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Share Name | Share Symbol | Market | Type | Share ISIN | Share Description |
---|---|---|---|---|---|
Thorntons | LSE:THT | London | Ordinary Share | GB0008901935 | ORD 10P |
Price Change | % Change | Share Price | Bid Price | Offer Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
---|---|---|---|---|---|---|---|---|---|---|
0.00 | 0.00% | 142.875 | 0.00 | 01:00:00 |
Industry Sector | Turnover | Profit | EPS - Basic | PE Ratio | Market Cap |
---|---|---|---|---|---|
0 | 0 | N/A | 0 |
RNS Number:6860Y Thorntons PLC 21 February 2006 For Immediate Release 21 February 2006 Thorntons PLC Announcement of Interim Results for 28 weeks ended 7 January 2006 Thorntons PLC, the manufacturer, retailer and distributor of high quality confectionery and other sweet foods, today reports interim results for the 28 weeks ended 7 January 2006. Key Points 2006 2005 Change Turnover #112.3m #119.7m -6.2% Profit before tax #12.8m #13.3m -4.0% Pre-tax cash flows from #23.5m #23.3m +0.9% operating activities Net debt #17.3m #12.5m Up #4.8m Gearing 45.8% 33.9% Up 13.1% Earnings per share 13.0p 13.5p -3.7% Interim dividend per 1.95p 1.95p Unchanged share * Profit before tax down 4.0% to #12.8m on turnover 6.2% lower at #112.3m * Cash flow from operating activities remains strong * Own shop sales 6.4% lower at #80m from 369 shops, eight fewer than last year * Thorntons Direct sales increased by 3.5% to #3.5m * Unchanged Interim dividend at 1.95p * Additional investment in new seasonal ranges for Spring and promotional programme for the remainder of the financial year strengthened * Focus on cost base continues * Christopher Burnett stepped down from the Board and left Thorntons on 2 February 2006 after discussions with Newco were terminated Commenting, John Jackson, Acting Chairman said: "Despite very tough trading conditions, the actions taken by management to improve like-for-like sales, tighten costs and control margin should ensure that the results for the full year will be in line with our expectations." For further information, please contact: Thorntons PLC 020 7466 5000 (Today) 01773 542339 (Thereafter) John Jackson - Acting Chairman Peter Burdon - Chief Executive John Wall - Finance Director Charles Ryland /Nicola Cronk - Buchanan Communications 020 7466 5000 Statement to Shareholders Total sales of #112.3m in the first six months of the financial year were down 6.2% on last year. Profit before tax declined by 4.0% to #12.8m but, despite this, pre-tax operating cash flow improved to #23.5m compared with #23.3m last year. Sales Own shop sales declined by 6.4% to #80.0m on an estate of 369 shops, which was eight fewer than last year. On a like-for-like basis, sales were 4.8% lower, which was heavily influenced by our previously announced disappointing performance during the Christmas period. Franchise sales were similarly affected and were down by 3.3% to #8.3m, with six fewer outlets and like-for-like sales down 5.3%. Thorntons branded commercial sales were broadly unchanged at #13.4m. Whilst we enjoyed an increase in sales to the supermarkets, there was an expected reduction in sales to high street retailers following the Board's decision to withdraw from this type of account earlier in the year. Private label commercial sales were #7.1m compared with #8.8m last year due to the delisting of some seasonal products. Thorntons Direct sales showed an encouraging increase of 3.5% to #3.5m. Profit before Tax Profit before tax was #12.8m compared with #13.3m last year, although EBITDA remained strong at #19.9m. The decline in profit arising from the reduction in sales was offset to some extent by year on year improvements in factory costs and other overheads. Last year's profit before tax included an exceptional restructuring charge of #1.2m together with a one-off stock write-down of #1.4m. Borrowings Net debt was up #4.8m to #17.3m, which reflected increased working capital requirements together with the effect on net debt of settling a further tranche of our US dollar denominated debt. Gearing was 45.8% at the period end. Dividend The Board has approved an unchanged interim dividend of 1.95 pence per share. The interim dividend will be paid on 28th April 2006 to shareholders on the register at close of business on 31st March 2006. Corporate activity / Board changes On 2 February 2006, the Independent Directors of Thorntons announced that discussions with Christopher Burnett and his funders ("Newco") regarding a possible offer for the Company had been terminated. In the view of the Independent Directors and their advisers, Newco's revised indicative offer proposal of 130 pence per share undervalued the Company. It was also announced that Christopher Burnett was leaving the Company with immediate effect and that John Jackson, the senior independent director, is acting as Chairman until such time as a permanent appointment can be made. Outlook Since the New Year, it has been well reported that footfall on the high street has remained subdued and shoppers have become even more attuned to promotions in determining their purchasing decisions. This environment has meant that our sales have continued to disappoint, although own shop sales figures for the Valentines fortnight suggest that there has been less of a decline in like-for-like sales than hitherto this year. This improvement partly reflects the additional investment in a new seasonal range for Valentines versus last year. Similar incremental investment has also been made for Mothers Day and Easter. In addition, we have strengthened the promotional programme for the remainder of the financial year to encourage 'add-on' sales in addition to customers' main purchases. Similarly, for Thorntons Direct and our commercial channels, we will be creating promotions and incentives that should increase profitable sales. Despite very tough trading conditions, the actions taken by management to improve like-for-like sales, tighten costs and control margin should ensure that the results for the full year will be in line with our expectations. John Jackson, Acting Chairman Peter Burdon, Chief Executive 21 February 2006 Consolidated income statement Unaudited results for 28 weeks ended 7 January 2006 For 52 weeks Notes For 28 For 28 weeks ended 25 June weeks ended 8 2005 ended 7 January 2005 (unaudited) January 2006 (unaudited) #'000 #'000 #'000 187,704 Revenue 112,347 119,746 (91,276) Cost of sales (51,429) (56,934) 96,428 Gross profit 60,918 62,812 (85,141) Operating expenses (47,214) (47,213) (1,658) Exceptional items 4 - (1,229) (86,799) Total operating expenses (47,214) (48,442) 816 Other operating income 407 437 10,445 Operating profit 5 14,111 14,807 42 Finance income 8 16 (2,408) Finance costs (1,362) (1,535) 8,079 Profit before taxation 12,757 13,288 (2,529) Taxation 6 (4,290) (4,495) 5,550 Profit attributable to equity 8,467 8,793 shareholders Key ratios 8.5 Basic earnings per share (pence) 8 13.0 13.5 8.4 Fully diluted earnings per share (pence) 8 12.8 13.3 The Directors have approved an interim dividend of 1.95 pence per share in respect of the 28 weeks ended 7 January 2006 (1.95 pence per share for the 28 weeks ended 8 January 2005). Consolidated balance sheet As at 25 June Notes As at 7 As at 8 2005 January January (unaudited) 2006 2005 #'000 (unaudited) (unaudited) #'000 #'000 Non-current assets 72,084 Property, plant and equipment 70,591 73,143 7,460 Intangible assets 7,430 6,667 79,544 78,021 79,810 Current assets 17,787 Inventories 15,544 15,038 12,773 Trade and other receivables 14,984 15,746 874 Cash and cash equivalents 6,453 17,165 31,434 36,981 47,949 Current liabilities (22,733) Borrowings (14,489) (16,853) (25,548) Trade and other payables (25,675) (33,480) - Derivative financial (491) - instruments (1,616) Current tax liabilities (1,907) (3,215) (49,897) (42,562) (53,548) (18,463) Net current liabilities (5,581) (5,599) Non-current liabilities (6,532) Borrowings (9,252) (12,846) (20,780) Other creditors (19,402) (19,851) (1,992) Deferred tax liabilities (5,391) (4,297) (617) Provisions (622) (222) (29,921) (34,667) (37,216) 31,160 Net assets 37,773 36,995 Shareholders' equity 6,669 Ordinary shares 6,719 6,666 12,528 Share premium 12,852 12,505 - Hedge reserve 173 - 11,963 Retained earnings 18,029 17,824 31,160 Total equity 37,773 36,995 Consolidated statement of recognised income and expense +-------------+----------------------------------------+---------------+--------------+ | For 52 weeks| | For 28 weeks| For 28 weeks | |ended 25 June| |ended 7 January| ended 8 | | 2005| | 2006| January 2005 | | (unaudited)| | (unaudited)| (unaudited)| | #'000| | #'000 | #'000 | | | | | | +-------------+----------------------------------------+---------------+--------------+ | - |Effective portion of changes in fair | (189) | - | | |value of cash flow hedges (net of tax) | | | +-------------+----------------------------------------+---------------+--------------+ | (3,953) |Actuarial gains/(losses) recognised on | 1,079 | (1,959) | | |defined benefit pension scheme | | | +-------------+----------------------------------------+---------------+--------------+ | 1,185 |Movement of deferred tax on pension | (324) | 588 | | |liability | | | +-------------+----------------------------------------+---------------+--------------+ | (2,768) |Net gains/(losses) not recognised in the| 566 | (1,371) | | |income statement | | | +-------------+----------------------------------------+---------------+--------------+ | 5,550 |Profit attributable to equity | 8,467 | 8,793 | | |shareholders | | | +-------------+----------------------------------------+---------------+--------------+ | 2,782 |Total recognised income and expenses for| 9,033 | 7,422 | | |the period | | | +-------------+----------------------------------------+---------------+--------------+ | - |Adoption of IAS32/39 (net of tax) | 362 | - | +-------------+----------------------------------------+---------------+--------------+ | 2,782 |Total recognised income and expenses | 9,395 | 7,422 | | |attributable to equity