RNS No 9298c
THORNTONS PLC
6th October 1998
Announcement of Preliminary Results for
52 weeks ended 27 June 1998 (Audited)
Thorntons, the speciality retailer and manufacturer of high
quality chocolate, toffee, and other confectionery, today
reports its Preliminary Results for the 52 weeks ended 27 June
1998.
Financial highlights
Continuing operations
1998 1997
Turnover #132.8m #109.2m Up 21.6%
Profit before tax and
exceptional items #12.6m #11.5m Up 9.0%
Earnings per share before
exceptionals* 13.80p 11.44p Up 20.6%
Dividend per ordinary share 6.40p 5.85p Up 9.4%
(* excluding the effect of prior year foreign losses)
* Successfully completed two years of five year strategic
plan
* Own shop sales up by 32% to #105.9 million
* Profit before tax increased 9.0% to #12.6 million
* Annual like-for-like sales growth of 9.6%
* 100 new and resited shops opened in the year
* Three major infrastructure projects; the new manufacturing
and packaging facility; the new warehouse and distribution
complex, and the roll-out of EPOS till systems underway and
are on schedule and within budget.
Commenting on prospects, Chairman John Thornton said:
"This year has started satisfactorily with first quarter like-
for-like sales growth of 5.7%".
"The outcome for the year will be influenced, as usual, by our
key seasons which have historically held up well in difficult
market conditions. Due to this, and the initiatives we have
taken to improve the productivity of our business, we remain
confident of a satisfactory outcome for the year as a whole."
CHAIRMANS STATEMENT
We are pleased to report a second year of progress towards our
strategic goals.
This gives us continued confidence in our growth prospects for
the next 3 years as we complete our initial 5 year plan.
Results
Sales from continuing businesses for the year ending 27 June
1998 grew by 21.6% to #132.8 million.
Profit before taxation at #12.6 million grew by 9.0%.
Operating cashflows before working capital movements grew by
22.2% to #22.3 million from #18.3 million last year.
The effective tax rate for the year at 28.7% benefits
primarily from capital allowances on our investment programme.
We would expect similar rates in the coming year.
As a result Earnings per Share were 13.80p an increase of
20.6% from last years level of 11.44p (excluding one-off tax
relief for prior year foreign losses).
This has been a very important year of capital investment to
strengthen our business infrastructure for the future. During
the year we have invested a total of #45.4m on our accelerated
shop opening programme, in developing our EPOS (Electronic
Point of Sale) capabilities and in expanding our Thornton Park
Manufacturing facilities.
It is therefore encouraging that our net year-end gearing at
67.2% and our full-year gross interest cover of nine times
were comfortably within our target minimums.
Your Board is recommending a final dividend of 4.60p net per
share, taking total dividends for the year to 6.40p net per
share, an increase of 9.4%.
Infrastructure Projects
I cannot recall any period in Thorntons long history that has
seen such intense activity in driving through major projects
designed to improve the Companys competitive advantage and
future profit stream.
After a period of thorough evaluation and testing, we are now
rapidly rolling out EPOS tills throughout our retail estate.
The #35 million investment in our Thornton Park chocolate
manufacturing and packing facility announced in last years
report is on budget and ahead of schedule with the first
chocolates packed in September and the transfer from our
Belper packing facility likely to be completed before
Christmas.
In July we announced our decision to bring forward the next
stage of our planned move from our Belper site, the
construction of a new warehouse and distribution complex on
Thornton Park at a capital cost of #14 million. Work has
already started on the new building and we are planning to
commission this important new facility after Easter 1999.
Financing
We anticipate that borrowings resulting from this simultaneous
investment programme in manufacturing, distribution and retail
facilities will peak in 1999.
Due to the highly cash generative nature of our ongoing
business, we still believe that medium-term borrowings are the
most appropriate method of funding these investments and have
put the necessary loan facilities in place with a combination
of our UK banks and a US unsecured loan note placement.
The commissioning of a new warehousing and distribution centre
was part of our long-term investment plans when we arranged
our loan facilities. The decision to accelerate this
investment brings our peak gearing forward a year. We will
therefore, now be targeting to contain year-end gearing this
year to a maximum of 95% with gross interest cover of at least
three times.
