Interim Results

 

TIDMTHT 
 
RNS Number : 4677N 
Thorntons PLC 
18 February 2009 
 

FOR IMMEDIATE RELEASE 
 
 
 
 
Thorntons PLC 
 
 
Announcement of Interim Results 
 
 
 
 
Thorntons PLC ("Thorntons" or "the Company") today announced its interim results 
for the 28 weeks ended 10th January 2009. 
 
 
The Company delivered an overall sales increase of 1.3%. Sales increases were 
reported from three of its four sales channels but own stores sales declined 
during a period in which High Street trading conditions deteriorated. 
 
 
 
 
  *  Revenues of GBP128.4 million showed an increase of 1.3% (2008: GBP126.7 million) 
 
 
 
  *  Profit before tax decreased by 39.0% to GBP7.3 million (2008: GBP11.9 million) 
 
 
 
  *  Underlying earnings per share of 7.5p were down 39.6% (2008: 12.5p); reported 
  EPS was adversely impacted by a one-off deferred tax charge of GBP2.9 million 
  relating to capital allowances 
 
 
 
  *  Net debt increased by GBP5.0 million to GBP16.3 million against the same period 
  last year. 
 
 
 
  *  The Board has decided to reduce the interim dividend to 1.2 pence per share in 
  line with the decline in underlying earnings 
 
 
 
 
 
Mike Davies, Thorntons Chief Executive, said: 
 
 
"Profit was adversely affected by increased promotional activity in response to 
rapid market decline during the second quarter. Steps were taken to reduce 
non-discretionary costs, although their impact in the half year was limited. 
 
 
"Thorntons' focus on customer service combined with our strong operational 
platform and initiatives to reduce operating costs position us well to take 
advantage of opportunities to improve performance in the second half of the 
financial year. These include a three week longer selling season due to a late 
Easter, increased selling opportunities following the closure of Woolworths and 
improved productivity versus last year when we incurred higher costs due to the 
early Easter. 
 
 
"In the longer term we also expect to see benefits arising from improved deals 
in the property market 
at the time of lease renewals. 
 
 
"With prudent cost management, product innovation and keeping customers at the 
forefront of our thinking, I am confident that we will emerge from the current 
conditions a stronger, more profitable business." 
ENDS 
 
 
For further information please contact: 
Cardew Group 
                        T: 020 7930 0777 
Sofia Rehman / Anthony Cardew / Daniela Cormano 
 
 
 
 
 
 
Interim Management Report 
Sales for the 28-week period to 10 January 2009 were GBP128.4m (2008: 
GBP126.7m), which represents growth of 1.3%. Profit before tax decreased to 
GBP7.3millon (2008: GBP11.9m) largely due to the poor trading in our own stores 
during the period before Christmas. Sales to our commercial customers, to our 
franchisees and from our website all delivered growth despite the tough 
conditions. 
Our strategy of product innovation, improving the in-store environment and 
customer service remains as relevant now as it has been but with much greater 
emphasis on careful cost management to improve our profit performance in the 
short term. Whilst the retail environment remains extremely challenging we are 
confident that Thorntons will emerge from the current conditions a stronger, 
more profitable business. The Board has decided to pay a dividend of 1.2p (2008: 
1.95p). 
Sales 
Own Stores 
Like for like sales in our own stores suffered from the widely reported 
reduction in footfall on the High Street from mid October to mid December and 
from the very high level of discounting prevalent from most retailers during 
that time. Thorntons' policy of offering discounts, in line with other 
retailers, meant that all Christmas stock was cleared before the end of the 
period. 
Product innovation continues to play an important role. Thorntons Moments, 
launched in February 2008, has been a great success and contributed sales of 
GBP4.8m in the first half year. Of this, GBP2.6m was due to sales in Thorntons 
stores and GBP2.2m to commercial sales. Similarly, our new tablet bars, launched 
in September in our own stores, contributed nearly GBP0.8m in the three months 
to Christmas. 
The new store concept that was trialled in five stores performed better than the 
rest of the estate. However, there are further improvements to be made before 
consideration is given to rolling the concept out across the own store 
portfolio. 
Our new own store EPOS system was successfully implemented before Christmas and 
contributed to improving customer service by significantly reducing transaction 
times and therefore queuing. It also delivered on all the functional benefits we 
had targeted. 
During the period we opened a net three new stores and now have 381 own stores. 
Franchise 
Franchise sales increased by 3.7% to GBP9.9m in the half year, benefiting from 
the same innovation as our own stores and from increased distribution - we added 
a net nine new franchise stores during the period increasing the number of 
stores to 261. 
Commercial 
Commercial sales grew by 8.9% to GBP32.4m despite the loss of the Woolworths 
business. For perspective the Woolworths business represented GBP4.6m sales 
during the full year in 2007/08 with over 60% in the first half. The 
difficulties faced by Woolworths were anticipated and our receivables were well 
managed, resulting in a small bad debt of GBP150,000 when Woolworths went into 
administration. 
The Thorntons brand continues to perform well in all our other major retail 
customers. 
Thorntons Direct 
Sales to consumers, either through our call centre or website, continue to 
perform well, driven in particular by our customer-friendly website where sales 
are up 26% versus last year. 
Unfortunately our corporate sales to companies that use our products as gifts 
for their employees or customers have declined as most companies reduce any 
discretionary spend due to the credit crunch. 
The overall impact has been modest growth of 1.3% for total Thorntons Direct 
sales but margins have improved by 1.5%. 
Margins and operating expenses 
Gross margins declined from 51.5% of sales last year to 49.2% this year. Own 
store promotional discount levels were significantly higher than last year and 
achieved the desired result of clearing retail stock before Christmas. 
Opportunities were also taken to increase volumes of non-seasonal commercial 
sales and there was a continued shift in channel mix due to the higher relative 
growth of commercial sales. Sales price increases broadly covered raw material 
and manufacturing cost increases. 
Operating expense growth was contained at 5.2% and included the cost effects of 
inflation, a larger retail estate, higher utility costs and increased investment 
in retail merchandising. 
Other operating income increased by 36.1%, which is due entirely to growth in 
the licensing activities of the Group with its two main licensees. 
Financial position 
Net debt at the end of the period was GBP16.3m including GBP9.2m of finance 
leases compared with net debt at the end of the corresponding period last year 
of GBP11.3m, which included GBP9.5m of finance leases. The non-finance lease 
element of net debt falls well within the Group's facilities of GBP50.0m, which 
are committed until July 2010. 
Taxation 
The total tax charge of GBP5.1m includes a one-time deferred tax charge of 
GBP2.9m, which is required to implement the change in tax law which phases out 
industrial buildings allowances. The underlying tax charge amounts to 30.9% of 
profit before tax and is higher than the statutory rate of 28.0% due mainly to 
depreciation on assets for which the Group receives no tax allowances and the 
effect on the current year tax charge of the phasing out of industrial buildings 
allowances. 
Pension scheme 
The Group is currently in the process of consulting with its employees on 
changing the defined benefit final salary pension scheme to a career average (or 
CARE) defined benefit scheme by the end of the current financial year. If such a 
change were to be implemented there would be a one-time credit to the income 
statement this year of approximately GBP1.8m based on the discount and inflation 
rate assumptions used to calculate the IAS19 retirement benefit obligation as at 
10 January 2009. Clearly, any change in those assumptions at the time of 
implementing the change to CARE will affect the amount of the one-time credit. 
Principal risks and uncertainties 
Our 2008 Annual Report (pages 22 and 23) outlines our assessment of the 
principal risks and uncertainties facing the business together with the 
processes which are in place to monitor and mitigate those risks where possible. 
Looking forward to the second half of the current financial year, we believe 
that the risks and processes identified in the 2008 Annual Report are still 
applicable. In the current economic climate we are also devoting more resources 
to managing the Group's credit risk whether from financial institutions, 
customers or suppliers. 
Board changes 
In August 2008 Dominic Prendergast, Retail Director, stepped down from the Board 
and left the Company to pursue other interests. In December, Martin Davey 
resigned as a Non-executive Director due to increasing commitments elsewhere. 
The Board expresses its thanks to both Dominic and Martin for their 
contributions and wishes them every success in the future. Paul Wilkinson was 
appointed as the Company's Senior Independent Director following Martin Davey's 
resignation and Diana Houghton joined the Board as an independent Non-executive 
Director and will take over as Chair of the Audit Committee. Diana is a 
corporate development and strategy specialist who has broad experience of the 
consumer goods and leisure retail sectors and extensive corporate finance 
expertise. 
Management changes 
Lysanne McCallion, formerly Head of Thorntons Direct, was promoted to succeed 
Dominic Prendergast as Director of Retail and Hannah Legg, previously Head of 
Commercial Sales, succeeded Lysanne as Head of Thorntons Direct. 
 
