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Share Name | Share Symbol | Market | Type | Share ISIN | Share Description |
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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:0053S Thorntons PLC 26 February 2002 For Immediate Release 26 February 2002 THORNTONS PLC ANNOUNCEMENT OF INTERIM RESULTS FOR 28 WEEKS ENDED 12 JANUARY 2002 (UNAUDITED) Thorntons, the specialist retailer and manufacturer of high quality chocolate, toffee and other confectionery, today reports its Interim Results for the 28 weeks ended 12 January 2002. Financial Highlights Results before property gains/losses* 2002 2001 Turnover £102.4m £99.4m Operating profit £12.4m £11.9m Profit before tax £10.3m £ 9.4m Earnings per share 10.60p 10.61p Operating cash flows £19.8m £18.9m Dividend per share 1.95p 1.95p *Property gains/losses include profit/loss on disposal of fixed assets and movements on onerous lease provisions. • Total Turnover up 3.0% • Own shop like-for-like +4.1% over the 28 weeks • Gross Margins up to 54.7% from 53.0% • Underlying profit before tax +9.2% • Operating Cash Flow +5.1% • Gearing reduced by strong cash flow • Sweet special food royalties on stream • Impulse bar distribution agreed with Tesco • Valentines Day like-for-like + 4.0% Results after property gains/losses 2002 2001 Operating profit £12.0m £12.5m Profit before tax £ 9.9m £10.0m Earnings per share 10.16p 11.22p Commenting Peter Burdon, Chief Executive, said: "We are very pleased to report that our performance in the 28 weeks clearly demonstrates that the business has been stabilised. Good progress on the organic growth initiatives is also well underway and we plan to set out more of our longer term growth plans in September with our preliminary results." For further information, please contact: Peter Burdon - Chief Executive, Thorntons PLC 01773 540550 Martin Allen - Finance Director, Thorntons PLC 01773 540550 Charles Ryland / Catherine Miles - Buchanan Communications 020 7466 5000 Business review We outlined, some 18 months ago, a 3 year strategy to turnaround the company. The first phase was to stabilise and focus. The second phase was to accelerate organic growth opportunities and then, finally, to look at developing longer term growth options. We are very pleased to report to you that our performance in the 28 weeks to 12 January 2002, as set out below, clearly demonstrates that the business has been stabilised. Good progress on the organic growth initiatives is also well underway and we plan to set out more of our longer term growth plans in September with our preliminary results. Sales In the 28 weeks, to 12 January 2002, overall sales increased by 3.0% to £102.4m but this encouraging improvement understates some of the progress made. We trimmed back the Own Shop estate, a net reduction of 18 to 394, but still grew total own shop sales by +2.1%. A more exciting events programme, better products and good in-store management helped to drive up like-for-like sales in the 28 weeks by 4.1% (compared with 0.4% in the same period last year). Christmas was very buoyant with like-for-like sales up 8.0% for the 7 weeks to 29th December (compared with 0.6% last year). We are pleased to report that the like-for-like performance for the first 5 weeks of the second half is up +2.6% with +4.0% for Valentines Day. The plan to expand Franchise locations is ahead of our expectations with 33 net new sites opened over the last 12 months making a total of 181 sites, helping to contribute to a 30.9% sales increase for our franchise business. Commercial sales were down by £1.6m to £9.2m, with the majority of this reduction being sales of non-Thorntons branded, lower margin products. We also transferred some corporate, branded sales into Mail Order in order to provide a better, more efficient and more personalised service. Including these transferred sales, E-commerce/Mail Order, which combines the traditional Thorntons confectionery offer with a greater gift choice, such as flowers and wine, doubled sales compared with the same period last year and is profitable. Margins As expected, gross profit margins improved in the 28 weeks from 53.0% to 54.7%. This improvement was driven by three factors. First, production levels returned to normal levels in the period compared to last year when the factory was somewhat under-utilised due to stock reductions. Second, we continued to reduce the number of events led by discounts and increased the emphasis