statement of changes in equity
28 weeks ended 10 January 2015
Accumulated losses Total
Ordinary shares Share premium restated* restated*
GBP'000 GBP'000 GBP'000 GBP'000
At 29 June 2013 6,837 13,768 (2,326) 18,279
------------------------- -------------------- -------------------- ------------------------- --------------------
Restatement of stock - - (1,243) (1,243)
Effect of tax on the
above - - 295 295
At 29 June 2013 restated 6,837 13,768 (3,274) 17,331
------------------------- -------------------- -------------------- ------------------------- --------------------
Profit for the period - - 5,221 5,221
Other comprehensive
expense - - (5,282) (5,282)
------------------------- -------------------- -------------------- ------------------------- --------------------
Total comprehensive
expense for the 28
weeks ended 11 January
2014 - - (61) (61)
------------------------- -------------------- -------------------- ------------------------- --------------------
Transactions with
owners:
- new share capital
issued 6 48 - 54
- share-based payment
charge - - 116 116
- effect of tax on
share option movement - - 319 319
At 11 January 2014 6,843 13,816 (2,900) 17,759
------------------------- -------------------- -------------------- ------------------------- --------------------
At 29 June 2013 6,837 13,768 (2,326) 18,279
------------------------- -------------------- -------------------- ------------------------- --------------------
Restatement of stock - - (1,243) (1,243)
Effect of tax on the
above - - 295 295
At 29 June 2013 restated 6,837 13,768 (3,274) 17,331
------------------------- -------------------- -------------------- ------------------------- --------------------
Profit for the period - - 5,272 5,272
Other comprehensive
expense - - (6,010) (6,010)
------------------------- -------------------- -------------------- ------------------------- --------------------
Total comprehensive
expense for the 52
weeks ended 29 June
2013 - - (738) (738)
------------------------- -------------------- -------------------- ------------------------- --------------------
Transactions with
owners:
- new share capital
issued 25 264 - 289
- share-based payment
charge - - 297 297
- effect of tax on
share option movement - - 241 241
At 28 June 2014 6,862 14,032 (3,474) 17,420
------------------------- -------------------- -------------------- ------------------------- --------------------
At 28 June 2014 6,862 14,032 (3,474) 17,420
------------------------- -------------------- -------------------- ------------------------- --------------------
Profit for the period - - 4,843 4,843
Other comprehensive
expense:
- actuarial loss - - (9,472) (9,472)
- movement of deferred
tax on pension
liability - - 1,894 1,894
Other comprehensive
expense - - (7,578) (7,578)
------------------------- -------------------- -------------------- ------------------------- --------------------
Total comprehensive
expense for the 28
weeks ended 10 January
2015 - - (2,735) (2,735)
------------------------- -------------------- -------------------- ------------------------- --------------------
Transactions with
owners:
- new share capital
issued 22 50 - 72
- share-based payment
charge - - 5 5
- effect of tax on - - - -
share option movement
At 10 January 2015 6,884 14,082 (6,204) 14,762
------------------------- -------------------- -------------------- ------------------------- --------------------
* Reported balances at 11 January 2014 and 28 June 2014 have
been restated; see note 5 for details.
The notes below form an integral part of this condensed set of
financial statements.
Consolidated balance sheet
as at 10 January 2015
Unaudited 10 January Unaudited 11 January Audited 28 June 2014
2015 2014 restated* restated*
Note GBP'000 GBP'000 GBP'000
Assets
Non-current assets
Intangible assets 10 2,168 1,262 1,789
Property, plant and
equipment 11 45,749 43,202 43,400
Deferred tax assets 4,498 3,104 2,816
52,415 47,568 48,005
------------------------- ----- ------------------------- ------------------------ -------------------------
Current assets
Inventories 42,954 34,506 47,573
Trade and other
receivables 39,241 35,849 21,724
Cash and cash equivalents 13b 4,039 2,350 1,085
86,234 72,705 70,382
------------------------- ----- ------------------------- ------------------------ -------------------------
Total assets 138,649 120,273 118,387
--------------------------- ----- ------------------------- ------------------------ -------------------------
Equity and liabilities
Equity attributable to
owners of the parent
Ordinary shares 6,884 6,843 6,862
Share premium 14,082 13,816 14,032
Accumulated losses (6,204) (2,900) (3,474)
Total equity 14,762 17,759 17,420
--------------------------- ----- ------------------------- ------------------------ -------------------------
Liabilities
Non-current liabilities
Borrowings 961 502 1,366
Retirement benefit
obligations 12 36,672 28,311 27,659
Provisions for
liabilities 1,411 1,957 1,908
Other non-current
liabilities 1,873 2,042 1,934
40,917 32,812 32,867
------------------------- ----- ------------------------- ------------------------ -------------------------
Current liabilities
Trade and other payables 47,041 46,147 34,297
Borrowings 33,871 21,617 32,663
Current tax liabilities 986 842 129
Provisions for
liabilities 1,072 1,096 1,011
82,970 69,702 68,100
------------------------- ----- ------------------------- ------------------------ -------------------------
Total liabilities 123,887 102,514 100,967
--------------------------- ----- ------------------------- ------------------------ -------------------------
Total equity and
liabilities 138,649 120,273 118,387
-------------------------- ----- ------------------------- ------------------------ -------------------------
* Reported balances at 11 January 2014 and 28 June 2014 have
been restated; see note 5 for details.