 
Sarah Riley joined Thorntons as Director of HR in August 2008 having spent the 
previous 14 years at Scottish and Newcastle where she was most recently Head of 
HR for Group Operations. 
 
 
Lysanne, Hannah and Sarah have already made a significant contribution in their 
new roles and I am delighted to have them as members of the Executive Team. 
Outlook 
Thorntons is continuing to make progress despite the current market conditions. 
Our focus on customer service combined with our strong operational platform and 
cost initiatives position us well to take advantage of opportunities to improve 
performance in the second half of the financial year. These include a three week 
longer selling season due to a late Easter, increased selling opportunities 
following the closure of Woolworths and improved manufacturing productivity 
versus last year when we incurred higher costs due to the early Easter. 
In the longer term we also expect to see benefits arising from improved deals in 
the property market at the time of lease renewals. 
With prudent cost management, product innovation and keeping customers at the 
forefront of our thinking, I am confident that we will emerge from the current 
conditions a stronger, more profitable business. 
 
 
Mike Davies 
Chief Executive 
 
Consolidated income statement 28 weeks ended 10 January 2009 
 
+---------+-------+-------+-------+-------+-------+--------+-----------+-----------+-----------+ 
|         |       |       |       |       |       |        | Unaudited | Unaudited |   Audited | 
+---------+-------+-------+-------+-------+-------+--------+-----------+-----------+-----------+ 
|         |       |       |       |       |       |        |        28 |        28 |        52 | 
|         |       |       |       |       |       |        |     weeks |     weeks |     weeks | 
+---------+-------+-------+-------+-------+-------+--------+-----------+-----------+-----------+ 
|         |       |       |       |       |       |        |     ended |     ended |     ended | 
+---------+-------+-------+-------+-------+-------+--------+-----------+-----------+-----------+ 
|         |       |       |       |       |       |        |        10 |        12 |        28 | 
|         |       |       |       |       |       |        |   January |   January |      June | 
+---------+-------+-------+-------+-------+-------+--------+-----------+-----------+-----------+ 
|         |       |       |       |       |       |        |      2009 |      2008 |      2008 | 
+---------+-------+-------+-------+-------+-------+--------+-----------+-----------+-----------+ 
|         |       |       |       |       |       |   Note |   GBP'000 |   GBP'000 |   GBP'000 | 
|         |       |       |       |       |       |        |           |           |           | 
+---------+-------+-------+-------+-------+-------+--------+-----------+-----------+-----------+ 
| Revenue |                                       |        |   128,363 |   126,671 |   208,122 | 
+---------+---------------------------------------+--------+-----------+-----------+-----------+ 
| Cost of sales                                   |        |  (65,147) |  (61,388) | (103,017) | 
+-------------------------------------------------+--------+-----------+-----------+-----------+ 
| Gross profit                                    |        |    63,216 |    65,283 |   105,105 | 
+-------------------------------------------------+--------+-----------+-----------+-----------+ 
| Operating expenses                              |        |  (55,421) |  (52,690) |  (95,918) | 
+-------------------------------------------------+--------+-----------+-----------+-----------+ 
| Other operating income                          |        |       697 |       512 |     1,139 | 
+-------------------------------------------------+--------+-----------+-----------+-----------+ 
| Operating profit                                |        |     8,492 |    13,105 |    10,326 | 
+-------------------------------------------------+--------+-----------+-----------+-----------+ 
| Finance income                                  |        |         8 |        22 |        45 | 
+-------------------------------------------------+--------+-----------+-----------+-----------+ 
| Finance costs                                   |        |   (1,216) |   (1,189) |   (1,901) | 
+-------------------------------------------------+--------+-----------+-----------+-----------+ 
| Profit before taxation                          |        |     7,284 |    11,938 |     8,470 | 
+-------------------------------------------------+--------+-----------+-----------+-----------+ 
| Taxation                                        |      5 |   (5,104) |   (3,630) |   (2,402) | 
+-------------------------------------------------+--------+-----------+-----------+-----------+ 
| Profit attributable to equity shareholders      |        |     2,180 |     8,308 |     6,068 | 
+-------------------------------------------------+--------+-----------+-----------+-----------+ 
|                                                                                              | 
+----------------------------------------------------------------------------------------------+ 
| Earnings per share                                                                           | 
+----------------------------------------------------------------------------------------------+ 
| Underlying *                                    |      6 |      7.5p |     12.5p |      9.1p | 
+-------------------------------------------------+--------+-----------+-----------+-----------+ 
| Basic                                           |      6 |      3.3p |     12.5p |      9.1p | 
+-------------------------------------------------+--------+-----------+-----------+-----------+ 
| Diluted                                         |      6 |      3.3p |     12.3p |      9.0p | 
+---------+-------+-------+-------+-------+-------+--------+-----------+-----------+-----------+ 
All activities in both the current and previous year relate to continuing 
operations. 
 