on value added product offers. Finally, our work on range reduction contributed towards improved manufacturing efficiencies and increased sales of higher margin products. Selling and distribution costs did rise as a result of increased and well targeted marketing activity plus normal rent and rate reviews. Good internal controls kept most other cost rises to a minimum enabling the return on sales, after these costs, to increase from 18.2% to 19.3% in the 28 weeks. Cash Total net debt has decreased by 20.0% over the last 12 months to £30.3m. Operating cash flows improved by 5.1% to £19.8m and working capital reduced by £3.0m to again provide strong net cash inflow from operating activities of £22.8m in the 28 weeks. Capital expenditure remains under tight control and as a result cash on deposit in the UK rose from £6.5m in January 2001 to £13.9m. Gearing levels have fallen from 82.0% (restated) to 66.6%. Profit and Dividend Underlying operating profit, excluding one-off property gains and losses, rose from £11.9m to £12.4m. A significant reduction in interest costs helped to lift profit before tax, on the same basis, from £9.4m to £10.3m, up 9.2%. The tax rate charged in the 6 months was 32% up from an underlying 30% last year. After taking account of one-off property related gains and losses, which do not affect cashflow, profit before tax fell marginally to £9.9m from £10.0m. As a result of these property charges and the tax rise, basic earnings per share has fallen from 11.22p (restated) to 10.16p. Excluding the property items, earnings per share is unchanged. Your Board has therefore declared an unchanged interim dividend of 1.95 pence per share. The interim dividend will be paid on 30 April 2002 to shareholders on the register at close of business on 2 April 2002. Accounting standard changes Financial Reporting Standard 19, which requires full provision for deferred tax, has now been incorporated into the accounts and restatements of prior periods made, where applicable. The impact for the 28 weeks ended 6 January 2001 is a decrease in basic earnings per share from 11.56p to 11.22p, gearing increases from 68.3% to 82.0%, whilst net assets per share reduced from 83.30p to 69.40p. Strategic Initiatives In September we set out our vision to be: 'The UK's leading retailer and distributor of sweet special food' and outlined 5 strategic initiatives to set us on our way. 1. New Customer Proposition - 'Signature Stores' We have now opened all 9 planned stores; 8 of them operating over Christmas. We will formally evaluate them at the end of this month. We are generally pleased with the new concept as it is attracting a new and younger customer. Nevertheless, we have identified a number of additional opportunities to improve the proposition further. In the coming months, we will open a small number of additional stores, building in the current learning. 2. Product Range Optimisation The first stage of this initiative is largely complete. Over the last 6 months, we have reduced the total product range by around 20% and phased out the deleted lines without significant customer disappointment or write-off cost. We have now built a very strict 'one in one out' philosophy into our internal processes for new product introductions to avoid the over expansion of the product range in the future. We will continue to look for further range reduction opportunities. 3. Cafe Thorntons There are now 25 sites operating. These include new cafes into existing stores at Warrington and North Shields, where we have taken the opportunity to implement a number of improvements over the previous offer. We plan to refit 2 cafes in the summer as 'Signature Cafes'. These cafes will have a radically improved proposition, with enhanced service, a better food and drink offer and different layout to benefit customers and colleagues alike. 4. Licensed Products This new venture for Thorntons is in its infancy but the initial results confirm our view that our brand name fits very well onto a broad range of 'sweet special food'. The initial range of cakes and puddings only started to appear gradually on shelves from September 2001 but over the 13 weeks royalties totalled £56,000. We have a current range of 7 core products plus additional seasonal lines and have listings in most of the key supermarkets. Over the next few months, there will be new developments in biscuits, desserts and ice cream all meeting the same high quality standard that we have set in this sector of the growing premium food market. 