The notes below form an integral part of this condensed set of
financial statements.
Consolidated statement of cash flows
28 weeks ended 10 January 2015
Unaudited 28 weeks Unaudited 28 weeks Audited 52 weeks
ended 10 January 2015 ended 11 January 2014 ended 11 January 2014
Note GBP'000 GBP'000 GBP'000
--------------------- ----- ------------------------ -------------------------- -------------------------
Cash flows from
operating activities
Cash generated from
operations 13a 10,742 13,010 4,572
Corporate taxation
paid (638) (464) (1,410)
Net cash generated
from operating
activities 10,104 12,546 3,162
----------------------- ----- ------------------------ -------------------------- -------------------------
Cash flows from
investing activities
Proceeds from sale of
property, plant and
equipment 43 - 4
Purchase of property,
plant and equipment (6,153) (4,005) (6,164)
Net cash used in
investing activities (6,110) (4,005) (6,160)
----------------------- ----- ------------------------ -------------------------- -------------------------
Cash flows from
financing activities
Net proceeds from
issue of ordinary
shares 72 54 289
Interest paid (1,915) (831) (1,315)
Capital element of
finance lease
repayments (497) (664) (1,041)
Borrowings
advanced/(repaid) 1,300 (7,300) 3,600
Net cash used in
financing activities (1,040) (8,741) 1,533
----------------------- ----- ------------------------ -------------------------- -------------------------
Net increase/(decrease)
in cash and cash
equivalents 2,954 (200) (1,465)
Cash and cash
equivalents at
beginning of period 1,085 2,550 2,550
------------------------ ----- ------------------------ -------------------------- -------------------------
Cash and cash
equivalents at end of
period 13b 4,039 2,350 1,085
----------------------- ----- ------------------------ -------------------------- -------------------------
The notes below form an integral part of this condensed set of
financial statements.
Notes to the half-year financial statements
1 General information
Thorntons PLC ("the Company") is a company incorporated and
domiciled in the UK and is listed on the London Stock Exchange. The
address of the Company's registered office is Thornton Park,
Somercotes, Derbyshire DE55 4XJ.
The principal activities of the Company and its subsidiaries
during the period were the manufacturing, retailing and
distribution of high-quality confectionery and other sweet
foods.
The condensed and consolidated set of half-yearly financial
statements ("the financial statements") for the 28 weeks ended 10
January 2015 was approved by the Directors on 27 February 2015.
These financial statements do not comprise statutory accounts
within the meaning of Section 434 of the Companies Act 2006. The
financial information contained in this set of financial statements
in respect of the 52 weeks ended 28 June 2014 has been extracted
from the Annual Report and Accounts, which were approved by the
Board of Directors on 9 September 2014 and delivered to the
Registrar of Companies. The report of the auditors on those
accounts was unqualified, did not contain an emphasis of matter
paragraph and did not contain any statement under Section 498 of
the Companies Act 2006.
The half-year results for the current and comparative periods
are unaudited. The auditors have carried out a review of these
financial statements for the 28 weeks ended 10 January 2015 and
their report is set out below.