* Underlying earnings per share excludes the impact of the one-off deferred tax 
charge described in note 5. 
 
Consolidated statement of recognised income and expense 28 weeks ended 10 
January 2009 
 
 
 
+--------+--------+--------+-------+-------+-------+-------+-----------+-----------+---------+ 
|        |        |        |       |       |       |       | Unaudited | Unaudited | Audited | 
+--------+--------+--------+-------+-------+-------+-------+-----------+-----------+---------+ 
|        |        |        |       |       |       |       |        28 |        28 |      52 | 
|        |        |        |       |       |       |       |     weeks |     weeks |   weeks | 
+--------+--------+--------+-------+-------+-------+-------+-----------+-----------+---------+ 
|        |        |        |       |       |       |       |     ended |     ended |   ended | 
+--------+--------+--------+-------+-------+-------+-------+-----------+-----------+---------+ 
|        |        |        |       |       |       |       |        10 |        12 |      28 | 
|        |        |        |       |       |       |       |   January |   January |    June | 
+--------+--------+--------+-------+-------+-------+-------+-----------+-----------+---------+ 
|        |        |        |       |       |       |       |      2009 |      2008 |    2008 | 
+--------+--------+--------+-------+-------+-------+-------+-----------+-----------+---------+ 
|        |        |        |       |       |       |       |   GBP'000 |   GBP'000 | GBP'000 | 
|        |        |        |       |       |       |       |           |           |         | 
+--------+--------+--------+-------+-------+-------+-------+-----------+-----------+---------+ 
| Actuarial (loss)/gain recognised in the defined benefit  |      (93) |     1,679 | (2,148) | 
| pension scheme                                           |           |           |         | 
+----------------------------------------------------------+-----------+-----------+---------+ 
| Movement of deferred tax on pension liability            |        28 |     (470) |     601 | 
+----------------------------------------------------------+-----------+-----------+---------+ 
| Profit attributable to equity shareholders               |     2,180 |     8,308 |   6,068 | 
+----------------------------------------------------------+-----------+-----------+---------+ 
| Total recognised income and expense for the financial    |     2,115 |     9,517 |   4,521 | 
| period                                                   |           |           |         | 
+--------+--------+--------+-------+-------+-------+-------+-----------+-----------+---------+ 
The notes below form an integral part of this condensed set of financial 
statements. 
 
 
 