5. Impulse Products We were pleased to announce that we had signed an initial agreement to begin to distribute a premium range of Thorntons branded chocolate bars through the 700 strong Tesco chain of stores. This marks a major step forwards in strategy, as it will prove that we can sell profitably the same Thorntons branded products through other outlets as well as our own stores. Products such as bars are purchased, largely, for immediate consumption and therefore availability to purchase is of greater importance than, for example, boxed chocolates purchased for a gift. Our overall share in this market is less than 0.5% and we believe there is a significant opportunity for us to increase this. Unlike the licensed cakes and puddings, these products are manufactured at Thornton Park helping to balance production capacity, especially outside the key seasons of Christmas and Easter. Prospects We have demonstrated that we have the business well under control with increasing sales, higher margins and lower borrowings. The organic growth initiatives are beginning to deliver with the promise of significant upside. We must leverage and build upon our competencies and assets if we are to realise our vision of becoming 'The UK's leading retailer and distributor of sweet special food'. There are many opportunities in front of us but we must carry out a full evaluation to ensure our future actions maximise shareholder value at a reasonable level of risk. We are now progressing with this evaluation and look forward to being able to outline the next phase of our strategy in September. John Thornton Peter Burdon Chairman Chief Executive 25 February 2002 25 February 2002 CONSOLIDATED PROFIT AND LOSS ACCOUNT Unaudited results for 28 weeks ended 12 January 2002 For 53 weeks For 28 weeks ended For 28 weeks ended ended 12 January 2002 6 January 2001 30 June 2001 Notes (unaudited) (restated) (restated) £'000 £'000 £'000 159,921 Turnover 2 102,384 99,422 (76,722) Cost of sales (46,419) (46,676) 83,199 Gross profit 55,965 52,746 (62,297) Other selling and distribution costs (36,183) (34,718) 584 Net release of onerous lease provisions 6 511 (61,713) Selling and distribution costs (36,177) (34,207) (11,427) Other administrative costs (7,572) (6,216) (73) (Loss)/profit on disposal of fixed assets (420) 70 (11,500) Administrative expenses (7,992) (6,146) 162 Other operating income 3 170 83 10,148 Operating profit 11,966 12,476 369 Interest receivable and similar income 67 189 (4,432) Interest payable and similar charges 4 (2,167) (2,666) 6,085 Profit on ordinary activities before taxation 9,866 9,999 (1,570) Tax on profit on ordinary activities 5 (3,157) (2,583) 4,515 Profit on ordinary activities after taxation 6,709 7,416 (4,490) Dividends 6 (1,288) (1,288) 25 Retained profit for the period 5,421 6,128 Key ratios (restated) 6.84p Basic earnings per ordinary share 7 10.16p 11.22p 6.83p Fully diluted earnings per ordinary share 7 10.12p 11.21p 6.80p Dividend per ordinary share 6 1.95p 1.95p Key ratios - as originally reported 6.99p Basic earnings per ordinary share n/a 11.56p 6.98p Fully diluted earnings per ordinary share n/a 11.55p Continuing operations All amounts above relate solely to continuing operations. Historical cost results There was no material difference between the result disclosed above and the result on an unmodified historical cost basis. Restatement of comparatives The adoption of FRS 19 'Deferred Tax', as explained in note 1, has resulted in changes to prior period reported results. Consolidated statement of total recognised gains and losses For 53 weeks ended For 28 weeks ended For 28 weeks ended 30 June 2001 12 January 2002 6 January 2001 £'000 £'000 £'000 4,515 Total recognised gains and losses for the 6,709 7,416 period - Prior period adjustment - FRS 19 (9,130) - 4,515 Total recognised gains and losses since last (2,421) 7,416 annual report CONSOLIDATED BALANCE SHEET As at 30 June 2001 As at 12 January As at 6 January 2001 (restated) 2002 (restated) £'000 £'000 £'000 Fixed assets 96,457 Tangible assets 91,287 100,368 290 Investments - purchase of own shares 290 290 96,747 91,577 100,658 Current assets 13,220 Stocks 14,662 14,364 9,024 Debtors 11,314 9,401 3,275 Cash at bank and in hand 17,658 9,032 25,519 43,634 32,797 Creditors: amounts falling due within one year (10,556) Bank loans, overdrafts and finance leases (10,843) (2,297) (23,686) Other creditors (31,151) (29,382) (34,242) (41,994) (31,679) (8,273) Net