2 Basis of preparation
This condensed set of financial statements for the 28 weeks
ended 10 January 2015 has been prepared in accordance with the
Disclosure and Transparency Rules of the Financial Conduct
Authority and with IAS 34 'Interim financial reporting' as adopted
by the European Union ("EU"). This condensed set of financial
statements should be read in conjunction with the annual financial
statements for the 52 weeks ended 28 June 2014, which have been
prepared in accordance with International Financial Reporting
Standards ("IFRS") as adopted by the EU and on a going concern
basis.
3 Accounting policies and risk
The accounting policies adopted are consistent with those of the
annual financial statements for the year ended 28 June 2014 as
described in those annual financial statements.
Financial risk management and financial instruments
The Group's activities expose it to a variety of financial
risks: market risk (including currency risk, fair value interest
rate risk, cash flow interest rate risk and price risk), credit
risk and liquidity risk.
The financial statements do not include all the financial risk
management information and disclosures required in the annual
financial statements; they should be read in conjunction with the
Group's annual financial statements as at 28 June 2014. There have
been no changes in the risk management department or in any risk
management policies since the year end.
4 Estimates
The preparation of half-yearly financial statements requires
management to make judgements, estimates and assumptions that
affect the application of accounting policies and the reported
amounts of assets and liabilities, income and expense. Actual
results may differ from these estimates.
In preparing these condensed half-year financial statements, the
significant judgements made by management in applying the Group's
accounting policies and the key sources of estimation uncertainty
were the same as those that applied to the consolidated financial
statements for the period ended 10 January 2015, with the exception
of changes in estimates that are required in determining the
provision for income taxes and disclosure of exceptional items.
5 Restatements
Following a review of overheads included within the valuation of
inventory, it was identified that historically, a net GBP1.2
million of costs had been capitalised which do not meet the
definition under IAS 2 'Inventories'. The prior year comparatives
have been restated to correct for this error.
The effect of this restatement has been to reduce, for the prior
period, the opening inventory valuation by a net GBP1.2 million. As
this error arose in previous periods, there is no material impact
on the income statement of any periods reported in these financial
statements. There is also no impact on other comprehensive income,
earnings per share or the cash flow statement as a result of this
restatement.
The restatement has been made in accordance with IAS 8,
'Accounting Policies, Changes in Accounting Estimates and Errors'.
The effect of the restatement to the financial statements including
the related impact on taxation is summarised in the table
below:
28 weeks ended 11 28 weeks ended 11 28 weeks ended 11 28 weeks ended 11
January 2014 January 2014 January 2014 January 2014
Reported Restated Movement Reported Restated Movement
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
------------- ------------------ ------------------- ----------------------- ------------------- ------------------- -----------------------
Profit before
tax 6,193 6193 - 5,968 5968 -
-------------- ------------------ ------------------- ----------------------- ------------------- ------------------- -----------------------
Inventory 35,749 34,506 (1,243) 48,816 47,573 (1,243)
Current tax
liabilities 1,137 842 (295) 424 129 295
Accumulated
losses (1,952) (2,900) (948) (2,526) (3,474) 948
-------------- ------------------ ------------------- ----------------------- ------------------- ------------------- -----------------------
6 Segmental reporting
The Executive Directors, considered to be the Chief Operating
Decision Maker, review the Group's internal reporting in order to
assess performance and allocate resources. The operating segments
of the Group have been determined on this basis.
All revenue arises from UK operations to external customers and
therefore the Executive does not consider the business from a
geographic perspective, only an operational one. Two reportable
segments, the "Retail" division, which incorporates Own Stores,
Franchise and Consumer Direct, and the "FMCG" division,
encompassing the UK Commercial and international trading channels
and manufacturing operations, have been identified. This latter
segment has previously been referred to as "Sales & Operations"
("S&O"). One Commercial customer represents greater than 10% of
Group revenue, with revenue in the period of GBP13.3 million (2014:
GBP19.6 million).
The Executive assesses the performance of the operating segments
based on a measure of earnings before interest and tax ("EBIT",
equivalent to operating profit). Costs specific to Head Office and
finance costs are not included in the result for each operating
segment as these costs are not managed on a segmented basis.
Total segment assets exclude IT assets, non-trade receivables
and cash and cash equivalents as these are managed centrally.
Assets are located in the UK.