Consolidated balance sheet 28 weeks ended 10 January 2009 
 
 
+--------+--------+--------+--------+--------+--------+--------+-----------+-----------+----------+ 
|        |        |        |        |        |        |        | Unaudited | Unaudited |  Audited | 
+--------+--------+--------+--------+--------+--------+--------+-----------+-----------+----------+ 
|        |        |        |        |        |        |        |     as at |     as at |    as at | 
+--------+--------+--------+--------+--------+--------+--------+-----------+-----------+----------+ 
|        |        |        |        |        |        |        |        10 |        12 |       28 | 
|        |        |        |        |        |        |        |   January |   January |     June | 
+--------+--------+--------+--------+--------+--------+--------+-----------+-----------+----------+ 
|        |        |        |        |        |        |        |      2009 |      2008 |     2008 | 
+--------+--------+--------+--------+--------+--------+--------+-----------+-----------+----------+ 
|        |        |        |        |        |        |   Note |   GBP'000 |   GBP'000 |  GBP'000 | 
|        |        |        |        |        |        |        |           |           |          | 
+--------+--------+--------+--------+--------+--------+--------+-----------+-----------+----------+ 
| Assets                                              |        |           |           |          | 
+-----------------------------------------------------+--------+-----------+-----------+----------+ 
| Non-current assets                                  |        |           |           |          | 
+-----------------------------------------------------+--------+-----------+-----------+----------+ 
| Intangible assets                                   |      8 |     5,487 |     5,192 |    4,786 | 
+-----------------------------------------------------+--------+-----------+-----------+----------+ 
| Property, plant and equipment                       |      9 |    64,754 |    65,740 |   64,084 | 
+-----------------------------------------------------+--------+-----------+-----------+----------+ 
|                                                     |        |    70,241 |    70,932 |   68,870 | 
+-----------------------------------------------------+--------+-----------+-----------+----------+ 
| Current assets                                      |        |           |           |          | 
+-----------------------------------------------------+--------+-----------+-----------+----------+ 
| Inventories                                         |        |    24,732 |    19,047 |   24,307 | 
+-----------------------------------------------------+--------+-----------+-----------+----------+ 
| Trade and other receivables                         |        |    19,111 |    19,723 |   15,155 | 
+-----------------------------------------------------+--------+-----------+-----------+----------+ 
| Cash and cash equivalents                           |     13 |     5,412 |     2,088 |    1,088 | 
+-----------------------------------------------------+--------+-----------+-----------+----------+ 
|                                                     |        |    49,255 |    40,858 |   40,550 | 
+-----------------------------------------------------+--------+-----------+-----------+----------+ 
| Liabilities                                         |        |           |           |          | 
+-----------------------------------------------------+--------+-----------+-----------+----------+ 
| Current liabilities                                 |        |           |           |          | 
+-----------------------------------------------------+--------+-----------+-----------+----------+ 
| Trade and other payables                            |        |  (36,017) |  (33,633) | (22,014) | 
+-----------------------------------------------------+--------+-----------+-----------+----------+ 
| Borrowings                                          |     13 |  (15,999) |   (7,087) | (24,057) | 
+-----------------------------------------------------+--------+-----------+-----------+----------+ 
| Current tax liabilities                             |        |   (2,344) |   (3,215) |    (984) | 
+-----------------------------------------------------+--------+-----------+-----------+----------+ 
| Provisions for liabilities                          |        |     (192) |     (160) |    (122) | 
+-----------------------------------------------------+--------+-----------+-----------+----------+ 
|                                                     |        |  (54,552) |  (44,095) | (47,177) | 
+-----------------------------------------------------+--------+-----------+-----------+----------+ 
| Net current liabilities                             |        |   (5,297) |   (3,237) |  (6,627) | 
+-----------------------------------------------------+--------+-----------+-----------+----------+ 
| Non-current liabilities                             |        |           |           |          | 
+-----------------------------------------------------+--------+-----------+-----------+----------+ 
| Borrowings                                          |     13 |   (5,716) |   (6,317) |  (5,295) | 
+-----------------------------------------------------+--------+-----------+-----------+----------+ 
| Deferred tax liabilities                            |        |   (5,840) |   (4,158) |  (2,750) | 
+-----------------------------------------------------+--------+-----------+-----------+----------+ 
| Retirement benefit obligations                      |     10 |  (15,852) |  (12,993) | (15,965) | 
+-----------------------------------------------------+--------+-----------+-----------+----------+ 
| Other non-current liabilities                       |        |   (2,980) |   (2,368) |  (2,612) | 
+-----------------------------------------------------+--------+-----------+-----------+----------+ 
| Provisions for liabilities                          |        |     (532) |     (567) |    (586) | 
+-----------------------------------------------------+--------+-----------+-----------+----------+ 
|                                                     |        |  (30,920) |  (26,403) | (27,208) | 
+-----------------------------------------------------+--------+-----------+-----------+----------+ 
| Net assets                                          |        |    34,024 |    41,292 |   35,035 | 
+-----------------------------------------------------+--------+-----------+-----------+----------+ 
|                                                     |        |           |           |          | 
+-----------------------------------------------------+--------+-----------+-----------+----------+ 
| Shareholders' equity                                |        |           |           |          | 
+-----------------------------------------------------+--------+-----------+-----------+----------+ 
| Ordinary shares                                     |     11 |     6,835 |     6,830 |    6,835 | 
+-----------------------------------------------------+--------+-----------+-----------+----------+ 
| Share premium                                       |     11 |    13,752 |    13,707 |   13,750 | 
+-----------------------------------------------------+--------+-----------+-----------+----------+ 
| Retained earnings                                   |     11 |    13,437 |    20,755 |   14,450 | 
+-----------------------------------------------------+--------+-----------+-----------+----------+ 
| Total equity attributable to parent's equity        |        |    34,024 |    41,292 |   35,035 | 
| holders                                             |        |           |           |          | 
+--------+--------+--------+--------+--------+--------+--------+-----------+-----------+----------+ 
The notes below form an integral part of this condensed set of financial 
statements. 
 
 
 
Consolidated cash flow statement 28 weeks ended 10 January 2009 
 
 
 
+--------+--------+--------+--------+--------+-------+------+-----------+-----------+---------+ 
|        |        |        |        |        |       |      | Unaudited | Unaudited | Audited | 
+--------+--------+--------+--------+--------+-------+------+-----------+-----------+---------+ 
|        |        |        |        |        |       |      |        28 |        28 |      52 | 
|        |        |        |        |        |       |      |     weeks |     weeks |   weeks | 
+--------+--------+--------+--------+--------+-------+------+-----------+-----------+---------+ 
|        |        |        |        |        |       |      |     ended |     ended |   ended | 
+--------+--------+--------+--------+--------+-------+------+-----------+-----------+---------+ 
|        |        |        |        |        |       |      |        10 |        12 |      28 | 
|        |        |        |        |        |       |      |   January |   January |    June | 
+--------+--------+--------+--------+--------+-------+------+-----------+-----------+---------+ 
|        |        |        |        |        |       |      |      2009 |      2008 |    2008 | 
+--------+--------+--------+--------+--------+-------+------+-----------+-----------+---------+ 
|        |        |        |        |        |       | Note |   GBP'000 |   GBP'000 | GBP'000 | 
|        |        |        |        |        |       |      |           |           |         | 
+--------+--------+--------+--------+--------+-------+------+-----------+-----------+---------+ 
| Cash flows from operating activities       |          12a |    23,729 |    23,752 |  11,481 | 
+--------------------------------------------+--------------+-----------+-----------+---------+ 
| Cash flows from investing activities       |              |           |           |         | 
+--------------------------------------------+--------------+-----------+-----------+---------+ 
| Proceeds from sale of property, plant and  |              |        45 |       275 |     262 | 
| equipment                                  |              |           |           |         | 
+--------------------------------------------+--------------+-----------+-----------+---------+ 
| Purchase of property, plant and equipment  |              |   (4,675) |   (3,318) | (5,680) | 
+--------------------------------------------+--------------+-----------+-----------+---------+ 
| Net cash used in investing activities      |              |   (4,630) |   (3,043) | (5,418) | 
+--------------------------------------------+--------------+-----------+-----------+---------+ 
| Cash flows from financing activities       |              |           |           |         | 
+--------------------------------------------+--------------+-----------+-----------+---------+ 
| Net proceeds from issue of ordinary shares |              |         2 |       175 |     223 | 
|                                            |              |           |           |         | 
+--------------------------------------------+--------------+-----------+-----------+---------+ 
| Net interest paid                          |              |   (1,233) |   (1,157) | (1,794) | 
+--------------------------------------------+--------------+-----------+-----------+---------+ 
| Capital element of finance lease           |              |   (1,811) |   (2,210) | (3,712) | 
| repayments                                 |              |           |           |         | 
+--------------------------------------------+--------------+-----------+-----------+---------+ 
| Borrowings (repaid)/advanced               |              |   (8,496) |  (17,000) |   2,000 | 
+--------------------------------------------+--------------+-----------+-----------+---------+ 
| Dividends paid                             |              |   (3,237) |   (3,235) | (4,550) | 
+--------------------------------------------+--------------+-----------+-----------+---------+ 
| Net cash used in financing activities      |              |  (14,775) |  (23,427) | (7,833) | 
+--------------------------------------------+--------------+-----------+-----------+---------+ 
| Net increase/(decrease) in cash and cash   |              |     4,324 |   (2,718) | (1,770) | 
| equivalents                                |              |           |           |         | 
+--------------------------------------------+--------------+-----------+-----------+---------+ 
| Cash and cash equivalents at beginning of  |              |     1,088 |     2,858 |   2,858 | 
| period                                     |              |           |           |         | 
+--------------------------------------------+--------------+-----------+-----------+---------+ 
| Cash and cash equivalents at end of period |          12b |     5,412 |       140 |   1,088 | 
+--------+--------+--------+--------+--------+-------+------+-----------+-----------+---------+ 
The notes below form an integral part of this condensed set of financial 
statements. 
 