current assets/(liabilities) 1,640 1,118 88,024 Total assets less current liabilities 93,217 101,776 (37,234) Bank loans and finance leases falling due after (37,133) (44,611) one year (813) Other creditors falling due after one year (710) (1,097) (9,130) Deferred tax provision (9,130) (9,025) (750) Onerous lease provision (725) (843) 40,097 Net assets 45,519 46,200 Capital and reserves 6,656 Share capital 6,656 6,656 12,399 Share premium 12,400 12,399 505 Revaluation reserves 505 505 20,537 Profit and loss account 25,958 26,640 40,097 Equity shareholders' funds 45,519 46,200 Key ratios (restated) 44,515 Net debt 30,318 37,876 111.0% Gearing 66.6% 82.0% 60.25p Net assets per share 68.40p 69.40p Key ratios - as originally reported 90.4% Gearing n/a 68.3% 73.95p Net assets per share n/a 83.30p Movements in shareholders' funds For 53 weeks ended For 28 weeks ended For 28 weeks ended 30 June 2001 12 January 2002 6 January 2001 (restated) £'000 (restated) £'000 £'000 4,515 Profit after tax attributable to shareholders 6,709 7,416 (4,490) Dividends (1,288) (1,288) 25 Retained profit attributable to shareholders 5,421 6,128 - New share capital issued 1 - 25 Net increase in shareholders' funds 5,422 6,128 49,097 Opening shareholders' funds - as originally 49,227 49,097 reported (9,025) Prior period adjustment - FRS 19 (9,130) (9,025) 40,072 Opening shareholders' funds - as restated 40,097 40,072 40,097 Closing shareholders' funds 45,519 46,200 CONSOLIDATED CASH FLOW STATEMENT Unaudited results for 28 weeks ended 12 January 2002 For 53 For 28 weeks For 28 weeks weeks ended ended ended Note 12 January 2002 6 January 2001 30 June £'000 £'000 2001 £'000 21,117 Cash inflow from operating activities 8 22,794 22,050 (4,155) Returns on investments and servicing of finance (2,035) (2,397) 902 Taxation (575) 1,305 (1,587) Capital expenditure and financial investment (1,140) (1,271) (4,492) Equity dividends paid (3,204) (3,204) 11,785 Cash inflow before use of liquid resources and 15,840 16,483 financing 264 Management of liquid resources (13,871) (6,237) - Financing - issue of shares 1 - (10,716) Financing - decrease in debt (1,499) (9,547) 1,333 Increase in cash in the period 471 699 Reconciliation of net cash flow to movement in net debt For 53 weeks For 28 weeks For 28 weeks ended ended ended 30 June 12 January 6 January 2001 2002 2001 £'000 £'000 £'000 1,333 Increase in cash in the period 471 699 10,716 Cash outflow from decrease in debt 1,499 9,547 (264) Cash outflow from increase in liquid resources 13,871 6,237 11,785 Change in net debt resulting from cash flows 15,841 16,483 (4,168) Inception of new finance leases (1,685) (2,117) 141 Translation difference 41 31 7,758 Movement in net debt in the period 14,197 14,397 (52,273) Net debt at beginning of period (44,515) (52,273) (44,515) Net debt at end of period (30,318) (37,876) Analysis of net debt Group: for the 28 weeks At 30 June Cash flow Other non-cash Exchange At 12 January ended 12 January 2002 2001 £'000 changes movement 2002 £'000 £'000 £'000 £'000 Cash at bank and in hand 3,275 471 - 41 3,787 Debt due within one year (7,915) - - - (7,915) Debt due after one year (31,659) - - - (31,659) Finance leases (8,216) 1,499 (1,685) - (8,402) (47,790) 1,499 (1,685) - (47,976) Cash on deposit - 13,871 - - 13,871 Total net debt (44,515) 15,841 (1,685) 41 (30,318) Group: for the 28 weeks At 24 June Cash flow Other non-cash Exchange At 6 January ended 6 January 2001 2000 changes movement 2001 £'000 £'000 £'000 £'000 £'000 Cash at bank and in hand 1,801 699 - 31 2,531 Debt due within one year (8,350) 8,350 - - - Debt due after one year (39,574) - - - (39,574) Finance leases (6,414) 1,197 (2,117) - (7,334) (54,338) 9,547 (2,117) - (46,908) Cash on deposit 264 6,237 - - 6,501 Total net debt (52,273) 16,483 (2,117) 31 (37,876) Notes to the interim financial statements 1. Basis of preparation of the interim financial statements The unaudited interim financial statements, which are abridged, have been prepared on the basis of accounting policies set out in the Annual Report 2001 after giving effect to the adoption of FRS 19 'Deferred Tax'. The consolidated balance sheet as at 30 June 2001, the consolidated profit and loss account and consolidated cash flow statement for the 53 weeks ended 30 June 2001 are extracts from the Annual Report 2001, which has been delivered to the Registrar of Companies, as restated for assets and liabilities in respect of provisions for deferred tax, in accordance with FRS 19. The auditors' report in the Annual Report 2001 was unqualified and did not contain a statement under Section 237 of the Companies Act 1985. In these interim financial statements, FRS 19 'Deferred Tax' has been adopted for the first time. As a result the opening balances and comparatives for the 28 weeks ended 6 January 2001 and the 53 weeks ended 30 June 2001 have been restated. This is to provide for full provision of deferred tax arising from timing differences between the recognition of gains and losses in the financial statements and their recognition in a tax computation. 