Unaudited Unaudited Audited
28 weeks 28 weeks 52
ended 10 ended 11 weeks ended
January January 28
2015 2014 June 2014
---------------------- ------------------------------------------- ------------------- -------------------- -------------------------------------------------- -------------------- --------------------- -------------------------------------------------- --------------------
Retail FMCG Central Total Retail FMCG Central Total Retail FMCG Central Total
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
--------------- ---------------------- -------------------- --------------------- ------------------- -------------------- ------------------------ ------------------------ -------------------- --------------------- ------------------------ ------------------------ --------------------
Total revenue 65,519 62,717 - 128,236 69,149 70,597 - 139,746 111,396 111,041 - 222,437
---------------- ---------------------- -------------------- --------------------- ------------------- -------------------- ------------------------ ------------------------ -------------------- --------------------- ------------------------ ------------------------ --------------------
Depreciation
and
amortisation* 820 1,811 586 3,217 898 2,396 636 3,930 1,681 4,069 1,104 6,854
---------------- ---------------------- -------------------- --------------------- ------------------- -------------------- ------------------------ ------------------------ -------------------- --------------------- ------------------------ ------------------------ --------------------
Segment
operating
profit 5,821 10,333 - 16,154 4,967 12,783 - 17,750 4,220 22,147 - 26,367
Head Office
costs (7,899) (9,134) (16,363)
Exceptional
items - - - - (988) - - (988) (1,167) - (200) (1,367)
---------------- ---------------------- -------------------- --------------------- ------------------- -------------------- ------------------------ ------------------------ -------------------- --------------------- ------------------------ ------------------------ --------------------
Operating
profit 8,255 7,628 8,637
Net finance
costs (1,706) (1,435) (2,669)
Profit before
taxation 6,549 6,193 5,968
---------------- ---------------------- -------------------- --------------------- ------------------- -------------------- ------------------------ ------------------------ -------------------- --------------------- ------------------------ ------------------------ --------------------
Additions
to non-current
assets (other
than deferred
tax assets) 1,081 3,824 1,048 5,953 1,638 1,767 521 3,926 2,432 3,677 1,554 7,663
Total assets** 14,535 110,815 13,299 138,649 14,526 96,320 9,427 120,273 12,180 98,227 7,980 118,387
---------------- ---------------------- -------------------- --------------------- ------------------- -------------------- ------------------------ ------------------------ -------------------- --------------------- ------------------------ ------------------------ --------------------
* Excluding exceptional impairment
** Reported balances at 11 January 2014 and 28 June 2014 have
been restated; see note 5 for details
7 Exceptional items
Unaudited 28 weeks ended Unaudited 28 weeks ended Audited 52 weeks ended
10 January 2015 11 January 2014 28 June 2014
GBP'000 GBP'000 GBP'000
Impairment and onerous
lease charges - 988 1,167
Refinancing costs - - 376
Total exceptional items - 988 1,543
-------------------------- --------------------------- -------------------------- -------------------------
Tax charge attributable to
exceptional items - (98) (213)
Total exceptional items
after tax - 890 1,330
--------------------------- --------------------------- -------------------------- -------------------------
Impairment and onerous lease charges
As a result of the performance of Retail Own Stores, impairment
and onerous lease charges have been required in prior years. An
onerous lease provision is made in respect of stores for which
projected discounted cash flows inclusive of attributable overheads
are insufficient to cover property costs up to the lease expiry
date, held at the level of the projected shortfall. Additionally,
where these discounted cash flows fall below the net book value of
store assets, an impairment provision is made.
Refinancing
A new agreement with the Group's existing lenders was completed
and signed in July 2014. This agreement runs to October 2018. The
exceptional costs in the prior year are the associated professional
fees, shown in Operating expenses on the Income statement, and the
write-off of remaining unamortised arrangement fees for the
previous facility, shown in Finance costs.
8 Taxation
Legislation to reduce the rate of corporation tax from 23% to
20% was included in the Finance Act 2013. As it had been
substantively enacted at the balance sheet date, the Company's
profits for this accounting period are taxed at an effective rate
of 20.75% and will be taxed at 20% in the future. There have been
no further indications of any changes in the rate of corporation
tax.
The tax charge for the 28 weeks ended 10 January 2015 is based
on a full year overall expected effective tax rate of 22.8% (full
year 2014: 23.8%). The charge for the period is lower than this
expected rate, primarily due to the impact of the remeasurement of
deferred tax balances for the above.