shareholders | | | +-------------+----------------------------------------+---------------+--------------+ Consolidated statement of cash flows Unaudited results for 28 weeks ended 7 January 2006 +---------------+-----------------------------------+-----+---------------+--------------+ | For 52 weeks| |Notes| For 28 weeks| For 28 weeks| | ended| | | ended| ended| | 25 June 2005| | | 7 January 2006|8 January 2005| | (unaudited)| | | (unaudited)| (unaudited)| | #'000| | | #'000| #'000| +---------------+-----------------------------------+-----+---------------+--------------+ | 13,216 |Cash flows from operating | 10 | 22,400 | 22,218 | | |activities | | | | +---------------+-----------------------------------+-----+---------------+--------------+ | | | | | | +---------------+-----------------------------------+-----+---------------+--------------+ | |Cash flows from investing | | | | | |activities | | | | +---------------+-----------------------------------+-----+---------------+--------------+ | (5,279) |Purchase of property, plant, | | (1,992) | (4,494) | | |equipment and intangible assets | | | | +---------------+-----------------------------------+-----+---------------+--------------+ | 462 |Sale of property, plant and | | 631 | 420 | | |equipment | | | | +---------------+-----------------------------------+-----+---------------+--------------+ | (4,817) |Net cash used in investing | | (1,361) | (4,074) | | |activities | | | | +---------------+-----------------------------------+-----+---------------+--------------+ | | | | | | +---------------+-----------------------------------+-----+---------------+--------------+ | |Cash flows from financing | | | | | |activities | | | | +---------------+-----------------------------------+-----+---------------+--------------+ | (2,420) |Net interest paid | | (1,408) | (1,463) | +---------------+-----------------------------------+-----+---------------+--------------+ | 51 |Net proceeds from issue of new | | 374 | 25 | | |shares | | | | +---------------+-----------------------------------+-----+---------------+--------------+ | (814) |Loans advanced/(repaid) | | (8,800) | 4,300 | +---------------+-----------------------------------+-----+---------------+--------------+ | (4,516) |Capital element of finance lease | | (2,562) | (2,283) | | |rental payments | | | | +---------------+-----------------------------------+-----+---------------+--------------+ | (4,428) |Dividends paid | | (3,162) | (3,157) | +---------------+-----------------------------------+-----+---------------+--------------+ | (12,127) |Net cash used in financing | | (15,558) | (2,578) | | |activities | | | | +---------------+-----------------------------------+-----+---------------+--------------+ | (3,728) |Increase in cash, cash equivalents | | 5,481 | 15,566 | | |and bank overdrafts | | | | +---------------+-----------------------------------+-----+---------------+--------------+ +--------------+------------------------------------+-----+---------------+--------------+ | 1,599 |Cash, cash equivalents and bank | | (2,129) | 1,599 | | |overdrafts at beginning of the | | | | | |period | | | | +--------------+------------------------------------+-----+---------------+--------------+ | (2,129) |Cash, cash equivalents and bank | | 3,352 | 17,165 | | |overdrafts at the end of the | | | | | |period | | | | +--------------+------------------------------------+-----+---------------+--------------+ Notes to the interim financial statements 1. Basis of preparation of the interim financial statements EU law (IAS Regulation EC 1606/2002) requires that the group's annual consolidated financial statements for the 52 weeks ending 24 June 2006 be prepared in accordance with International Financial Reporting Standards (IFRS) adopted for use in the EU (Adopted IFRS). This financial information has been prepared in accordance with the Listing Rules of the Financial Services Authority. In preparing this financial information management has used its best knowledge of the expected standards and interpretations, facts and circumstances, and accounting policies that will be applied when the group prepares its first set of financial statements in accordance with IFRSs as adopted for use in the EU as of 24 June 2006. As a result, although this financial information is based on management's best knowledge of expected standards and interpretations, and current facts and circumstances, this may change. For example, IFRS standards and IFRIC interpretations are subject to ongoing review and possible amendment or interpretative guidance and, therefore, are still subject to change. Therefore, until the company prepares its first set of financial statements in accordance with IFRSs as adopted for use in the EU, the possibility cannot be excluded that the accompanying financial information may have to be adjusted. An explanation of how the transition to IFRS has affected the reported financial position and financial performance of the group is provided in note 12. This note includes reconciliations of equity and profit or loss for the comparative periods reported under UK Generally Accepted Accounting Practices (UK GAAP) to those reported under IFRS. The group has chosen not to adopt IAS 34, 'Interim financial statements', in preparing its 2006 interim financial statements and, therefore, this interim financial information is not in compliance with IFRS. The accounting policies have been consistently applied to all the periods presented with one exception. As permitted by IFRS 1 "First-time Adoption of IFRS", the group has adopted IAS 32 and IAS 39 "Financial Instruments" prospectively from 26 June 2005, and comparative figures have not been restated. The financial information contained in these interim financial statements does not constitute statutory accounts as defined in section 240 of the Companies Act 1985. The figures for the 52 weeks ended 25 June 2005 have been derived from the published statutory accounts as amended by the IFRS adjustments as set out in note 12. A copy of the full accounts for that period, on which the auditors have issued an unqualified audit report, has been delivered to the Registrar of Companies. The interim financial statements are unaudited and do not constitute statutory accounts but have been formally reviewed by the auditors and their report is set out on page 20. The auditors have not issued a review opinion on the restated financial information for the 28 weeks ended 8 January 2005. 2. Accounting policies Accounting convention The consolidated interim financial statements have been prepared under the historical cost convention except for pension assets and liabilities and share based payment charges which are measured at fair value, and in accordance with those parts of the Companies Act 1985 applicable to companies reporting under IFRS. Basis of consolidation The consolidated financial information incorporates the financial statements of the Company and its subsidiaries drawn up to the end of the financial period. Inter-company sales and profits are eliminated on consolidation. Property, plant and equipment Property, plant and equipment are stated at cost less accumulated depreciation. Cost comprises the purchase price of property, plant and equipment together with any incidental costs of acquisition. Specific internal employee costs incurred in implementing capital projects of the Group are capitalised within property, plant and equipment in the same category as the project. Subsequent costs are included in the asset's carrying value or recognised as a separate asset, as appropriate, only when it is probable that future economic benefits associated with the item will flow to the Group and the cost of the item can be measured reliably. All other repairs and maintenance expenditure is charged to the income statement as incurred. All property, plant and equipment, other than land and assets in the course of construction, are depreciated to write off their cost down to residual value over their remaining useful lives by equal annual instalments, as follows:- In equal annual instalments: Freehold premises 50 years Short leasehold land and Period of the lease buildings Retail fixtures and fittings 5 years Retail equipment 4 to 5 years Retail store improvements 10 years Other equipment and vehicles 3 to 7 years Manufacturing plant and 12 to 15 years machinery The assets' residual values and useful lives are reviewed and adjusted if appropriate, at each balance sheet date. The need for an impairment write-down is assessed by comparison of the carrying value of the asset against the higher of its net realisable value or its value in use. Intangible assets Acquired computer software licences are capitalised on the basis of the costs incurred to acquire and bring to use the specific software. These costs are amortised over their estimated useful lives (three to five years). Costs associated with developing or maintaining computer software programmes are recognised as an expense as incurred. Costs that are directly associated with the production of identifiable and unique software products controlled by the Group, and that will probably generate economic benefits exceeding costs beyond one year, are recognised as intangible assets. Computer software development costs recognised as assets are amortised over their estimated useful lives (not exceeding five years). Employee share option schemes Where share options are granted to employees as part of their remuneration, the fair value of options granted is recognised as an employee expense in the income statement with a corresponding increase in equity. The fair value is measured at the grant date and expensed through the income statement over the period during which the employees become unconditionally entitled to the options. The amount recognised in the income statement is adjusted each year for the expected and actual number of options vesting. The fair value of the options is measured using a Black Scholes option valuation model for options with non-market performance conditions and a Monte