People
This past year has been an exceptionally busy period in
Thorntons history with 100 new shops opened, 132 new products
launched and 3 major infrastructure projects started. It is a
source of enormous pride to me that our people have responded
so energetically and enthusiastically to these challenges and
I would like to take this opportunity to thank everyone
personally for their hard work and teamwork over the past
year!
Board
Jonathan Fellows resigned as Director of Finance on 31 August
1998 to take up a position as Director of Finance of Bon
Marchi - an unquoted womenswear retailer. We would like to
extend our thanks to him for his contribution to Thorntons
during his time with the Company and wish him well with his
new position. The recruitment of Jonathans successor is in
progress.
Outlook
We have progressed a long way in the last 2 years with 185 new
and resited shops opened to an increasingly successful
formula. We still have 250 new and resited shops to open in
the next 3 years to the same formula. This gives us
continuing confidence that we can maintain strong sales growth
momentum throughout this period.
The year ahead is another very challenging one for the
Company. We intend to maintain the pace of retail expansion
with between 70-80 new shop openings. At the same time we
intend to complete the 3 major infrastructure investments
within budget and to timetable.
This year has started satisfactorily with first quarter like-
for-like sales growth of 5.7%.
Whilst encouraged by the continued positive customer response
to our new shops and new products, we are mindful of the more
unsettled economic climate. Our plans for the year ahead are
therefore based on more conservative like-for-like growth
expectations.
The outcome for the year will, as usual, be influenced by our
key seasons, which have historically held up well in difficult
market conditions. Due to this, and the initiatives we have
taken to improve the productivity of our business, we remain
confident of a satisfactory outcome for the year as a whole.
We look forward to updating our shareholders on our progress
on all fronts in March with our interim results announcement.
John Thornton
Chairman
5 October 1998
CHIEF EXECUTIVES REVIEW
1997/98 RESULTS
Whilst everyone within the Thorntons business has been excited
by our excellent 21.6% sales growth this year and the
continued progress made towards our strategic objectives, we
are disappointed that our profit performance - at 9% growth -
fell short of the internal targets we set ourselves.
We have always planned to grow sales faster than profits at
this stage of our strategic plan as we invest in an aggressive
shop-opening programme, our infrastructure projects, our new
business trials and the expansion of our product range.
However we have experienced an "unwelcome" slight margin
erosion in the year as a result of additional warehousing and
distribution costs, together with higher than expected
discounting costs from 15 under-performing new lines.
We are addressing these 2 issues by:-
Firstly accelerating the next stage of our planned move of
warehousing and distribution from our Belper site with the
construction of a new complex on Thornton Park to be available
post-Easter 1999.
Secondly completing the roll-out of EPOS tills and systems to
give us better management control of our sales and inventory
levels by product line.
At the same time our second year of strong sales growth has
confirmed that the strategic plan that we launched in 1996 is
looking more robust than ever as an engine for continued
growth. In particular, as the three major infrastructure
projects are reaching completion we feel increasingly
confident that they will secure appropriate growth in profits
in future years.
Sales
Total sales from continuing businesses, which comprise own
shops, franchise outlets and commercial customers, grew by
20.0% in the second half of the year, taking full year sales
to #132.8 million, an increase of 21.6% compared with the
previous year. Once again, the key driver of the overall
sales growth came from our own shops.
Own shop sales grew by 32.0% in the year to #105.9 million
with annual like-for-like sales growth of 9.6%. Like-for-like
growth slowed in the second half to 6.5%.
Overall own shop sales growth was helped by the acceleration
of the new shop-opening programme, which saw 100 new shops
opened in the year compared with 85 in the previous year and
an average of over 80 in each of the next 3 years.
As expected Franchise sales declined 12.8% to #9.5 million as
a further 51 under-performing franchises were closed during
the year, taking the number trading at 27 June 1998 to 151.
Following the successful results from the 8 "new look"
franchise trials we are now recruiting new partners and have
identified 200 potential locations where this formula can be
replicated. We still anticipate a number of closures as we
continue to reposition our franchise offer.
Sales to Commercial customers rose slightly in the second
half. However, the reduced first half sales meant that, for
the year as a whole, Commercial sales fell by 4.0% to #17.4
million.
Retail
Our retail estate continued to prosper as we completed a
second successful year in our "retail revolution".