The current year rate has been calculated by reference to the
projected charge for the full year ending 27 June 2015 and reflects
the mainstream corporation tax rate of 20.75%. The ordinary tax
charge exceeds the charge based on these statutory rates,
principally due to depreciation on owned assets not qualifying for
capital allowances and other permanently disallowable items.
9 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 outstanding during the period, excluding
those held in the employee share trust which are treated as
cancelled.
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. Dilutive potential ordinary
shares are those share options granted to employees where the
exercise price is less than the average market price of the
Company's ordinary shares during the period.
Reconciliations of the earnings and weighted average number of
shares used in the calculations are set out below:
9 Earnings per share (continued)
Unaudited 28 weeks Unaudited 28 weeks Audited 52 weeks
ended 10 January ended 11 January ended 28 June 2014
2015 2014
---------------------------------------------------------- --------------------------------------------------------------------------------- ------------------------------------------------------------------------------
Basic Diluted Basic Diluted Basic Diluted
earnings earnings earnings earnings earnings earnings
per per per per per per
Earnings share share Earnings share share Earnings share share
GBP'000 GBP'000 GBP'000
-------------- ------------------ ------------------ ------------------ ------------------------- -------------------------- -------------------------- ----------------------- ------------------------- --------------------------
Profit before
exceptional
items 4,843 7.2p 6.5p 6,111 9.1p 8.3p 6,602 9.8p 8.9p
Effect of
exceptional
items - - - (890) (1.3)p (1.2)p (1,330) (2.0)p (1.8)p
Profit
attributable
to owners of
the
parent 4,843 7.2p 6.5p 5,221 7.8p 7.1p 5,272 7.8p 7.1p
----------------- ------------------ ------------------ ------------------ ------------------------- -------------------------- -------------------------- ----------------------- ------------------------- --------------------------
Audited
Unaudited Unaudited 52
28 weeks 28 weeks weeks
ended ended ended
10 January 11 January 28 June
2015 2014 2014
-------------- ------------------ ------------------ ------------------ ------------------------- -------------------------- -------------------------- ----------------------- ------------------------- --------------------------
Weighted average
number of
ordinary
shares 67,279,391 66,957,509 67,053,102
Dilutive effect
of shares from
share options 7,543,648 6,541,612 7,155,508
Full diluted weighted average
number of ordinary shares 74,823,039 73,499,121 74,208,610
--------------------------------------------------------- ------------------ ------------------------- -------------------------- -------------------------- ----------------------- ------------------------- --------------------------
10 Intangible assets
Unaudited
computer software
GBP'000
Cost
At 28 June 2014 29,295
Additions at cost 784
Disposals -
At 10 January 2015 30,079
------------------------------------- --------------------------
Accumulated amortisation
At 28 June 2014 27,506
Charge for the period 405
Disposals -
At 10 January 2015 27,911
Net book amount at 10 January 2015 2,168
-------------------------------------- --------------------------
Net book amount at 28 June 2014 1,789
-------------------------------------- --------------------------
11 Property, plant and equipment
Unaudited
property, plant
and equipment
GBP'000
Cost
At 28 June 2014 179,243
Additions at cost 5,169
Disposals (2,356)
At 10 January 2015 182,056
------------------------------------- ----------------------
Accumulated amortisation
At 28 June 2014 135,843
Charge for the period 2,812
Disposals (2,348)
At 10 January 2015 136,307
Net book amount at 10 January 2015 45,749
-------------------------------------- ----------------------
Net book amount at 28 June 2014 43,400
-------------------------------------- ----------------------
No impairment charge for the period has been recognised within
the depreciation charge for the period (2014: GBP552,000).
In addition to the above, at the period end date there were
contracts placed for future capital expenditure not provided in the
financial statements of GBP2,239,000 (2014: nil).
12 Retirement benefit obligations
The valuation of the Thorntons' Pension Scheme ("the Scheme") at
28 June 2014 has been updated on an actuarial basis applying
current discount and inflation rate assumptions and incorporating
the valuation of the plan assets at 10 January 2015 and payments
made into the scheme during the period.
In August 2012, and as part of the Schedule of Contributions
agreed with the Trustees to the Scheme, it was agreed that, in
addition to an annual deficit contribution of GBP2.75 million, the
Company would make an additional contribution over each of the next
three financial years equivalent to the higher of either:
-- a third of any reduction in the net debt excluding VAT
creditors for the years ending June 2013, 2014 and 2015; or
-- the amount of dividends paid to shareholders above the level of GBP1.5 million.