2. Segmental analysis The Group's continuing activities arise from UK operations only. 3. Other operating income For 53 weeks ended For 28 weeks ended For 28 weeks ended 30 June 2001 12 January 2002 6 January 2001 £'000 £'000 £'000 106 Rents receivable 59 55 56 Franchise license fees 55 28 - Licensing royalties 56 - 162 Other operating income 170 83 4. Interest payable and similar charges For 53 weeks ended For 28 weeks ended For 28 weeks ended 30 June 2001 12 January 2002 6 January 2001 £'000 £'000 £'000 768 Borrowings wholly repayable within one year 254 736 3,078 Unsecured loan note interest payable 1,600 1,630 13 Exchange differences and other interest - 12 573 Interest on finance lease repayments 313 288 4,432 Interest payable and similar charges 2,167 2,666 5. Tax on profit on ordinary activities For 53 weeks ended For 28 weeks ended For 28 weeks ended 30 June 2001 12 January 2002 6 January 2001 (restated) (restated) £'000 £'000 £'000 1,734 UK corporation tax on profits of the period 3,155 2,876 175 Onerous leases taxation 2 153 (444) Adjustments in respect of previous periods - (447) 1,465 Total UK corporation tax 3,157 2,582 - Overseas taxation - 1 1,465 Total current tax 3,157 2,583 105 Total deferred tax - - 1,570 Tax on profit on ordinary activities 3,157 2,583 The tax on profit on ordinary activities, including deferred tax, for the 28 weeks ended 12 January 2002 is based on the estimated effective rate for the full period. 6. Dividends The Directors have declared an interim dividend of 1.95 pence per share (2001: 1.95 pence per share), which amounts to approximately £1,288,000 (2001: £1,288,000). The dividend will be paid on 30 April 2002 to shareholders registered on 2 April 2002. The shares will be quoted ex-dividend on 27 March 2002. 7. Earnings per share The calculations of earnings per share are based on the following profits after taxation and numbers of shares: 2002 2002 2002 2001 2001 2001 Results Basic Fully diluted Results Basic Fully diluted £'000 earnings Earnings (restated) earnings earnings per share Per share £'000 per share per share (restated) (restated) Profit before onerous leases 6,705 10.15p 10.11p 7,058 10.68p 10.67p credit Onerous leases credit 4 0.01p 0.01p 358 0.54p 0.54p Profit on ordinary activities 6,709 10.16p 10.12p 7,416 11.22p 11.21p Weighted average number of shares: 2002 2001 Number of Number of Ordinary Shares Ordinary Shares Basic weighted average number of ordinary shares 66,057,578 66,056,697 Dilutive effect from share options* 236,919 59,187 Fully diluted weighted average number of ordinary shares 66,294,497 66,115,884 *Average market price of the Group's shares during the period £0.9088 £0.9068 8. Reconciliation of operating profit to operating cash flows For 53 weeks ended For 28 weeks ended For 28 weeks ended 30 June 2001 12 January 2002 6 January 2001 £'000 £'000 £'000 10,148 Operating profit 11,966 12,476 73 Loss/(profit) on disposal of fixed assets 420 (70) 13,117 Depreciation charges 7,447 6,977 (584) Non-cash movements in provisions (6) (511) 22,754 Operating cash flows before working capital 19,827 18,872 movements (107) Cash flows relating to previous years provisions (19) (87) 3,781 (Increase)/decrease in stocks (1,442) 2,637 (1,413) Increase in debtors (2,290) (1,790) (3,898) Increase/(decrease) in creditors 6,718 2,418 21,117 Net cash inflow from operating activities 22,794 22,050 9. Interim Report 2002 The Interim Report 2002 will be sent to all registered shareholders during March 2002. Copies for general release will be available from the Company Secretary, Thorntons PLC, Thornton Park, Somercotes, Alfreton, Derbyshire, DE55 4XJ. The Interim Report 2002 will also be available on the company's website (www.thorntons.co.uk). - ENDS - This information is provided by RNS The company news service from the London Stock Exchange
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