Highlights include:-
* The successful launch of 100 new and resited new shops in
the year
* 59 of these were in new locations
* 41 were resited with average sales uplifts achieved of 60%
compared with their previous locations
* Our increasing confidence in our optimum shop footprint of
450 square feet sales space and 16 merchandising bays
* The success of our second shop in Eire with more planned in
the years ahead
* The continued expansion into factory outlet villages with
10 shops now trading and a further 3 opening before Christmas
1998
Further progress was also made in developing our retail
business for the future in a number of important areas.
EPOS
Our new touch-screen EPOS tills have been fully trialled and
we are now aggressively rolling them out to the full retail
estate. They have now been installed in over half our shops
and we plan to have completed the majority of our shops by
Christmas with consequent benefits in service and inventory
levels.
Training
We have launched a comprehensive training programme for all
our shop managers, focusing on six core competencies to
deliver "Chocolate Heaven" in all our shops and are starting
to see an improvement in service levels as measured by our
Mystery Shopper programme.
New Format
We are trialling a new shop image for the year 2000 in eight
shops with some useful indications for future improvements.
1995/96 1996/97 1997/98 2001 Target
Sales per Shop
(#000s) #238 #281 #327 #375
Number of Own
Shops at Year End 269 300 344 507
New Products
This year has seen the largest number of new product
introductions within the scope of our strategic plan.
Continued refreshment of our core ranges has been complimented
by the introduction of a number of new ranges, targeted to
attract new and younger customers to our stores, both during
the key seasons and throughout the year.
In particular, the launch of our new Childrens range,
targeted at children from one to twelve years of age, has
added a new dimension to the Thorntons product offer and is a
key element of our long-term product development strategy.
Incremental sales from our new ranges were over #5.5m during
the year, a major contribution to our retail like-for-like
growth of 9.6%.
In total, 132 new and updated products were introduced during
the last twelve months, of which 15 have been discontinued for
failing to reach an acceptable level of sales. Whilst this is
not a high percentage, it has caused us a disproportionate
margin loss through a lack of timely performance information.
The roll-out of EPOS in the coming year will enable us to
monitor individual product sales more accurately. This
information, combined with a more measured and sustainable
pace of new product activity, will help us focus on
maintaining both sales and profit momentum in the years ahead.
New Business Trials
We will at the same time continue to explore ways of further
developing the Thorntons brand through the four remaining new
business trials initiated in 1997. All four trials have shown
promise as potential future growth vehicles from the Year 2000
onwards but still need evaluating thoroughly prior to
investment decision. We now intend to continue them as trials
for the next 12 months.
In summary:
Cafi Thorntons
With London Regent Street and Bromley cafis opening this
August, we now have 11 cafi trials trading, all exploring
different types of location, cafi format and offer. We intend
to open a further two trials (in a tourist location and in a
factory outlet) in the next few months which will allow us to
explore the potential of the various cafi opportunities for
an evaluation in mid 1999.
Mail Order
Whilst we are increasingly confident that there is significant
consumer demand for a Thorntons mail order offer, we are still
exploring the most cost-effective routes to profitably and
efficiently fulfil this demand.
Sugar Confectionery
Whilst we continue to trial alternative branded offers in a
limited number of shops, we now feel there is better potential
for a Thorntons branded range. We will be launching the first
wave of 20 products in a new "Thorntons Original Sweet Shop"
range this Autumn as part of our investigation of the
opportunity to expand the Thorntons core confectionery offer.
Travel Locations
We have four railway and five airport (landside) trial
locations and are looking to expand this test in airports
(airside) prior to a full evaluation of this opportunity.
The success of our retail expansion strategy has in turn made
investments in supply-chain productivity and capacity
increasingly attractive.
Thornton Park
Our focus in the year has been on project-managing the largest
infrastructure project in Thorntons history to budget and to
timetable - the #35 million investment in chocolate
manufacture and packing at Thornton Park.
We commissioned the new (120,000 square feet) manufacturing
extension, bridge and packing facility a month ahead of
schedule in September and have started to pack chocolates in
volume and to new levels of quality standards. We had
originally targeted to have the new packaging plant fully
operational in early 1999 but now envisage this being achieved
before Christmas 1998 with the final transfer of chocolate
packing from Belper.