13 Cash flow from operating activities
a) Cash generated from operations
Unaudited 28 weeks ended Unaudited 28 weeks ended Audited 52 weeks ended
10 January 2015 11 January 2014 28 June 2014
GBP'000 GBP'000 GBP'000
------------------------- ------------------------- ------------------------- -------------------------
Continuing operations
Operating profit 8,255 7,628 8,637
Adjustments for:
- depreciation and
amortisation 3,217 4,482 7,450
- amortisation of
Government grants
received (10) (10) (20)
- (profit)/loss on
disposal of property,
plant and equipment (35) 40 80
- share-based payment
charge 5 116 297
-------------------------- ------------------------- ------------------------- -------------------------
Operating cash flow before
working capital movements 11,432 12,256 16,444
Changes in working
capital
Decrease/(increase) in
inventories 4,619 3,241 (9,826)
Increase in trade and
other receivables (16,749) (17,373) (3,445)
Increase in trade and
other payables 12,958 16,353 4,231
(Decrease)/increase in
provisions (437) 187 (42)
Increase in post-employment
benefit obligations (1,081) (1,654) (2,790)
---------------------------- ------------------------- ------------------------- -------------------------
Cash generated from
operations 10,742 13,010 4,572
--------------------------- ------------------------- ------------------------- -------------------------
b) Cash and cash equivalents for the statement of cash flows
Unaudited Unaudited
28 weeks ended 28 weeks ended Audited 52
10 January 11 January weeks ended
2015 2014 28 June 2014
GBP'000 GBP'000 GBP'000
--------------------------- --------------------- --------------------- ---------------------
Cash and cash equivalents
at end of period 4,039 2,350 1,085
----------------------------- --------------------- --------------------- ---------------------
14 Reconciliation of movement in net debt
Unaudited 28 weeks ended Unaudited 28 weeks ended Audited 52 weeks ended
10 January 2015 11 January 2014 28 June 2014
GBP'000 GBP'000 GBP'000
------------------------ -------------------------- -------------------------- ------------------------
Increase/(decrease) in
cash and cash equivalents 2,954 (200) (1,465)
Cash flows from
(decrease)/increase in
debt (803) 7,964 (2,559)
-------------------------- -------------------------- -------------------------- ------------------------
Movement in net debt in
the period 2,151 7,764 (4,024)
Inception of new finance
leases - - (1,387)
Net debt at beginning of
period (32,944) (27,533) (27,533)
--------------------------
Net debt at end of
period (30,793) (19,769) (32,944)
------------------------- -------------------------- -------------------------- ------------------------
15 Related-party transactions
There are no related-party transactions requiring disclosure in
these financial statements.
16 Seasonality
Sales are subject to seasonal fluctuations, with peak Christmas
demand in the second quarter of the year. In the 52 weeks ended 28
June 2014, the 28 week period to 11 January 2014 represented 63% of
annual sales.
17 Principal risks and uncertainties
Key risks are reviewed by the Executive Directors and Senior
Management. The assessment of risks on the basis of likelihood and
potential impact, together with the controls and actions to manage
or mitigate them, are reviewed by the Audit Committee and Board.
The key risks and uncertainties facing the business are considered
to be as follows:
-- economic and industry risks;
-- operational risks; and
-- people risks.
These risks and uncertainties are unchanged from those as at 28
June 2014, and further details on them are set out in our 2014
Annual Report and Accounts. This is available on our website at
investors.thorntons.co.uk.
Statement of Directors' responsibility
The Directors confirm that these condensed half-yearly financial
statements have been prepared in accordance with International
Accounting Standard 34, 'Interim financial reporting', as adopted
by the European Union and that the half-yearly management report
includes a fair review of the information required by DTR 4.2.7 and
DTR 4.2.8, namely:
-- an indication of important events that have occurred during
the first six months and their impact on the condensed set of
financial statements and a description of the principal risks and
uncertainties for the remaining six months of the financial year;
and
-- material related-party transactions in the first six months
and any material changes in the related-party transactions
described in the last Annual Report.
The Directors of Thorntons PLC are listed in the Thorntons PLC
Annual Report and Accounts 2014.