 
 
Notes to the interim financial statements 
 
 
1    General information 
The Company is a limited liability company incorporated and domiciled in the UK. 
The address of its registered office is Thornton Park, Somercotes, Alfreton, 
Derbyshire DE55 4XJ. 
The Company is listed on the London Stock Exchange. 
The condensed set of financial statements for the 28 weeks ended 10 January 2009 
were approved by the Directors on 16 February 2009. These condensed financial 
statements do not comprise statutory accounts within the meaning of Section 240 
of the Companies Act 1985. The financial information contained in this condensed 
set of financial statements in respect of the 52 weeks ended 28 June 2008 has 
been extracted from the Annual Report and accounts, which were approved by the 
Board of Directors on 9 September 2008 and delivered to the Registrar of 
Companies. The report of the auditors on those accounts was unqualified, did not 
contain an emphasis of matter paragraph and did not contain any statement under 
Section 237 of the Companies Act 1985. 
The half-yearly results for the current and comparative periods are unaudited. 
The auditors have carried out a review of this condensed set of financial 
statements for the 28 weeks ended 10 January 2009 and their report is set out 
below. 
2    Basis of preparation 
This condensed set of financial statements for the 28 weeks ended 10 January 
2009 has been prepared in accordance with the Disclosure and Transparency Rules 
of the Financial Services Authority and with IAS 34 'Interim financial 
reporting' as adopted by the European Union. This condensed set of financial 
statements should be read in conjunction with the annual financial statements 
for the year ended 28 June 2008, which have been prepared in accordance with 
International Financial Reporting Standards (IFRS) as adopted by the European 
Union. 
3    Accounting policies 
The accounting policies adopted are consistent with those of the annual 
financial statements for the year ended 28 June 2008, as described in those 
annual financial statements. 
The following new standards, amendments to standards or interpretations are 
mandatory for the first time for the financial year ending 27 June 2009: 
-    IFRIC 11 'IFRS 2 - Group and treasury share transactions'. This is not 
expected to have a significant impact on the Group; and 
-    IFRIC 12 'Service concession arrangements'. This is not expected to have a 
significant impact on the Group. 
The following new standards, amendments to standards and interpretations have 
been issued, but are not effective for the year ending 27 June 2009 and have not 
been early adopted: 
- IFRS 8 'Operating segments, basis of organisation, types of products'. This 
standard replaces IAS 14. The new standard uses a "management approach", under 
which segment information is presented on the same basis as that used for 
internal reporting purposes. Work is currently being undertaken to understand 
how this standard will affect the Group; and 
- IAS 1 (Amendment) 'Presentation of financial statements'. This will affect the 
Group by means of presentation of the primary statements only. 
The following new standards, amendments to standards and interpretations have 
been issued but are not effective for the year ending 27 June 2009, have not 
been early adopted and are not expected to have a significant impact on the 
Group: 
-    IFRS 3 (Amendment) 'Business combinations'; 
-    IAS 23 (Amendment) 'Borrowing costs'; 
-    IAS 27 (Amendment) 'Consolidated and separate financial statements'; 
-    IAS 32 (Amendment) 'Financial instruments: Presentation' and IAS1 
(Amendment) 'Presentation of financial statements'; 
-    IFRIC 13 ' Customer loyalty programmes relating to IAS 18, Revenue'; 
-    IFRIC 14 'The limit on a defined benefit asset, minimum funding 
requirements and their interaction'; 
-    IFRIC 15 'Agreements for the construction of real estate'; 
-    IFRIC 16 'Hedges of a net investment in a foreign operation'; 
-    IFRIC 17 'Distributions of non-cash assets to owners'; and 
-    IFRIC 18 'Transfers of assets from customers'. 
 
 
 
 
4    Segmental reporting 
The Group's operations consist of the vertically integrated manufacture, 
distribution and retail of confectionery products. Given this level of 
integration, the Directors consider that there is only one business segment and 
therefore the disclosures are given in the primary financial statements or 
related notes. 
Revenue arises from UK operations and therefore no separate reporting for 
geographical segments is required. 
5    Taxation 
The tax charge including deferred tax for the 28 weeks ended 10 January 2009 is 
based on a full year overall expected tax rate of 70.1% (full year 2008: 30.4%), 
this increase being due to the one off charge of GBP2.9m to deferred tax 
recognised in the year as a result of the withdrawal of industrial buildings 
allowances. 
+--------------------------------------------------------+---------+------------+ 
|                                                        | GBP'000 |  Effective | 
|                                                        |         |   tax rate | 
+--------------------------------------------------------+---------+------------+ 
| Tax charge on profit on ordinary activities before     |   2,251 |      30.9% | 
| taxation                                               |         |            | 
+--------------------------------------------------------+---------+------------+ 
| Deferred tax charge resulting from withdrawal of       |   2,853 |      39.2% | 
| industrial buildings allowances                        |         |            | 
+--------------------------------------------------------+---------+------------+ 
| Total tax charge for the 28 weeks ended 10 January     |   5,104 |      70.1% | 
| 2009                                                   |         |            | 
+--------------------------------------------------------+---------+------------+ 
 