Continued investment in new automated production lines in
parallel with this programme is designed to ensure that
Thorntons retains its competitive edge in premium chocolate
manufacture. Highlights include:
* The commissioning of a new high volume enrobing line
* A new high-specification automatic bagging line
* A state-of-the-art chocolate moulding plant
Warehousing and Distribution
Our warehousing and distribution facilities came under
enormous strain supporting our own shop sales growth of 30%,
necessitating extensive use of costly third party storage. We
have therefore decided to bring forward the next stage of our
planned move from our Belper site. Work has already started
on the construction of a new (140,000 square feet) warehouse
and distribution complex at Thornton Park at a capital cost of
#14 million.
This will mean that all chocolate manufacture, packing,
warehousing and distribution will be on the same site, leading
to significant gains in productivity.
Belper
Toffee, fudge and sugar confectionery manufacture will remain
at Belper for the time-being. It is probable in the longer-
term that these will also move to Thornton Park.
World Class Standards
During the past year method improvements have been targeted to
maximise returns to be gained from the new facilities. These
include benchmarking our manufacturing base with best in class
worldwide, and driving to achieve World Class "A" standards
throughout the operation. Inventory record accuracy,
manufacturing schedule performance, supplier delivery
performance and service levels to our Retail estate are all
measures which are at Class "A" levels. This work, and a
drive to achieve similar levels across the whole supply chain,
is designed to ensure that the anticipated productivity gains
can be achieved as early as possible.
Outlook
We expect this year to be both busy and productive.
By the end of it we plan to be in great shape for the 21st
Century and have many years of sustainable and profitable
growth in prospect.
* We will continue our own-shop retail expansion from 344
shops at 27 June 1998 to 507 by mid 2001 with over 250 new and
resited shop openings planned over the next three years
* We will continue to innovate and expand our core chocolate
and confectionery ranges although at a less "break-neck" pace
than last year
* We will continue to experiment with new business trials and
formats to sustain profitable growth beyond the year 2001
* We will continue to challenge ourselves to better ways of
working to maintain our competitive edge and are undertaking a
thorough review of the appropriate structure and cost-base for
the business going forward.
* We will be placing great emphasis across the business on
improving margins, reducing costs and maintaining strong
controls.
* We will complete the three major infrastructure projects in
the year ahead - the Thornton Park manufacturing investment,
the new warehousing and distribution centre and the
installation of EPOS.
We look forward to informing shareholders of the results of
these initiatives, and their implications for shareholder
value, at our next announcements in March and October.
Roger Paffard
Chief Executive
5 October 1998
Thorntons PLC - Consolidated Profit and Loss Account
for 52 weeks ended 27 June 1998
Continuing Continuing Discontinued
operations operations operations Total
1998 1997 1997 1997
Notes #000 #000 #000 #000
Turnover 1 132,779 109,209 2,079 111,288
Cost of sales (63,125) (51,504) (705) (52,209)
-------- -------- ----- --------
Gross profit 69,654 57,705 1,374 59,079
-------- ------- ----- --------
Selling & distribution
costs (46,443) (35,636) (1,564) (37,200)
Administrative expenses (10,687) (11,257) (109) (11,366)
Other operating income 2 363 454 - 454
Provision utilised - - 299 299
-------- ------- ------ -------
Operating profit 12,887 11,266 - 11,266
-------- ------- ------ -------
Exceptional items
Fundamental business
restructuring
- continuing - (768)
Liquidation of
Thorntons NV
- discontinued (9) -
Disposal of Gartner
Pralines
- discontinued - (191)
Disposal of French
operations
- discontinued - (3,584)