A list of current Directors is maintained on the Thorntons PLC
website: www.thorntons.co.uk.
On behalf of the Board
Jonathan Hart Mike Killick
Chief Executive Officer Chief Financial Officer
27 February 2015
This document contains certain statements that are
forward-looking statements. They appear in a number of places
throughout this document and include statements regarding our
intentions, beliefs or current expectations and those of our
officers, Directors and employees concerning, amongst other things,
our results of operations, financial condition, liquidity,
prospects, growth, strategies and the business we operate. By their
nature, these statements involve uncertainty since future events
and circumstances can cause results and developments to differ
materially from those anticipated. The forward-looking statements
reflect knowledge and information available at the date of
preparation of this document and, unless otherwise required by
applicable law, the Company undertakes no obligation to update or
revise these forward-looking statements. Nothing in this document
should be construed as a profit forecast. The Company and its
Directors accept no liability to third parties in respect of this
document save as would arise under English law.
Independent review report to Thorntons PLC
Report on the half-year financial statements
Our conclusion
"We have reviewed the half-year financial statements, defined
below, in the Half-yearly Report of Thorntons PLC for the 28 weeks
ended 10 January 2015. Based on our review, nothing has come to our
attention that causes us to believe that the half-year financial
statements are not prepared, in all material respects, in
accordance with International Accounting Standard 34 as adopted by
the European Union and the Disclosure and Transparency Rules of the
United Kingdom's Financial Conduct Authority.
This conclusion is to be read in the context of what we say in
the remainder of this report. "
What we have reviewed
The half-year financial statements, which are prepared by
Thorntons PLC, comprise:
-- the consolidated statement of financial position as at 10 January 2015;
-- the consolidated income statement and consolidated statement
of comprehensive income for the period then ended;
-- the consolidated statement of cash flows for the period then ended;
-- the consolidated statement of changes in equity for the period then ended; and
-- the explanatory notes to the half-year financial statements.
As disclosed in note 2, the financial reporting framework that
has been applied in the preparation of the full annual financial
statements of the group is applicable law and International
Financial Reporting Standards (IFRSs) as adopted by the European
Union.
The half-year financial statements included in the Half-yearly
Report have been prepared in accordance with International
Accounting Standard 34, 'Interim Financial Reporting', as adopted
by the European Union and the Disclosure and Transparency Rules of
the United Kingdom's Financial Conduct Authority.
What a review of half-year financial statements involves
We conducted our review in accordance with International
Standard on Review Engagements (UK and Ireland) 2410, 'Review of
Interim Financial Information Performed by the Independent Auditor
of the Entity' issued by the Auditing Practices Board for use in
the United Kingdom. A review of interim financial information
consists of making enquiries, primarily of persons responsible for
financial and accounting matters, and applying analytical and other
review procedures.
A review is substantially less in scope than an audit conducted
in accordance with International Standards on Auditing (UK and
Ireland) and, consequently, does not enable us to obtain assurance
that we would become aware of all significant matters that might be
identified in an audit. Accordingly, we do not express an audit
opinion.
We have read the other information contained in the Half-yearly
Report and considered whether it contains any apparent
misstatements or material inconsistencies with the information in
the half-year financial statements.
Responsibilities for the half-year financial statements and the
review
Our responsibilities and those of the directors
The Half-yearly Report, including the half-year financial
statements, is the responsibility of, and has been approved by, the
directors. The directors are responsible for preparing the
Half-yearly Report in accordance with the Disclosure and
Transparency Rules of the United Kingdom's Financial Conduct
Authority.
Our responsibility is to express to the company a conclusion on
the half-year financial statements in the Half-yearly Report based
on our review. This report, including the conclusion, has been
prepared for and only for the company for the purpose of complying
with the Disclosure and Transparency Rules of the Financial Conduct
Authority and for no other purpose. We do not, in giving this
conclusion, 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.
PricewaterhouseCoopers LLP
Chartered Accountants
Birmingham
27 February 2015
Notes:
(a) The maintenance and integrity of the Thorntons PLC website
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 financial statements since they were
initially presented on the website.
(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 UAOARVUAORUR
Thorntons Plc (LSE:THT)
Historical Stock Chart
From Jun 2024 to Jul 2024
Thorntons Plc (LSE:THT)
Historical Stock Chart
From Jul 2023 to Jul 2024