Carlo model for options with market performance conditions. The proceeds received net of any directly attributable transaction costs are credited to share capital and share premium when the options are exercised. Own shares held by the ESOP Trust are carried at cost and disclosed within shareholders' funds. Investments in subsidiaries Investments in subsidiaries are stated at cost, provision being made where appropriate for impairment, assessed by comparing the carrying value to the higher of net realisable value or its value in use. Inventories Inventories are stated at the lower of cost and net realisable value. Cost includes materials, direct labour and an attributable proportion of manufacturing overheads, based on normal operating capacity, according to the stage of production reached. Net realisable value is the estimated value which would be realised after deducting all costs of completion, marketing and selling. Provision is made to reduce the cost to net realisable value having regard to the age and condition of inventory, as well as its anticipated saleability. Cash and equivalents Cash and cash equivalents includes cash in hand, deposits on call with banks, other short term highly liquid investments with maturities of three months or less, and bank overdrafts. Bank overdrafts are shown within borrowings in current liabilities on the balance sheet. Borrowings Borrowings are recognised initially at fair value, net of transaction costs. Subsequent measurement is based on amortised cost, and any difference between the proceeds (net of transaction of costs) and the redemption value is recognised in the income statement over the period of the borrowings using the effective interest rate method. Borrowings are classified as current liabilities unless the Group has an unconditional right to defer settlement of the liability for at least 12 months after the balance sheet date. Deferred taxation Deferred tax expected to be payable or recoverable on temporary differences at the balance sheet date between the tax bases of assets and liabilities and their carrying amounts for financial reporting purposes is accounted for using the liability method. Deferred tax liabilities are recognised in full for all taxable temporary differences, and deferred tax assets are recognised to the extent that it is probable that taxable profits will be available against which deductible temporary differences can be utilised. However, if the deferred tax arises from the initial recognition of an asset or liability in a transaction other than a business combination that at the time of the transaction affects neither accounting nor taxable profit, it is not accounted for. Deferred taxation is measured based on tax rates and laws enacted or substantively enacted at the balance sheet date. Provisions A provision is recognised in the balance sheet when the Group has a legal or constructive obligation as a result of a past event, it is probable that an outflow of economic benefits will be required to settle the obligation and a reliable estimate can be made of the amount of the obligation. If the effect is material, provisions are determined by discounting the expected future cash flows at a pre-tax rate that reflects current market assessments of the time value of money and, where appropriate, the risks specific to the liability. Provision is made for the Group's obligations to maintain properties to a standard as required by various leases. The provision is not discounted. In respect of leasehold properties, from which the Group no longer trades and which remain vacant, onerous lease provisions are created to cover rentals and other property obligations up to the expiry date of the lease. If a property is sublet externally but at a level below the head rent then the lease is also classed as onerous, with the total amounts receivable and payable being provided. The provision is not discounted. Revenue Revenue comprises the amounts receivable for goods and services provided outside the Group in the normal course of business, net of trade discounts and value added tax. Retail sales, returns and allowances are reflected at the date of the transaction with consumers. In addition provisions are made for expected returns as necessary. For sales promotions purposes, Thorntons PLC operates a variety of schemes that give rise to goods being sold at a discount to standard retail price. These include staff discounts and the redemption of promotional vouchers. Revenue is adjusted to show sales net of all related discounts. Wholesale sales, including sales to franchise outlets, are recognised when goods are despatched to customers, the customer has accepted the products, and collectability of the related receivables is reasonably assured. Provision is made for expected returns and allowances as necessary. Pensions Defined benefit pension scheme The retirement benefit obligation recognised in the balance sheet represents the present value of the defined benefit obligation and unfunded liabilities as reduced by the fair value of defined benefit scheme assets. The defined benefit obligation is calculated annually by independent actuaries using the projected united method. The present value of the defined benefit obligation is determined by discounting the estimated future cash outflows. Actuarial gains and losses are recognised in full in the period in which they occur. They are recognised directly in equity and are presented in the statement of recognised income and expense. Other income and expenses associated with the defined benefit section are recognised in the income statement. The contributions made by the employees and the Group are held in a trust fund, separated from the Group's finances. Defined contribution pension scheme The Group also operates a defined contribution pension scheme which requires contributions to be made to a separately administered fund. Contributions to the fund are determined as a percentage of employees' earnings and are charged to the profit and loss account as incurred. Foreign currencies Transactions in foreign currencies are translated at the exchange rate ruling at the date of transaction. Monetary assets and liabilities denominated in foreign currencies are retranslated at the exchange rates ruling at the balance sheet date and any exchange differences arising are taken to the consolidated income statement. Operating leases The costs of all operating leases are charged against operating profit on a straight line basis at existing rental levels. Incentives to sign leases, including reverse premiums and rent free periods, are treated as deferred income and are credited to the income statement in equal instalments over the term of the lease. Rental income from operating leases is recognised on a straight line basis over the period of the lease at current rental levels. Finance leases Leases are classified as finance leases where the terms of the lease transfer substantially all the risks and rewards of ownership to the Group. All other leases are classified as operating leases. Property, plant and equipment held under finance leases are capitalised in the balance sheet and depreciated over the shorter of their lease term and their expected useful lives. The interest element of leasing payments represents a constant proportion of the capital balance outstanding and is charged to the consolidated income statement over the period of the lease. New Store expenditure Pre-trading expenditure on new stores is charged to the income statement as incurred. Derivatives and other financial instruments Financial instruments are utilised to support and raise finances for the trading operations of the Group. Where appropriate, the Group enters into currency swap and interest rate swap agreements, in order to minimise relevant currency and interest rate exposure to the Group from the transaction. The effect of swaps is that a fixed dollar interest, dollar-denominated loan is converted to a fixed sterling interest, sterling-denominated loan. As such the swaps are designated and qualify as cash flow hedges and are included on the balance sheet at their fair value. Any changes in the fair value of the currency and interest rate swaps during the period in which the cash flow hedge is in effect are reflected as a component of equity to the extent that that the hedge is effective. The ineffective part of the hedge is recognised in the consolidated income statement immediately. Gains or losses relating to the effective portions of currency and interest rate swaps are recycled to the income statement and included in operating expenses and finance costs respectively in the period in which the hedged items affects profit or loss. When a hedging instrument expires or is sold, terminated or exercised, or no longer meets the criteria for hedge accounting, any cumulative gain or loss on the hedging instrument previously recognised in equity is retained in equity and is recognised when the forecast transaction is ultimately recognised in the income statement. If the hedged transaction is no longer expected to occur, the net cumulative gain or loss that was recognised in equity is immediately transferred to the income statement. Grants Grants and other contributions towards the cost of property, plant and equipment are included in creditors as deferred income and credited to the income statement over the life of the asset. Exceptional items Exceptional items are material items which derive from events or transactions which individually or, if of a similar type, in aggregate need to be disclosed by virtue of their size or incidence if the financial statements are to give a true and fair view. Dividends Dividends are recognised as a liability in the period in which they are approved. 3. Segmental reporting The Group has one business segment which is food retail and one geographical segment, which is the United Kingdom. The business segment reporting format reflects the Group's management and internal reporting structure. 