Provisions utilised 9 4,543
---------- ---------
- -
---------- ---------
Profit on ordinary
activities before
interest 12,887 11,266
Interest receivable
& similar income 420 411
Interest payable
& similar charges 3 (724) (136)
--------- ---------
Profit on ordinary
activities before
taxation 12,583 11,541
Taxation 4 (3,606) (2,950)
--------- ---------
Profit on ordinary
activities after
taxation 8,977 8,591
Dividends 5 (4,213) (3,796)
----------- ---------
Retained profit
for the period 4,764 4,795
----------- ---------
Earnings per
ordinary share 6 13.80 13.32
Analysed as:
Attributable to
profit before
exceptional items 6 13.80 13.32 - 13.32
Excluding taxation
relief for prior
year foreign
losses 6 13.80 11.44 - 11.44
Dividend per
ordinary share 5 6.40 5.85
Group Balance Sheet
As at As at
27June 1998 28 June 1997
Notes #000 #000
Fixed assets
Tangible assets 86,208 52,033
Investments
- purchase of
own shares 490 835
--------- ---------
86,698 52,868
--------- ---------
Current assets
Stocks 16,866 10,556
Debtors: amounts falling
due after one year 1,353 2,001
Debtors: amounts falling
due within one year 8,734 5,328
Investments - 55
Cash at bank and in hand 11,958 895
--------- ---------
38,911 18,835
Creditors: amounts falling
due within one year 7 (34,322) (26,943)
--------- ---------
Net current assets
/(liabilities) 4,589 (8,108)
--------- ---------
Total assets less
current liabilities 91,287 44,760
Creditors: amounts falling
due after one year 8 (42,674) (416)
Provisions for liabilities
and charges (3,817) (5,901)
--------- ---------
Net assets 44,796 38,443
--------- ---------
Capital and reserves
Share capital 6,601 6,494
Share premium 11,706 10,206
Revaluation reserve
- Investment properties 95 32
- Non-investment properties 792 1,236
Profit and loss account 25,602 20,475
---------- ---------
Equity shareholders funds 44,796 38,443
---------- ---------
Consolidated Statement of Total Recognised Gains and Losses
1998 1998 1997 1997
#000 #000 #000 #000
Profit attributable to
shareholders 8,977 8,591
Revaluation surplus
realised on
property disposal 381 100
Translation differences
arising on overseas
investments and investment
financing (18) (334)
------ ------ ------ ------
363 (234)
------ ------
Total gains recognised
in the period 9,340 8,357
------- ------
Historical Cost Results
There was no material difference between the result as
disclosed in the Consolidated Profit and Loss Account and the
result on an unmodified historical cost basis.
Movements in Shareholders Funds
1998 1997
#000 #000
Shareholders funds at 28 June 1997 38,443 33,269
Profit for the period before dividends 8,977 8,591
Dividends (4,213) (3,796)
Other recognised losses in the period (18) (334)
New share capital issued 1,607 713
------ ------
Shareholders funds at 27 June 1998 44,796 38,443
------ ------
Consolidated Cash Flow Statement
for the 52 weeks ended 27 June 1998
1998 1998 1997 1997
#000 #000 #000 #000
Cash flow from operating
activities (Note 9) 17,877 12,981
Returns on investments
and servicing of finance (401) 467
Taxation (3,433) (1,655)
Capital expenditure
and financial investment (34,992) (17,956)
Acquisitions and disposals 9 (1,095)
Equity dividends paid (3,908) (3,519)
-------- ---------
Cash outflow before
use of liquid resources
and financing (24,848) (10,777)
Management of liquid resources (11,124) 4,513
Financing - Issue of shares 1,607 713
- Increase in
debt 35,566 1,813
------ -------- ----- ---------
37,173 2,526
---------- ---------
Increase/(decrease)
in cash in the period 1,201 (3,738)
========== ========
Reconciliation of net cash
flow to movement in net debt
Increase/(decrease) in cash
in the period 1,201 (3,738)
Cash inflow from increase
in debt (35,566) (1,813)
Cash outflow/(inflow)
from increase/(decrease)
in liquid resources 11,124 (4,513)
-------- ------- ------ --------
Change in net debt
resulting from cash flows (23,241) (10,064)
Cash, overdrafts and loans
disposed with subsidiary (9) 647
New finance leases (929) -
Translation difference 83 101
---------- ---------
Movement in net debt
in the period (24,096) (9,316)
Net debt at beginning of period (6,009) 3,307