 
The current year rate has been calculated by reference to the projected charge 
for the full year ending 27 June 2009 and reflects the mainstream corporation 
tax rate of 28%. The current year's forecast current tax charge also reflects 
the changes to capital allowances legislation effective from 1 April 2008. The 
ordinary tax charge exceeds the charge based on these statutory rates, 
principally due to depreciation on owned assets not qualifying for capital 
allowances and other permanently disallowable items. 
6    Earnings per share 
Basic earnings per share is calculated by dividing the earnings attributable to 
ordinary shareholders by the weighted average number of ordinary shares 
outstanding during the period, excluding those held in the employee share trust 
(ESOP), which are treated as cancelled. 
For diluted earnings per share, the weighted average number of ordinary shares 
in issue is adjusted to assume conversion of all dilutive potential ordinary 
shares. Dilutive potential ordinary shares are those share options granted to 
employees where the exercise price is less than the average market price of the 
Company's ordinary shares during the period. 
Reconciliations of the earnings and weighted average number of shares used in 
the calculations are set out below: 
 
 
 
 
+-----+-----+-----+-----+------+----------+----------+----------+---+------+----------+----------+---+------+----------+----------+ 
|     |     |     |     |      |           Unaudited            |   |         Unaudited          |   |          Audited           | 
+-----+-----+-----+-----+------+--------------------------------+---+----------------------------+---+----------------------------+ 
|     |     |     |     |      |        28 weeks ended          |   |      28 weeks ended        |   |      52 weeks ended        | 
+-----+-----+-----+-----+------+--------------------------------+---+----------------------------+---+----------------------------+ 
|     |     |     |     |      |        10 January 2009         |   |      12 January 2008       |   |        28 June 2008        | 
+-----+-----+-----+-----+------+--------------------------------+---+----------------------------+---+----------------------------+ 
|     |     |     |     |      |          |    Basic |  Diluted |          |    Basic |  Diluted |          |    Basic |  Diluted | 
+-----+-----+-----+-----+------+----------+----------+----------+----------+----------+----------+----------+----------+----------+ 
|     |     |     |     |      |          | earnings | earnings |          | earnings | earnings |          | earnings | earnings | 
+-----+-----+-----+-----+------+----------+----------+----------+----------+----------+----------+----------+----------+----------+ 
|     |     |     |     |      | Earnings |      per |      per | Earnings |      per |      per | Earnings |      per |      per | 
+-----+-----+-----+-----+------+----------+----------+----------+----------+----------+----------+----------+----------+----------+ 
|     |     |     |     |      |  GBP'000 |    share |    share |  GBP'000 |    share |    share |  GBP'000 |    share |    share | 
+-----+-----+-----+-----+------+----------+----------+----------+----------+----------+----------+----------+----------+----------+ 
| Profit before the deferred   |    5,033 |    7.5p* |    7.5p* |    8,308 |    12.5p |    12.3p |    6,068 |     9.1p |     9.0p | 
| tax charge arising from the  |          |          |          |          |          |          |          |          |          | 
| withdrawal of industrial     |          |          |          |          |          |          |          |          |          | 
| buildings allowances         |          |          |          |          |          |          |          |          |          | 
+------------------------------+----------+----------+----------+----------+----------+----------+----------+----------+----------+ 
| Deferred tax arising from    |  (2,853) |   (4.2p) |   (4.2p) |        - |        - |        - |        - |        - |        - | 
| the withdrawal of industrial |          |          |          |          |          |          |          |          |          | 
| buildings allowances         |          |          |          |          |          |          |          |          |          | 
+------------------------------+----------+----------+----------+----------+----------+----------+----------+----------+----------+ 
| Profit attributable to       |    2,180 |     3.3p |     3.3p |    8,308 |    12.5p |    12.3p |    6,068 |     9.1p |     9.0p | 
| equity shareholders          |          |          |          |          |          |          |          |          |          | 
+-----+-----+-----+-----+------+----------+----------+----------+---+------+----------+----------+---+------+----------+----------+ 
 
 
*underlying earnings per share 
 
 
 
 
+-----------+-----------+-----------+----------+------------+------------+------------+ 
|           |           |           |          |  Unaudited |  Unaudited |    Audited | 
+-----------+-----------+-----------+----------+------------+------------+------------+ 
|           |           |           |          |   28 weeks |   28 weeks |   52 weeks | 
+-----------+-----------+-----------+----------+------------+------------+------------+ 
|           |           |           |          |      ended |      ended |      ended | 
+-----------+-----------+-----------+----------+------------+------------+------------+ 
|           |           |           |          |         10 |         12 |    28 June | 
|           |           |           |          |    January |    January |            | 
+-----------+-----------+-----------+----------+------------+------------+------------+ 
|           |           |           |          |       2009 |       2008 |       2008 | 
+-----------+-----------+-----------+----------+------------+------------+------------+ 
| Weighted average number of ordinary shares   | 66,938,628 | 66,705,674 | 66,810,143 | 
+----------------------------------------------+------------+------------+------------+ 
| Dilutive effect from share options           |     45,834 |    627,242 |    456,486 | 
+----------------------------------------------+------------+------------+------------+ 
| Fully diluted weighted average number of     | 66,984,462 | 67,332,916 | 67,266,629 | 
| ordinary shares                              |            |            |            | 
+-----------+-----------+-----------+----------+------------+------------+------------+ 
 