4. Exceptional items +-----------------+------------------------------+----------------+--------------------+ | For 52 weeks| | For 28 weeks| For 28 weeks| | ended 25 June| | ended 7 January|ended 8 January 2005| | 2005| | 2006| | | | | | #'000| | #'000| | #'000| | +-----------------+------------------------------+----------------+--------------------+ | |Exceptional items comprise: | | | +-----------------+------------------------------+----------------+--------------------+ | 1,266 |Restructuring costs | - | 1,229 | +-----------------+------------------------------+----------------+--------------------+ | 475 |Write-off of redundant assets | - | - | +-----------------+------------------------------+----------------+--------------------+ | 360 |Unrecognised VAT liability | - | - | | |from prior periods | | | +-----------------+------------------------------+----------------+--------------------+ | (443) |Release of surplus accruals | - | - | +-----------------+------------------------------+----------------+--------------------+ | 1,658 |Total exceptional items | - | 1,229 | +-----------------+------------------------------+----------------+--------------------+ 5. Operating Profit +-----------------+------------------------------+----------------+--------------------+ | For 52 weeks| | For 28 weeks| For 28 weeks| | ended 25 June| | ended 7 January|ended 8 January 2005| | 2005| | 2006| | | | | | #'000| | #'000| | #'000| | +-----------------+------------------------------+----------------+--------------------+ | |Operating profit is stated | | | | |after charging/(crediting): | | | +-----------------+------------------------------+----------------+--------------------+ | 11,714 |Depreciation and amortisation | 5,754 | 5,891 | | |charges | | | +-----------------+------------------------------+----------------+--------------------+ | (188) |Profit on disposal of | (594) | (282) | | |property, plant and equipment | | | +-----------------+------------------------------+----------------+--------------------+ | 100 |Costs associated with offer | 192 | - | | |talks | | | +-----------------+------------------------------+----------------+--------------------+ 6. Taxation The tax charge, including deferred tax, for the 28 weeks ended 7 January 2006 is based on the estimated effective rate chargeable for the 52 weeks ending 24 June 2006 of 33.6% (2005: 33.3%). The tax charge exceeds the charge based on the statutory rate of corporation tax of 30.0%, principally due to the non-deductibility of depreciation charged on capital expenditure in respect of store infrastructure. 7. Dividends +-----------------+------------------------------+----------------+--------------------+ | For 52 weeks| | For 28 weeks| For 28 weeks| | ended 25 June| | ended 7 January|ended 8 January 2005| | 2005| | 2006| | | | | | #'000| | #'000| | #'000| | +-----------------+------------------------------+----------------+--------------------+ | 3,157 |Final dividend paid for the 52| 3,162 | 3,157 | | |weeks ended 25 June 2005 of | | | | |4.85p (52 weeks ended 26 June | | | | |2004: 4.85p) | | | +-----------------+------------------------------+----------------+--------------------+ | 1,271 |Interim dividend paid of 1.95p| - | - | | |for the 52 weeks ended 25 June| | | | |2005 | | | +-----------------+------------------------------+----------------+--------------------+ | 4,428 |Amounts recognised as | 3,162 | 3,157 | | |distributions to equity | | | | |holders | | | +-----------------+------------------------------+----------------+--------------------+ | - |Interim dividend for the 52 | 1,310 | 1,271 | | |weeks ending 24 June 2006 (52 | | | | |weeks ended 25 June 2005: | | | | |1.95p) | | | +-----------------+------------------------------+----------------+--------------------+ The interim dividend will be paid on 28 April 2006 to shareholders registered on 31 March 2006. The shares will be quoted ex-dividend on 29 March 2006. 8. Earnings per share Basic earnings per share is calculated by dividing the earnings attributable to ordinary shareholders by the weighted average number of ordinary shares in issue during the period. For diluted earnings per share the weighted average number of ordinary shares in issue is adjusted to assume conversion of all dilutive potential ordinary shares. These represent share options granted to employees where the exercise price is less than the average market price of the Company's ordinary shares during the 28 weeks to 7 January 2006. For 52 weeks ended For 28 weeks ended For 28 weeks ended 7 January 2006 8 January 2005 25 June 2005 Profit Basic Fully Profit Basic Fully Profit Basic Fully #'000 earnings diluted #'000 Earnings diluted #'000 earnings diluted earnings earnings earnings per per per share per share per share per share share share 6,711 10.3p 10.2p Profit before 8,467 13.0p 12.8p 9,653 14.8p 14.6p exceptional items (1,161) (1.8) (1.8)p Exceptional - - - (860) (1.3)p (1.3)p items (post tax) 5,550 8.5p 8.4p Profit 8,467 13.0p 12.8p 8,793 13.5p 13.3p attributable to equity shareholders +------------------------------------------------------------------------------------+ |Weighted average number of shares: | +---------------+----------------------------------+-----------------+---------------+ | For 52 weeks| | For 28 weeks| For 28 weeks| | ended| | ended| ended| | | | 7 January 2006| 8 January 2005| | 25 June 2005| | | | | Number of| | Number of| Number of| | | | | | |Ordinary Shares| | Ordinary Shares|Ordinary Shares| +---------------+----------------------------------+-----------------+---------------+ | 65,118,846 |Basic weighted average number of | 65,180,784 | 65,100,566 | | |ordinary shares | | | +---------------+----------------------------------+-----------------+---------------+ | 700,115 |Dilutive effect from share options| 997,462 | 1,180,303 | +---------------+----------------------------------+-----------------+---------------+ | 65,818,961 |Fully diluted weighted average | 66,178,246 | 66,280,869 | | |number of ordinary shares | | | +---------------+----------------------------------+-----------------+---------------+ 9. Reconciliation of movements in total equity +---------------+-----------------------------------+------------------+---------------+ | For 52 weeks| |For 28 weeks ended| For 28 weeks| | ended| | | ended| | | | 7 January| | | 25 June 2005| | | 8 January| | | | 2006| | | #'000| | | 2005| | | | #'000| | | | | | #'000| +---------------+-----------------------------------+------------------+---------------+ | 2,782 |Total recognised income and | 9,395 | 7,422 | | |expenses attributable to equity | | | | |shareholders | | | +---------------+-----------------------------------+------------------+---------------+ | (4,428) |Dividends | (3,162) | (3,157) | +---------------+-----------------------------------+------------------+---------------+ | 51 |New share capital issued | 374 | 25 | +---------------+-----------------------------------+------------------+---------------+ | 155 |Value of employee services (net of | 6 | 105 | | |tax) | | | +---------------+-----------------------------------+------------------+---------------+ | (1,440) |Net increase/(decrease) in equity | 6,613 | 4,395 | | |shareholders' funds | | | +---------------+-----------------------------------+------------------+---------------+ | 32,600 |Opening total equity | 31,160 | 32,600 | +---------------+-----------------------------------+------------------+---------------+ | 31,160 |Closing total equity | 37,773 | 36,995 | +---------------+-----------------------------------+------------------+---------------+ 10. Reconciliation of operating profit to cash flows from operating activities +----------------+---------------------------------+------------------+---------------+ | For 52 weeks| |For 28 weeks ended| For 28 weeks| | ended 25 June| | 7 January 2006|ended 8 January| | 2005| | | 2005| | | | #'000| | | #'000| | | #'000| +----------------+---------------------------------+------------------+---------------+ | 10,445 |Operating profit | 14,111 | 14,807 | +----------------+---------------------------------+------------------+---------------+ | 11,714 |Depreciation and amortisation | 5,754 | 5,891 | | |charges | | | +----------------+---------------------------------+------------------+---------------+ | 155 |Share based payment charges | 91 | 117 | +----------------+---------------------------------+------------------+---------------+ | (188) |Profit on disposal of property, | (594) | (282) | | |plant and equipment | | | +----------------+---------------------------------+------------------+---------------+ | 973 |Change in inventories | 2,243 | 3,722 | +----------------+---------------------------------+------------------+---------------+ | (485) |Change in receivables | (2,211) | (3,365) | +----------------+---------------------------------+------------------+---------------+ | (7,155) |Change in payables | 4,000 | 2,575 | +----------------+---------------------------------+------------------+---------------+ | 393 |Change in provisions | 5 | (2) | +----------------+---------------------------------+------------------+---------------+ | (245) |Change in post-employment | 84 | (183) | | |benefits | | | +----------------+---------------------------------+------------------+---------------+ | 15,607 |Cash flows from operating | 23,483 | 23,280 | | |activities before taxation | | | +----------------+---------------------------------+------------------+---------------+ | (2,391) |Corporation taxation | (1,083) | (1,062) | +----------------+---------------------------------+------------------+---------------+ | 13,216 |Cash flows from operating | 22,400 | 22,218 | | |activities | | | +----------------+---------------------------------+------------------+---------------+ 11. Reconciliation of movement in net debt +--------------+----------------------------------+---------------+--------------+ | For 52 weeks| | For 28 weeks| For 28 weeks| | ended| | ended| ended| | 25 June 2005| | 7 January 2006|8 January 2005| | | | | | | #'000| | #'000| #'000| +--------------+----------------------------------+---------------+--------------+ | (3,728) |Increase in cash and cash | 5,481 | 15,566 | | |equivalents | | | +--------------+----------------------------------+---------------+--------------+ | 5,330 |Cash flows from decrease/ | 11,362 | (2,017) | | |(increase) in debt | | | +--------------+----------------------------------+---------------+--------------+ | 1,602 |Change in net debt resulting from | 16,843 | 13,549 | | |cash flows | | | +--------------+----------------------------------+---------------+--------------+ | (4,779) |Inception of new finance leases | (5,538) | (2,000) | +--------------+----------------------------------+---------------+--------------+ | (773) |Effect of exchange rate | (202) | 358 | | |fluctuations on net debt | | | +--------------+----------------------------------+---------------+--------------+ | (3,950) |Movement in net debt in the period| 11,103 | 11,907 | +--------------+----------------------------------+---------------+--------------+ | (24,441) |Net debt at beginning of period | (28,391) | (24,441) | +--------------+----------------------------------+---------------+--------------+ | (28,391) |Net debt at end of period | (17,288) | (12,534) | +--------------+----------------------------------+---------------+--------------+ 12. Explanation of transition to IFRS Thorntons PLC is required to report its financial statements in accordance with International Financial Reporting Standards (IFRS) from 26 June 2005. In general, the group is required to determine its IFRS accounting policies and apply them retrospectively to determine its opening balance sheet as at 27 June 2004. IFRS 1 First time adoption of International Financial Reporting Standards sets out the procedures which the Group must follow when it adopts IFRS for the first time. The Group is required to establish its IFRS accounting policies for the period ending 24 June 2006 and in general apply these retrospectively to determine the IFRS opening balance sheet at its date of transition, 27 June 2004. This standard provides a number of optional and compulsory exemptions to this general principle. Set out below are the exemptions the Group has adopted: 1 IFRS 2 Share-based payments. The Group has adopted the exemption to apply IFRS 2 only to equity instruments granted after 7 November 2002 and that had not vested as at 1 January 2005. 2 IAS 39 Financial Instruments: Recognition and Measurement and IAS 32 Financial Instruments: Disclosure and Presentation. The Group has taken the exemption not to restate comparatives for IAS 32 and IAS 39. Consequently, the comparative information for financial instruments in this document for the 28 weeks ended 8 January 2005 and the 52 weeks ended 25 June 2005 is presented on the previously existing UK GAAP basis. On 26 June 2005, an adjustment has been made to reflect the movements from UK GAAP carrying values to IAS 39 values. 3 The carrying value of previously revalued assets has been treated as deemed cost on transition to IFRS, in accordance with the provisions of IFRS 1. Accordingly, the Group's revaluation reserve of #186,000 in the IFRS opening balance sheet has been reclassified into the profit and loss reserve. The standards giving rise to the most significant changes to the reported profit before tax of the Group are: (a) SIC15 "Operating Leases: incentives" Under UK GAAP operating lease incentives (monetary contributions and rent free periods) were released to the profit and loss account over the period to the first rent review. Under SIC 15, lease incentives are required to be recognised in the income statement over the life of the lease. As a result, the Group's IFRS opening balance sheet at 27 June 2004 includes additional deferred income of #1,323,000 and an increase in operating profit for the 52 weeks ended 25 June 2005 of #133,000. (b) IFRS 2 "Share based payment" Under IFRS 2, the charge recognised in the income statement for share options, long term incentive plans and other share based payments will be based on the 'fair value' of the awards, calculated using an option pricing model. This differs from UK GAAP, where the charge recognised was based on the 'intrinsic value' of awards, being the difference between the market value of the shares at the date of the award and the option exercise price. In accordance with the transitional provisions of IFRS 2, the Group has applied the fair value model to all grants of equity instruments after 7 November 2002 that had not vested as at 1 January 2005. For equity-settled share based payments, the fair value determined at the date of the grant is expensed through the income statement on a straight line basis over the vesting period. This is based on the Group's estimate of the number of shares that are believed will eventually vest. Fair value is measured by the use of the Black Scholes model for options with internal performance conditions and the Monte Carlo model for options with external performance conditions. The decrease in operating profit for the 52 weeks ended 25 June 2005 arising from the adoption of IFRS2 is #24,000. (c) IAS 10 "Events after the Balance Sheet Date" Proposed dividends are no longer accrued for in the period to which they relate. Dividends will now be recognised only when they are declared and approved at the Annual General Meeting. Interim dividends are recognised when paid. The adjustment for the 25 June 2005 year end is to reverse the UK GAAP accrued final dividend not approved until the AGM in October 2005. The effect on the IFRS opening balance sheet is to reduce creditors and increase net assets by the final dividend of #3,157,000. In addition, dividends will no longer be shown on the face of the income statement but instead as a movement directly to equity. (d) IAS 19 "Employee benefits" Under UK GAAP, the cost to the Group of the defined benefit pension scheme was charged to the profit and loss account so as to spread the costs of the pension over the average remaining service lives of the employees. The pension provision /prepayment in the balance sheet represented the differences between contributions paid and the cumulative amounts charged to the profit and loss account. The assets and liabilities of the scheme itself were not recognised on the Group's balance sheet. The defined benefit pension net liability of #15,827,000 recognised in the IFRS opening balance sheet under IAS 19 represents the present value of the defined benefit liabilities as reduced by the market value of scheme assets. The decrease in operating profit for the 52 weeks ended 25 June 2005 arising from the adoption of IAS 19 on the Group's income statement is #165,000. IAS 19 allows several alternative options for the accounting for actuarial gains and losses. The Group has elected to recognise all actuarial gains and losses in full in the period in which they occur, outside of the income statement, via the statement of recognised income and expense. This option has been selected for consistency with the required UK GAAP treatment under FRS 17 that had previously been disclosed by way of a note in the Group's financial statements. The actuarial loss of #3,953,000 in the year ended 25 June 2005 has been recorded in the statement of recognised income and expenses. The pension deficit under IFRS at 25 June 2005 is #18,997,000. (e) IAS 12 "Deferred taxation" IAS 12 takes a balance sheet approach to deferred tax whereby deferred tax is recognised in the balance sheet by applying the appropriate tax rate to the temporary differences arising between the carrying values of assets and liabilities and their tax base. This contrasts with UK GAAP , which considers timing differences arising in the income statement. As a result, the Group's IFRS opening balance sheet includes an additional deferred tax asset of #4,170,000. The majority of this adjustment relates to the deferred tax asset recognised on the pension deficit at 27 June 2004. (f) IAS 14 "Segmental reporting" The Group has reviewed and amended the segmental reporting presented in the report and accounts in the light of guidance contained under IFRS. (g) IAS 2 "Inventories" IAS2 requires the inclusion of certain elements of income from suppliers and other similar items in the cost of inventories. (h) IAS 38 "Intangible Assets" Under UK GAAP, all capitalised computer software was included within tangible fixed assets. IAS 38 Intangible Assets requires software that is not an integral part of an item of computer hardware to be classified within intangible assets. An adjustment of #5,311,000 has been made to reclassify such computer software from property, plant and equipment to intangible assets as at 27 June 2004. The previously reported and restated financial statements are set out below: IFRS income statement for 28 weeks ended 8 January 2005 +--------------+---------+-------+--------+--------+-------+-----------+------------------+---------+ | #'000 |UK GAAP |SIC15 |IFRS2 |IAS19 |IAS 12 |IAS2 |Reclass-ifications|IFRS | | | |Leases |Share |Employee|Income |Inventories| | | | | | |based |Benefits|Taxes | | | | | | | |payments| | | | | | +--------------+---------+-------+--------+--------+-------+-----------+------------------+---------+ |Reference | |a |b |d |e |g | | | | | | | | | | | | | +--------------+---------+-------+--------+--------+-------+-----------+------------------+---------+ |Revenue |119,746 | - | - | - | - | - | - |119,746 | +--------------+---------+-------+--------+--------+-------+-----------+------------------+---------+ |Cost of sales |(56,907) | - | - | - | - | (27) | - |(56,934) | +--------------+---------+-------+--------+--------+-------+-----------+------------------+---------+ |Gross profit | 62,839 | - | - | - | - | (27) | - | 62,812 | +--------------+---------+-------+--------+--------+-------+-----------+------------------+---------+ |Operating | | | | | | | | | |expenses |(47,474) | (19) | 50 | (49) | - | - | 279 |(47,213) | +--------------+---------+-------+--------+--------+-------+-----------+------------------+---------+ |Exceptional | | | | | | | | | |items | (1,229) | - | - | - | - | - | - | (1,229) | +--------------+---------+-------+--------+--------+-------+-----------+------------------+---------+ |Total | | | | | | | | | |administrative| | | | | | | | | |expenses |(48,703) | (19) | 50 | (49) | - | - | 279 |(48,442) | +--------------+---------+-------+--------+--------+-------+-----------+------------------+---------+ |Other | | | | | | | | | |operating | | | | | | | | | |income | 437 | - | - | - | - | - | - | 437 | +--------------+---------+-------+--------+--------+-------+-----------+------------------+---------+ |Operating | | | | | | | | | |profit | 14,573 | (19) | 50 | (49) | - | (27) | 279 | 14,807 | +--------------+---------+-------+--------+--------+-------+-----------+------------------+---------+ |Other income | 279 | - | - | - | - | - | (279) | - | +--------------+---------+-------+--------+--------+-------+-----------+------------------+---------+ |Profit before | | | | | | | | | |interest | 14,852 | (19) | 50 | (49) | - | (27) | - | 14,807 | +--------------+---------+-------+--------+--------+-------+-----------+------------------+---------+ |Finance income| 16 | - | - | - | - | - | - | 16 | +--------------+---------+-------+--------+--------+-------+-----------+------------------+---------+ |Finance costs | (1,535) | - | - | - | - | - | - | (1,535) | +--------------+---------+-------+--------+--------+-------+-----------+------------------+---------+ |Profit before | | | | | | | | | |taxation | 13,333 | (19) | 50 | (49) | - | (27) | - | 13,288 | +--------------+---------+-------+--------+--------+-------+-----------+------------------+---------+ |Taxation | (4,507) | 6 | (16) | 14 | - | 8 | - | (4,495) | +--------------+---------+-------+--------+--------+-------+-----------+------------------+---------+ |Profit | | | | | | | | | |attributable | | | | | | | | | |to equity | | | | | | | | | |shareholders | 8,826 | (13) | 34 | (35) | - | (19) | - | 8,793 | +--------------+---------+-------+--------+--------+-------+-----------+------------------+---------+ IFRS income statement for 52 weeks ended 25 June 2005 +------------+---------+-------+--------+--------+------+-----------+------------------+---------+ | #'000 |UK GAAP |SIC15 |IFRS2 |IAS19 |IAS 12|IAS2 |Reclass-ifications|IFRS | | | |Leases |Share |Employee|Income|Inventories| | | | | | |based |Benefits|Taxes | | | | | | | |payments| | | | | | +------------+---------+-------+--------+--------+------+-----------+------------------+---------+ |Reference | |a |b |d |e |g | | | | | | | | | | | | | +------------+---------+-------+--------+--------+------+-----------+------------------+---------+ |Revenue |187,704 | - | - | - | - | - | - |187,704 | +------------+---------+-------+--------+--------+------+-----------+------------------+---------+ |Cost of |(91,257) | - | - | - | - | (19) | - |(91,276) | |sales | | | | | | | | | +------------+---------+-------+--------+--------+------+-----------+------------------+---------+ |Gross profit| 96,447 | - | - | - | - | (19) | - | 96,428 | +------------+---------+-------+--------+--------+------+-----------+------------------+---------+ |Operating | | | | | | | | | |expenses |(85,273) | 133 | (24) | (165) | - | - | 188 |(85,141) | +------------+---------+-------+--------+--------+------+-----------+------------------+---------+ |Exceptional | | | | | | | | | |items | (1,658) | - | - | - | - | - | - | (1,658) | +------------+---------+-------+--------+--------+------+-----------+------------------+---------+ |Total | | | | | | | | | |operating | | | | | | | | | |expenses |(86,931) | 133 | (24) | (165) | - | - | 188 |(86,799) | +------------+---------+-------+--------+--------+------+-----------+------------------+---------+ |Other | | | | | | | | | |operating | | | | | | | | | |income | 816 | - | - | - | - | - | - | 816 | +------------+---------+-------+--------+--------+------+-----------+------------------+---------+ |Operating | | | | | | | | | |profit | 10,332 | 133 | (24) | (165) | - | (19) | 188 | 10,445 | +------------+---------+-------+--------+--------+------+-----------+------------------+---------+ |Other income| 188 | - | - | - | - | - | (188) | - | +------------+---------+-------+--------+--------+------+-----------+------------------+---------+ |Profit | | | | | | | | | |before | 10,520 | 133 | (24) | (165) | - | (19) | - | 10,445 | |interest | | | | | | | | | +------------+---------+-------+--------+--------+------+-----------+------------------+---------+ |Finance | 42 | - | - | - | - | - | - | 42 | |income | | | | | | | | | +------------+---------+-------+--------+--------+------+-----------+------------------+---------+ |Finance | (2,408) | - | - | - | - | - | - | (2,408) | |costs | | | | | | | | | +------------+---------+-------+--------+--------+------+-----------+------------------+---------+ |Profit | | | | | | | | | |before | 8,154 | 133 | (24) | (165) | - | (19) | - | 8,079 | |taxation | | | | | | | | | +------------+---------+-------+--------+--------+------+-----------+------------------+---------+ |Taxation | (2,584) | (40) | 38 | 50 | - | 7 | - | (2,529) | +------------+---------+-------+--------+--------+------+-----------+------------------+---------+ |Profit | | | | | | | | | |attributable| | | | | | | | | |to equity | | | | | | | | | |shareholders| 5,570 | 93 | 14 | (115) | - | (12) | - | 5,550 | +------------+---------+-------+--------+--------+------+-----------+------------------+---------+ Consolidated balance sheet as at 27 June 2004 +-------------+--------+-------+--------+---------+--------+------+-----------+----------+------------------+--------+ | #'000 | UK GAAP| SIC15| IFRS2| IAS 10| IAS19|IAS 12| IAS2| IAS 38|Reclass-ifications| IFRS| | | | Leases| Share|Dividends|Employee|Income|Inventories|Intangible| | | | | | | based| |Benefits| Taxes| | Assets| | | | | | |payments| | | | | | | | +-------------+--------+-------+--------+---------+--------+------+-----------+----------+------------------+--------+ |Reference | |a |b |c |d |e | g|h | | | +-------------+--------+-------+--------+---------+--------+------+-----------+----------+------------------+--------+ |Non-current | | | | | | | | | | | |assets | | | | | | | | | | | +-------------+--------+-------+--------+---------+--------+------+-----------+----------+------------------+--------+ |Property, | | | | | | | | | | | |plant and | | | | | | | | | | | |equipment |80,329 | - | - | - | - | - | - | (5,311) | - |75,018 | +-------------+--------+-------+--------+---------+--------+------+-----------+----------+------------------+--------+ |Intangible | | | | | | | | | | | |assets | - | - | - | - | - | - | - | 5,311 | - | 5,311 | +-------------+--------+-------+--------+---------+--------+------+-----------+----------+------------------+--------+ | |80,329 | - | - | - | - | - | - | - | - |80,329 | +-------------+--------+-------+--------+---------+--------+------+-----------+----------+------------------+--------+ |Current | | | | | | | | | | | |assets | | | | | | | | | | | +-------------+--------+-------+--------+---------+--------+------+-----------+----------+------------------+--------+ |Inventories |18,912 | - | - | - | - | - | (152) | - | - |18,760 | +-------------+--------+-------+--------+---------+--------+------+-----------+----------+------------------+--------+ |Trade and | | | | | | | | | | | |other | | | | | | | | | | | |receivables |12,818 | - | - | - | (436) | - | - | - | - |12,382 | +-------------+--------+-------+--------+---------+--------+------+-----------+----------+------------------+--------+ |Cash and cash| | | | | | | | | | | |equivalents | 1,599 | - | - | - | - | - | - | - | - | 1,599 | +-------------+--------+-------+--------+---------+--------+------+-----------+----------+------------------+--------+ | |33,329 | - | - | - | (436) | - | (152) | - | - |32,741 | +-------------+--------+-------+--------+---------+--------+------+-----------+----------+------------------+--------+ |Current | | | | | | | | | | | |liabilities | | | | | | | | | | | +-------------+--------+-------+--------+---------+--------+------+-----------+----------+------------------+--------+ |Borrowings |(13,571)| - | - | - | - | - | - | - | 777 |(12,794)| | | | | | | | | | | | | +-------------+--------+-------+--------+---------+--------+------+-----------+----------+------------------+--------+ |Trade and | | | | | | | | | | | |other |(33,954)| (140) | (83) | 3,157 | - | - | - | - | (777) |(31,797)| |payables | | | | | | | | | | | +-------------+--------+-------+--------+---------+--------+------+-----------+----------+------------------+--------+ |Corporation | | | | | | | | | | | |tax | | | | | | | | | | | |liabilities |(1,373) | - | - | - | - | - | - | - | - |(1,373) | +-------------+--------+-------+--------+---------+--------+------+-----------+----------+------------------+--------+ | |(48,898)| (140) | (83) | 3,157 | - | - | - | - | - |(45,964)| | | | | | | | | | | | | +-------------+--------+-------+--------+---------+--------+------+-----------+----------+------------------+--------+ |Net current | | | | | | | | | | | |liabilities |(15,569)| (140) | (83) | 3,157 | (436) | - | (152) | - | - |(13,223)| | | | | | | | | | | | | +-------------+--------+-------+--------+---------+--------+------+-----------+----------+------------------+--------+ |Non-current | | | | | | | | | | | |liabilities | | | | | | | | | | | +-------------+--------+-------+--------+---------+--------+------+-----------+----------+------------------+--------+ |Borrowings |(14,022)| - | - | - | - | - | - | - | 776 |(13,246)| | | | | | | | | | | | | +-------------+--------+-------+--------+---------+--------+------+-----------+----------+------------------+--------+ |Other | (546) |(1,183)| 38 | - |(15,287)| - | - | - | (776) |(17,754)| |payables | | | | | | | | | | | +-------------+--------+-------+--------+---------+--------+------+-----------+----------+------------------+--------+ |Deferred tax | | | | | | | | | | | |provision |(8,562) | 397 | 176 | - | 4,717 | (56) | 46 | - | - |(3,282) | +-------------+--------+-------+--------+---------+--------+------+-----------+----------+------------------+--------+ |Onerous lease| | | | | | | | | | | |provision | (224) | - | - | - | - | - | - | - | - | (224) | +-------------+--------+-------+--------+---------+--------+------+-----------+----------+------------------+--------+ |Non-current | | | | | | | | | | | |liabilities |(23,354)| (786) | 214 | - |(10,570)| (56) | 46 | - | - |(34,506)| | | | | | | | | | | | | +-------------+--------+-------+--------+---------+--------+------+-----------+----------+------------------+--------+ |Net assets |41,406 | (926) | 131 | 3,157 |(11,006)| (56) | (106) | - | - |32,600 | | | | | | | | | | | | | +-------------+--------+-------+--------+---------+--------+------+-----------+----------+------------------+--------+ | | | | | | | | | | | | +-------------+--------+-------+--------+---------+--------+------+-----------+----------+------------------+--------+ |Capital and | | | | | | | | | | | |reserves | | | | | | | | | | | +-------------+--------+-------+--------+---------+--------+------+-----------+----------+------------------+--------+ |Ordinary | 6,663 | - | - | - | - | - | - | - | - | 6,663 | |shares | | | | | | | | | | | +-------------+--------+-------+--------+---------+--------+------+-----------+----------+------------------+--------+ |Share premium|12,483 | - | - | - | - | - | - | - | - |12,483 | +-------------+--------+-------+--------+---------+--------+------+-----------+----------+------------------+--------+ |Revaluation | | | | | | | | | | | |reserves | 186 | - | - | - | - | - | - | - | (186) | - | +-------------+--------+-------+--------+---------+--------+------+-----------+----------+------------------+--------+ |Retained | | | | | | | | | | | |earnings |24,384 | (926) | 131 | 3,157 |(11,006)| (56) | (106) | - | (2,124) |13,454 | | | | | | | | | | | | | +-------------+--------+-------+--------+---------+--------+------+-----------+----------+------------------+--------+ |Investment in| | | | | | | | | | | |own shares |(2,310) | - | - | - | - | - | - | - | 2,310 | - | +-------------+--------+-------+--------+---------+--------+------+-----------+----------+------------------+--------+ |Equity | | | | | | | | | | | |shareholders'| | | | | | | | | | | |funds |41,406 | (926) | 131 | 3,157 |(11,006)| (56) | (106) | - | - |32,600 | | | | | | | | | | | | | +-------------+--------+-------+--------+---------+--------+------+-----------+----------+------------------+--------+ Consolidated balance sheet as at 8 January 2005 +-------------+--------+-------+--------+---------+--------+------+-----------+----------+------------------+--------+ | #'000 | UK GAAP| SIC15| IFRS2| IAS 10| IAS19|IAS 12| IAS2| IAS 38|Reclass-ifications| IFRS| | | | Leases| Share|Dividends|Employee|Income|Inventories|Intangible| | | | | | | based| |Benefits| Taxes| | Assets| | | | | | |payments| | | | | | | | +-------------+--------+-------+--------+---------+--------+------+-----------+----------+------------------+--------+ |Reference | |a |b |c |d |e |g |h | | | +-------------+--------+-------+--------+---------+--------+------+-----------+----------+------------------+--------+ |Non-current | | | | | | | | | | | |assets | | | | | | | | | | | +-------------+--------+-------+--------+---------+--------+------+-----------+----------+------------------+--------+ |Property, | | | | | | | | | | | |plant and | | | | | | | | | | | |equipment |79,810 | - | - | - | - | - | - | (6,667) | - |73,143 | +-------------+--------+-------+--------+---------+--------+------+-----------+----------+------------------+--------+ |Intangible | | | | | | | | | | | |assets | - | - | - | - | - | - | - | 6,667 | - | 6,667 | +-------------+--------+-------+--------+---------+--------+------+-----------+----------+------------------+--------+ | |79,810 | - | - | - | - | - | - | - | - |79,810 | +-------------+--------+-------+--------+---------+--------+------+-----------+----------+------------------+--------+ |Current | | | | | | | | | | | |assets | | | | | | | | | | | +-------------+--------+-------+--------+---------+--------+------+-----------+----------+------------------+--------+ |Inventories |15,217 | - | - | - | - | - | (179) | - | - |15,038 | +-------------+--------+-------+--------+---------+--------+------+-----------+----------+------------------+--------+ |Trade and | | | | | | | | | | | |other | | | | | | | | | | | |receivables |16,412 | - | - | - | (666) | - | - | - | - |15,746 | +-------------+--------+-------+--------+---------+--------+------+-----------+----------+------------------+--------+ |Cash and cash| | | | | | | | | | | |equivalents |17,165 | - | - | - | - | - | - | - | - |17,165 | +-------------+--------+-------+--------+---------+--------+------+-----------+----------+------------------+--------+ | |48,794 | - | - | - | (666) | - | (179) | - | - |47,949 | +-------------+--------+-------+--------+---------+--------+------+-----------+----------+------------------+--------+ |Current | | | | | | | | | | | |liabilities | | | | | | | | | | | +-------------+--------+-------+--------+---------+--------+------+-----------+----------+------------------+--------+ |Borrowings |(17,809)| - | - | - | - | - | - | - | 956 |(16,853)| | | | | | | | | | | | | +-------------+--------+-------+--------+---------+--------+------+-----------+----------+------------------+--------+ |Trade and | | | | | | | | | | | |other |(33,626)| (148) | (50) | 1,300 | - | - | - | - | (956) |(33,480)| |payables | | | | | | | | | | | +-------------+--------+-------+--------+---------+--------+------+-----------+----------+------------------+--------+ |Corporation | | | | | | | | | | | |tax | | | | | | | | | | | |liabilities |(3,215) | - | - | - | - | - | - | - | - |(3,215) | +-------------+--------+-------+--------+---------+--------+------+-----------+----------+------------------+--------+ | |(54,650)| (148) | (50) | 1,300 | - | - | - | - | - |(53,548)| | | | | | | | | | | | | +-------------+--------+-------+--------+---------+--------+------+-----------+----------+------------------+--------+ |Net current | | | | | | | | | | | |liabilities |(5,856) | (148) | (50) | 1,300 | (666) | - | (179) | - | - |(5,599) | +-------------+--------+-------+--------+---------+--------+------+-----------+----------+------------------+--------+ |Non-current | | | | | | | | | | | |liabilities | | | | | | | | | | | +-------------+--------+-------+--------+---------+--------+------+-----------+----------+------------------+--------+ |Borrowings |(13,801)| - | - | - | - | - | - | - | 955 |(12,846)| | | | | | | | | | | | | +-------------+--------+-------+--------+---------+--------+------+-----------+----------+------------------+--------+ |Other | (669) |(1,195)| 33 | - |(17,065)| - | - | - | (955) |(19,851)| |payables | | | | | | | | | | | +-------------+--------+-------+--------+---------+--------+------+-----------+----------+------------------+--------+ |Deferred tax | | | | | | | | | | | |provision |(10,165)| 403 | 148 | - | 5,319 | (56) | 54 | - | - |(4,297) | | | | | | | | | | | | | +-------------+--------+-------+--------+---------+--------+------+-----------+----------+------------------+--------+ |Onerous lease| | | | | | | | | | | |provision | (222) | - | - | - | - | - | - | - | - | (222) | +-------------+--------+-------+--------+---------+--------+------+-----------+----------+------------------+--------+ |Non-current | | | | | | | | | | | |liabilities |(24,857)| (792) | 181 | - |(11,746)| (56) | 54 | - | - |(37,216)| | | | | | | | | | | | | +-------------+--------+-------+--------+---------+--------+------+-----------+----------+------------------+--------+ |Net assets |49,097 | (940) | 131 | 1,300 |(12,412)| (56) | (125) | - | - |36,995 | | | | | | | | | | | | | +-------------+--------+-------+--------+---------+--------+------+-----------+----------+------------------+--------+ | | | | | | | | | | | | +-------------+--------+-------+--------+---------+--------+------+-----------+----------+------------------+--------+ |Capital and | | | | | | | | | | | |reserves | | | | | | | | | | | +-------------+--------+-------+--------+---------+--------+------+-----------+----------+------------------+--------+ |Ordinary | 6,666 | - | - | - | - | - | - | - | - | 6,666 | |shares | | | | | | | | | | | +-------------+--------+-------+--------+---------+--------+------+-----------+----------+------------------+--------+ |Share premium|12,505 | - | - | - | - | - | - | - | - |12,505 | +-------------+--------+-------+--------+---------+--------+------+-----------+----------+------------------+--------+ |Revaluation | | | | | | | | | | | |reserves | 186 | - | - | - | - | - | - | - | (186) | - | +-------------+--------+-------+--------+---------+--------+------+-----------+----------+------------------+--------+ |Profit and | | | | | | | | | | | |loss account |32,050 | (940) | 131 | 1,300 |(12,412)| (56) | (125) | - | (2,124) |17,824 | | | | | | | | | | | | | +-------------+--------+-------+--------+---------+--------+------+-----------+----------+------------------+--------+ |Investment in| | | | | | | | | | | |own shares |(2,310) | - | - | - | - | - | - | - | 2,310 | - | +-------------+--------+-------+--------+---------+--------+------+-----------+----------+------------------+--------+ |Equity | | | | | | | | | | | |shareholders'| | | | | | | | | | | |funds |49,097 | (940) | 131 | 1,300 |(12,412)| (56) | (125) | - | - |36,995 | | | | | | | | | | | | | +-------------+--------+-------+--------+---------+--------+------+-----------+----------+------------------+--------+ Consolidated balance sheet as at 25 June 2005 +-------------+--------+-------+--------+---------+--------+------+-----------+----------+------------------+--------+ | #'000 | UK GAAP| SIC15| IFRS2| IAS 10| IAS19|IAS 12| IAS2| IAS 38|Reclass-ifications| IFRS| | | | Leases| Share|Dividends|Employee|Income|Inventories|Intangible| | | | | | | based| |Benefits| Taxes| | Assets| | | | | | |payments| | | | | | | | +-------------+--------+-------+--------+---------+--------+------+-----------+----------+------------------+--------+ |Reference | |a |B |c |d |e |g |h | | | +-------------+--------+-------+--------+---------+--------+------+-----------+----------+------------------+--------+ |Non-current | | | | | | | | | | | |assets | | | | | | | | | | | +-------------+--------+-------+--------+---------+--------+------+-----------+----------+------------------+--------+ |Property, | | | | | | | | | | | |plant and | | | | | | | | | | | |equipment |79,544 | - | - | - | - | - | - | (7,460) | - |72,084 | +-------------+--------+-------+--------+---------+--------+------+-----------+----------+------------------+--------+ |Intangible | | | | | | | | | | | |assets | - | - | - | - | - | - | - | 7,460 | - | 7,460 | +-------------+--------+-------+--------+---------+--------+------+-----------+----------+------------------+--------+ | |79,544 | - | - | - | - | - | - | - | - |79,544 | +-------------+--------+-------+--------+---------+--------+------+-----------+----------+------------------+--------+ |Current | | | | | | | | | | | |assets | | | | | | | | | | | +-------------+--------+-------+--------+---------+--------+------+-----------+----------+------------------+--------+ |Inventories |17,958 | - | - | - | - | - | (171) | - | - |17,787 | +-------------+--------+-------+--------+---------+--------+------+-----------+----------+------------------+--------+ |Trade and | | | | | | | | | | | |other | | | | | | | | | | | |receivables |13,592 | 25 | - | - | (844) | - | - | - | - |12,773 | +-------------+--------+-------+--------+---------+--------+------+-----------+----------+------------------+--------+ |Cash and cash| | | | | | | | | | | |equivalents | 874 | - | - | - | - | - | - | - | - | 874 | +-------------+--------+-------+--------+---------+--------+------+-----------+----------+------------------+--------+ | |32,424 | 25 | - | - | (844) | - | (171) | - | - |31,434 | +-------------+--------+-------+--------+---------+--------+------+-----------+----------+------------------+--------+ |Current | | | | | | | | | | | |liabilities | | | | | | | | | | | +-------------+--------+-------+--------+---------+--------+------+-----------+----------+------------------+--------+ |Borrowings |(23,513)| - | - | - | - | - | - | - | 780 |(22,733)| | | | | | | | | | | | | +-------------+--------+-------+--------+---------+--------+------+-----------+----------+------------------+--------+ |Trade and | | | | | | | | | | | |other |(27,773)| (124) | (60) | 3,189 | - | - | - | - | (780) |(25,548)| |payables | | | | | | | | | | | +-------------+--------+-------+--------+---------+--------+------+-----------+----------+------------------+--------+ |Corporation | | | | | | | | | | | |tax | | | | | | | | | | | |liabilities |(1,616) | - | - | - | - | - | - | - | - |(1,616) | +-------------+--------+-------+--------+---------+--------+------+-----------+----------+------------------+--------+ | |(52,902)| (124) | (60) | 3,189 | - | - | - | - | - |(49,897)| | | | | | | | | | | | | +-------------+--------+-------+--------+---------+--------+------+-----------+----------+------------------+--------+ |Net current | | | | | | | | | | | |liabilities |(20,478)| (99) | (60) | 3,189 | (844) | - | (171) | - | - |(18,463)| | | | | | | | | | | | | +-------------+--------+-------+--------+---------+--------+------+-----------+----------+------------------+--------+ |Non-current | | | | | | | | | | | |liabilities | | | | | | | | | | | +-------------+--------+-------+--------+---------+--------+------+-----------+----------+------------------+--------+ |Borrowings |(6,532) | - | - | - | - | - | - | - | - |(6,532) | +-------------+--------+-------+--------+---------+--------+------+-----------+----------+------------------+--------+ |Other | (715) |(1,091)| 23 | - |(18,997)| - | - | - | - |(20,780)| |payables | | | | | | | | | | | +-------------+--------+-------+--------+---------+--------+------+-----------+----------+------------------+--------+ |Deferred tax | | | | | | | | | | | |provision |(8,474) | 357 | 176 | - | 5,952 | (55) | 52 | - | - |(1,992) | +-------------+--------+-------+--------+---------+--------+------+-----------+----------+------------------+--------+ |Onerous lease| | | | | | | | | | | |provision | (617) | - | - | - | - | - | - | - | - | (617) | +-------------+--------+-------+--------+---------+--------+------+-----------+----------+------------------+--------+ |Non-current | | | | | | | | | | | |liabilities |(16,338)| (734) | 199 | - |(13,045)| (55) | 52 | - | - |(29,921)| | | | | | | | | | | | | +-------------+--------+-------+--------+---------+--------+------+-----------+----------+------------------+--------+ |Net assets |42,728 | (833) | 139 | 3,189 |(13,889)| (55) | (119) | - | - |31,160 | | | | | | | | | | | | | +-------------+--------+-------+--------+---------+--------+------+-----------+----------+------------------+--------+ | | | | | | | | | | | | +-------------+--------+-------+--------+---------+--------+------+-----------+----------+------------------+--------+ |Capital and | | | | | | | | | | | |reserves | | | | | | | | | | | +-------------+--------+-------+--------+---------+--------+------+-----------+----------+------------------+--------+ |Share capital| 6,669 | - | - | - | - | - | - | - | - | 6,669 | +-------------+--------+-------+--------+---------+--------+------+-----------+----------+------------------+--------+ |Share premium|12,528 | - | - | - | - | - | - | - | - |12,528 | +-------------+--------+-------+--------+---------+--------+------+-----------+----------+------------------+--------+ |Revaluation | | | | | | | | | | | |reserves | 183 | - | - | - | - | - | - | - | (183) | - | +-------------+--------+-------+--------+---------+--------+------+-----------+----------+------------------+--------+ |Profit and | | | | | | | | | | | |loss account |23,348 | (833) | 139 | 3,189 |(13,889)| (55) | (119) | - | 183 |11,963 | | | | | | | | | | | | | +-------------+--------+-------+--------+---------+--------+------+-----------+----------+------------------+--------+ |Equity | | | | | | | | | | | |shareholders'| | | | | | | | | | | |funds |42,728 | (833) | 139 | 3,189 |(13,889)| (55) | (119) | - | - |31,160 | | | | | | | | | | | | | +-------------+--------+-------+--------+---------+--------+------+-----------+----------+------------------+--------+ Independent review report to Thorntons PLC Introduction We have been instructed by the company to review the financial information for the 28 weeks ended 7 January 2006 which comprises the consolidated income statement, consolidated balance sheet, consolidated statement of income and expense, consolidated statement of cash flows and the related notes. We have read the other information contained in the interim report and considered whether it contains any apparent misstatements or material inconsistencies with the financial information. Directors' responsibilities The interim report, including the financial information contained therein, is the responsibility of, and has been approved by the directors. The directors are responsible for preparing the interim report in accordance with the Listing Rules of the Financial Services Authority. As disclosed in note 1, the next annual financial statements of the group will be prepared in accordance with accounting standards adopted by the European Union. This interim report has been prepared in accordance with the basis set out in Note 1. The accounting policies are consistent with those that the directors intend to use in the next annual financial statements. As explained in note 1, there is, however, a possibility that the directors may determine that some changes are necessary when preparing the full annual financial statements for the first time in accordance with accounting standards adopted by the European Union. The IFRS standards and IFRIC interpretations that will be applicable and adopted by the European Union at 24 June 2006 are not known with certainty at the time of preparing this interim financial information. Review work performed We conducted our review in accordance with guidance contained in Bulletin 1999/4 issued by the Auditing Practices Board for use in the United Kingdom. A review consists principally of making enquiries of group management and applying analytical procedures to the financial information and underlying financial data and, based thereon, assessing whether the disclosed accounting policies have been applied. A review excludes audit procedures such as tests of controls and verification of assets, liabilities and transactions. It is substantially less in scope than an audit and therefore provides a lower level of assurance. Accordingly we do not express an audit opinion on the financial information. This report, including the conclusion, has been prepared for and only for the company for the purpose of the Listing Rules of the Financial Services Authority and for no other purpose. We do not, in producing this report, accept or assume responsibility for any other purpose or to any other person to whom this report is shown or into whose hands it may come save where expressly agreed by our prior consent in writing. Review conclusion On the basis of our review we are not aware of any material modifications that should be made to the financial information as presented for the 28 weeks ended 7 January 2006. PricewaterhouseCoopers LLP Chartered Accountants Leeds 21 February 2006 Notes (a) The maintenance and integrity of the Thorntons PLC web site is the responsibility of the directors; the work carried out by the auditors does not involve consideration of these matters and accordingly, the auditors accept no responsibility for any changes that may have occurred to the interim report since it was initially presented on the web site. (b) Legislation in the United Kingdom governing the preparation and dissemination of financial information may differ from legislation in other jurisdictions. This information is provided by RNS The company news service from the London Stock Exchange END IR PUUWCPUPQGRU
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