----------- ---------
Net debt at end of period (30,105) (6,009)
----------- --------
Analysis of net debt
At Other At
28 June Cash Subsidiary non-cash Exchange 27 June
1997 Flow Disposed changes Movement 1998
Group 1998 #000 #000 #000 #000 #000 #000
Cash at bank
and in hand 408 (14) (9) - - 385
Overdrafts (3,009) 1,215 - 93 83 (1,618)
----- ----- ------- ------- ------ -------
(2,601) 1,201 (9) 93 83 (1,233)
------ ----- ------- ------ ------ -------
Debt due within
one year (3,950) 3,950 - - - -
Debt due after
one year - (39,574) - - - (39,574)
Finance leases - 58 - (929) - (871)
------ ------ ------ ------- ----- --------
(3,950)(35,566) - (929) - (40,445)
------ ------ ------ ------- ----- --------
Current asset
investments 55 38 - (93) - -
------ ------ ------ ------- ------ --------
Cash on deposit 487 11,086 - - - 11,573
------ ------ ------ ------- ------ --------
Total Net Debt (6,009)(23,241) (9) (929) 83 (30,105)
------ ------ ------ ------- ------- --------
At Other At
29 June Cash Subsidiary non-cash Exchange 28 June
1996 Flow Disposed changes Movement 1997
Group 1997 #000 #000 #000 #000 #000 #000
Cash at bank
and in hand 1,050 (482) (147) - (13) 408
Overdrafts (48)(3,256) 349 - (54) (3,009)
------ ----- ------ ------- ------- ------
1,002 (3,738) 202 - (67) (2,601)
------ ----- ------ ------ ------- -------
Debt due within
one year (2,750)(1,813) 445 - 168 (3,950)
----- ------ ------ ------ ------ --------
Current asset
investments 55 - - - - 55
Cash on deposit 5,000 (4,513) - - - 487
------ ----- ----- ----- ------ ------
Total Net Debt 3,307(10,064) 647 - 101 (6,009)
------ ------ ----- ----- ----- -------
Notes:
1. Turnover and segmental analysis 1998 1997
#000 #000
Turnover
Continuing operations
UK 132,779 109,209
Discontinued operations
France - 2,079
-------- -------
132,779 111,288
-------- --------
Turnover originating in the UK from continuing operations
includes sales made to the rest of Europe and the rest of the
world of #757,000 (1997: #630,000)
Turnover relating to discontinued operations was sold wholly
in the respective country of origin.
Profit before taxation of #12,583,000 (1997: #11,541,000) and
net assets of #44,796,000 (1997: #38,443,000) relate solely to
continuing operations.
2.Other operating income 1998 1997
#000 #000
Rents receivable 354 298
Compensation received - 90
Other amounts receivable 9 66
------ ----------
363 454
------ ----------
3. Interest payable and similar charges 1998 1997
#000 #000
Bank loan and overdraft interest on
amounts wholly repayable within one year 643 123
Unsecured loan note interest payable 709 -
Exchange differences and other interest 35 13
Interest on finance lease repayments 43 -
----- --------
Total interest payable and financial
charges 1,430 136
Interest capitalised on
Thornton Park development (706) -
------- --------
Net interest payable and similar charges 724 136
------- --------
4. Taxation 1998 1997
#000 #000
UK Corporation Tax at 31%
(1997 : 33%/31%) 2,946 3,229
Overseas taxation 12 -
Deferred taxation 933 932
------ -------
3,891 4,161
Adjustments in respect of previous years (285) (1,211)
------ --------
Total Taxation 3,606 2,950
------ -------
The tax charge in 1998 has benefited from accelerated capital
allowances on the significant fixed asset additions in the
year, together with tax losses utilised against property
disposal profits and adjustments in respect of prior years.
The tax charge in 1997 has been reduced by the agreement of
claims for prior years foreign losses, shown as adjustments in
respect of previous years.
5. Dividends 1998 1997 1998 1997
Pence per share Pence per share #000 #000
10p Ordinary
Shares:
Interim Paid 1.80 1.65 1,198 1,066
Final Proposed 4.60 4.20 3,015 2,730
------ ----- ----- ------
6.40 5.85 4,213 3,796
----- ----- ----- ------
The trust operating the Long Term Incentive Plan has waived
all but a nominal sum as dividends on the 504,610 shares in
its possession at the year end. As such no dividend has been
accrued for their shareholding although additional amounts
have been provided in anticipation of the conversion of share
options.