 
7    Ordinary dividends 
+--------+--------+--------+--------+--------+--------+--------+-----------+-----------+---------+ 
|        |        |        |        |        |        |        | Unaudited | Unaudited | Audited | 
+--------+--------+--------+--------+--------+--------+--------+-----------+-----------+---------+ 
|        |        |        |        |        |        |        |        28 |        28 |      52 | 
|        |        |        |        |        |        |        |     weeks |     weeks |   weeks | 
+--------+--------+--------+--------+--------+--------+--------+-----------+-----------+---------+ 
|        |        |        |        |        |        |        |     ended |     ended |   ended | 
+--------+--------+--------+--------+--------+--------+--------+-----------+-----------+---------+ 
|        |        |        |        |        |        |        |        10 |        12 |      28 | 
|        |        |        |        |        |        |        |   January |   January |    June | 
+--------+--------+--------+--------+--------+--------+--------+-----------+-----------+---------+ 
|        |        |        |        |        |        |        |      2009 |      2008 |    2008 | 
+--------+--------+--------+--------+--------+--------+--------+-----------+-----------+---------+ 
|        |        |        |        |        |        |        |   GBP'000 |   GBP'000 | GBP'000 | 
+--------+--------+--------+--------+--------+--------+--------+-----------+-----------+---------+ 
| Final dividend paid for the 52 weeks ended 28 June 2008 of   |     3,237 |     3,235 |   3,235 | 
| 4.85p                                                        |           |           |         | 
| (53 weeks ended 30 June 2007: 4.85p)                         |           |           |         | 
+--------------------------------------------------------------+-----------+-----------+---------+ 
| Interim dividend paid in respect of the 52 weeks ended 28    |         - |         - |   1,315 | 
| June 2008 of 1.95p                                           |           |           |         | 
+--------------------------------------------------------------+-----------+-----------+---------+ 
| Amounts recognised as distributions to equity holders        |     3,237 |     3,235 |   4,550 | 
+--------+--------+--------+--------+--------+--------+--------+-----------+-----------+---------+ 
 
 
The Directors have approved an interim dividend of 1.2p per share in respect of 
the 28 weeks ended 10 January 2009. This will be paid on 30 April 2009 to 
shareholders who are on the register of members on 27 March 2009. The shares 
will be quoted ex-dividend on 25 March 2009. 
8    Intangible assets (unaudited) 
+-----------+--------+--------+--------+--------+--------+--------+--------+-------+----------+ 
|           |        |        |        |        |        |        |        |       | Computer | 
+-----------+--------+--------+--------+--------+--------+--------+--------+-------+----------+ 
|           |        |        |        |        |        |        |        |         software | 
+-----------+--------+--------+--------+--------+--------+--------+--------+------------------+ 
|           |        |        |        |        |        |        |        |       |  GBP'000 | 
+-----------+--------+--------+--------+--------+--------+--------+--------+-------+----------+ 
| Cost      |        |        |        |        |        |        |        |       |          | 
+-----------+--------+--------+--------+--------+--------+--------+--------+-------+----------+ 
| At 28 June 2008                                                          |           23,570 | 
+--------------------------------------------------------------------------+------------------+ 
| Additions at cost                                                        |            1,845 | 
+--------------------------------------------------------------------------+------------------+ 
| Reclassifications to tangible assets                                     |              (2) | 
+--------------------------------------------------------------------------+------------------+ 
| Disposals |        |        |        |        |        |        |        |       |    (100) | 
+-----------+--------+--------+--------+--------+--------+--------+--------+-------+----------+ 
| At 10 January 2009                                                               |   25,313 | 
+----------------------------------------------------------------------------------+----------+ 
| Accumulated depreciation and amortisation                                        |          | 
+----------------------------------------------------------------------------------+----------+ 
| At 28 June 2008                                                                  |   18,784 | 
+----------------------------------------------------------------------------------+----------+ 
| Charge for the period                                                            |    1,142 | 
+----------------------------------------------------------------------------------+----------+ 
| Disposals |        |        |        |        |        |        |        |       |    (100) | 
+-----------+--------+--------+--------+--------+--------+--------+--------+-------+----------+ 
| At 10 January 2009                                                               |   19,826 | 
+----------------------------------------------------------------------------------+----------+ 
| Net book amount at 10 January 2009                                               |    5,487 | 
+----------------------------------------------------------------------------------+----------+ 
| Net book amount at 28 June 2008                                                  |    4,786 | 
+-----------+--------+--------+--------+--------+--------+--------+--------+-------+----------+ 
 
 
 
 9    Tangible assets (unaudited) 
+-----------+--------+--------+--------+--------+--------+--------+--------+-------+-----------+ 
|           |        |        |        |        |        |        |        |       | Property, | 
+-----------+--------+--------+--------+--------+--------+--------+--------+-------+-----------+ 
|           |        |        |        |        |        |        |        |         plant and | 
|           |        |        |        |        |        |        |        |         equipment | 
+-----------+--------+--------+--------+--------+--------+--------+--------+-------------------+ 
|           |        |        |        |        |        |        |        |       |   GBP'000 | 
+-----------+--------+--------+--------+--------+--------+--------+--------+-------+-----------+ 
| Cost      |        |        |        |        |        |        |        |       |           | 
+-----------+--------+--------+--------+--------+--------+--------+--------+-------+-----------+ 
| At 28 June 2008                                                          |           178,340 | 
+--------------------------------------------------------------------------+-------------------+ 
| Additions at cost                                                        |             5,677 | 
+--------------------------------------------------------------------------+-------------------+ 
| Reclassifications from intangible assets                                 |                 2 | 
+--------------------------------------------------------------------------+-------------------+ 
| Disposals                                                                |           (4,331) | 
+--------------------------------------------------------------------------+-------------------+ 
| At 10 January 2009                                                               |   179,688 | 
+----------------------------------------------------------------------------------+-----------+ 
| Accumulated depreciation and amortisation                                        |           | 
+----------------------------------------------------------------------------------+-----------+ 
| At 28 June 2008                                                                  |   114,256 | 
+----------------------------------------------------------------------------------+-----------+ 
| Charge for the period                                                            |     4,994 | 
+----------------------------------------------------------------------------------+-----------+ 
| Disposals |        |        |        |        |        |        |        |       |   (4,316) | 
+-----------+--------+--------+--------+--------+--------+--------+--------+-------+-----------+ 
| At 10 January 2009                                                               |   114,934 | 
+----------------------------------------------------------------------------------+-----------+ 
| Net book amount at 10 January 2009                                               |    64,754 | 
+----------------------------------------------------------------------------------+-----------+ 
| Net book amount at 28 June 2008                                                  |    64,084 | 
+-----------+--------+--------+--------+--------+--------+--------+--------+-------+-----------+ 
 
 
10    Retirement benefit obligations 
The valuation of the Thorntons' Pension and Life Assurance Scheme at 28 June 
2008 has been updated on an actuarial basis applying current discount and 
inflation rate assumptions and incorporating the valuation of the plan assets at 
10 January 2009. This has led to a decrease in the net deficit of GBP0.1m from 
28 June 2008. 
 