The Company is seeking shareholder approval at the Annual
General Meeting on 4 November 1998 for authority under Section
166 of the Companies Act 1985 to purchase up to 10% of the
present issued share capital. Purchases would be financed out
of distributable profits and the directors would not make
purchases unless the expected effect of the purchase would be
to increase earnings per share of the remaining shares and
unless the purchase is generally in the best interest of
shareholders.
6. Earnings per share:
The calculation of earnings per Ordinary Share is based on the
profit after taxation of #8,977,000 (1997: #8,591,000) and the
average number of Ordinary Shares in issue of 65,055,014
(1997: 64,513,183).
The calculation of earnings per Ordinary Share attributable to
profit before exceptional items is based on the continuing
operations profit after tax of #8,977,000 (1997 : continuing
operations profit of #8,591,000) and the average number of
Ordinary Shares in issue of 65,055,014 (1997 : 64,513,183).
The calculation of earnings per Ordinary Share excluding
taxation relief on prior year foreign losses of #nil (1997:
#1,211,000) is based on a continuing operations profit after
tax of #8,977,000 (1997: continuing operations profit after
tax of #7,380,000) and the average number of Ordinary Shares
in issue of 65,055,014 (1997 : 64,513,183).
At 27 June 1998 options in respect of 2,032,074 (1997:
2,919,321) Ordinary Shares were outstanding.
7 Creditors: amounts falling due within one year Group
1998 1997
#000 #000
Bank overdrafts 1,618 3,009
Bank loans - 3,950
Trade creditors 13,396 2,750
Corporation tax 1,679 2,467
Advance corporation tax 1,048 949
Other taxation and social security 834 545
Dividends 3,035 2,730
Other creditors 166 997
Interest accrual 721 11
Capital accrual 6,191 1,045
Accruals and deferred income 5,437 8,490
Amounts due under finance leases 197 -
-------- ---------
34,322 26,943
-------- ---------
In 1997 bank loans outstanding at the year end of #3,950,000
were unsecured, and repaid in full on 30 June 1997 at a fixed
rate of interest of 6.7%.
8. Creditors: amounts falling due after one year
Group
1998 1997
#000 #000
Unsecured loan notes 39,574 -
Trade creditors 610 -
Accruals and deferred income 1,816 416
Amounts due under finance leases 674 -
------ -----
42,674 416
------ -----
On the 31 March 1998, Thorntons PLC issued $65 million
unsecured loan notes with a fixed Sterling interest rate of
7.35%, and entered into currency swap agreements covering the
duration of the notes which remove all currency exposure. The
notes are repayable in five equal annual instalments
commencing in March 2002.
9.Reconciliation of operating
profit to operating cashflows
1998 1997 1997 1997
Continuing Continuing Discontinued Total
#000 #000 #000 #000
Operating profit 12,887 11,266 - 11,266
Profit on disposal
of fixed assets (237) (799) - (799)
Depreciation charges 9,328 7,526 70 7,596
Amortisation of
Long Term Incentive Plan 345 200 - 200
------ ------ ----- ------
Operating cashflows before
working capital
movements 22,323 18,193 70 18,263
Cashflows relating to
previous year
restructuring provision (1,548) (2,853) (299) (3,152)
Increase in stocks (6,310) (3,755) 97 (3,658)
Increase in debtors (3,213) (660) 66 (594)
Increase in creditors 6,625 2,411 (289) 2,122
------- ------ ----- ------
Net cash inflow/(outflow) 17,877 13,336 (355) 12,981
------- ------ ----- -------
10. Annual Report 1998
The financial information given above does not constitute the
Groups Financial statements. Financial statements for the
years ended 27 June 1998 and 28 June 1997 have been reported
on without qualification by PricewaterhouseCoopers (1997:
Coopers & Lybrand), the Companys auditors. Financial
statements for the year ended 28 June 1997 have been delivered
to the Registrar of Companies and the financial statements for
the year ended 27 June 1998 will be delivered to the Registrar
of Companies in due course.
The Annual Report will be posted to shareholders. Copies for
general release will be available from the Company Secretary,
Thorntons PLC, Thornton Park, Somercotes, Derbyshire, DE55 4XJ
from 9 October 1998.
Contact:
Roger Paffard, Chief Executive 0171 466 5000 on Tuesday
6 October 1998 thereafter on 01773 540550
Tim Anderson/Charles Ryland, Buchanan Communications
0171 466 5000
END
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