 
11    Statement of changes in shareholders' equity (unaudited) 
+--------+--------+--------+--------+--------+--------+---------+---------+----------+---------+ 
|        |        |        |        |        |        |  Share  |   Share | Retained |         | 
+--------+--------+--------+--------+--------+--------+---------+---------+----------+---------+ 
|        |        |        |        |        |        | capital | premium | earnings |   Total | 
+--------+--------+--------+--------+--------+--------+---------+---------+----------+---------+ 
|        |        |        |        |        |        | GBP'000 | GBP'000 |  GBP'000 | GBP'000 | 
+--------+--------+--------+--------+--------+--------+---------+---------+----------+---------+ 
| At 30 June 2007                                     |   6,811 |  13,551 |   14,524 |  34,886 | 
+-----------------------------------------------------+---------+---------+----------+---------+ 
| Total recognised income and expense                 |       - |       - |    9,517 |   9,517 | 
+-----------------------------------------------------+---------+---------+----------+---------+ 
| Cash flow hedges                                    |       - |       - |      (8) |     (8) | 
+-----------------------------------------------------+---------+---------+----------+---------+ 
| New share capital issued                            |      19 |     156 |        - |     175 | 
+-----------------------------------------------------+---------+---------+----------+---------+ 
| Share-based payment credit                          |       - |       - |      223 |     223 | 
+-----------------------------------------------------+---------+---------+----------+---------+ 
| Effect of tax on share option movement              |       - |       - |    (284) |   (284) | 
+-----------------------------------------------------+---------+---------+----------+---------+ 
| Movement in investment in own shares                |       - |       - |       18 |      18 | 
+-----------------------------------------------------+---------+---------+----------+---------+ 
| Dividends                                           |       - |       - |  (3,235) | (3,235) | 
+-----------------------------------------------------+---------+---------+----------+---------+ 
| At 12 January 2008                                  |   6,830 |  13,707 |   20,755 |  41,292 | 
+--------+--------+--------+--------+--------+--------+---------+---------+----------+---------+ 
 
11    Statement of changes in shareholders' equity (unaudited) continued 
+--------+--------+--------+--------+--------+--------+---------+---------+----------+---------+ 
|        |        |        |        |        |        |  Share  |   Share | Retained |         | 
+--------+--------+--------+--------+--------+--------+---------+---------+----------+---------+ 
|        |        |        |        |        |        | capital | premium | earnings |   Total | 
+--------+--------+--------+--------+--------+--------+---------+---------+----------+---------+ 
|        |        |        |        |        |        | GBP'000 | GBP'000 |  GBP'000 | GBP'000 | 
+--------+--------+--------+--------+--------+--------+---------+---------+----------+---------+ 
| At 28 June 2008                                     |   6,835 |  13,750 |   14,450 |  35,035 | 
+-----------------------------------------------------+---------+---------+----------+---------+ 
| Total recognised income and expense                 |       - |       - |    2,115 |   2,115 | 
+-----------------------------------------------------+---------+---------+----------+---------+ 
| New share capital issued                            |       - |       2 |        - |       2 | 
+-----------------------------------------------------+---------+---------+----------+---------+ 
| Share-based payment credit                          |       - |       - |      286 |     286 | 
+-----------------------------------------------------+---------+---------+----------+---------+ 
| Effect of tax on share option movement              |       - |       - |    (177) |   (177) | 
+-----------------------------------------------------+---------+---------+----------+---------+ 
| Dividends                                           |       - |       - |  (3,237) | (3,237) | 
+-----------------------------------------------------+---------+---------+----------+---------+ 
| At 10 January 2009                                  |   6,835 |  13,752 |   13,437 |  34,024 | 
+--------+--------+--------+--------+--------+--------+---------+---------+----------+---------+ 
12    Cash flow from operating activities 
a.    Cash generated from operations 
+--------+--------+--------+--------+--------+--------+--------+-----------+-----------+---------+ 
|        |        |        |        |        |        |        | Unaudited | Unaudited | Audited | 
+--------+--------+--------+--------+--------+--------+--------+-----------+-----------+---------+ 
|        |        |        |        |        |        |        |        28 |        28 |      52 | 
|        |        |        |        |        |        |        |     weeks |     weeks |   weeks | 
+--------+--------+--------+--------+--------+--------+--------+-----------+-----------+---------+ 
|        |        |        |        |        |        |        |     ended |     ended |   ended | 
+--------+--------+--------+--------+--------+--------+--------+-----------+-----------+---------+ 
|        |        |        |        |        |        |        |        10 |        12 |      28 | 
|        |        |        |        |        |        |        |   January |   January |    June | 
+--------+--------+--------+--------+--------+--------+--------+-----------+-----------+---------+ 
|        |        |        |        |        |        |        |      2009 |      2008 |    2008 | 
+--------+--------+--------+--------+--------+--------+--------+-----------+-----------+---------+ 
|        |        |        |        |        |        |        |   GBP'000 |   GBP'000 | GBP'000 | 
|        |        |        |        |        |        |        |           |           |         | 
+--------+--------+--------+--------+--------+--------+--------+-----------+-----------+---------+ 
| Continuing operations                               |        |           |           |         | 
+-----------------------------------------------------+--------+-----------+-----------+---------+ 
| Operating profit                                    |        |     8,492 |    13,105 |  10,326 | 
+-----------------------------------------------------+--------+-----------+-----------+---------+ 
| Adjustments for:                                    |        |           |           |         | 
+-----------------------------------------------------+--------+-----------+-----------+---------+ 
| Depreciation and amortisation                       |        |     6,136 |     5,880 |  11,246 | 
+-----------------------------------------------------+--------+-----------+-----------+---------+ 
| Amortisation of Government grants received          |        |         - |         - |    (21) | 
+-----------------------------------------------------+--------+-----------+-----------+---------+ 
| Profit on disposal of property, plant and equipment |        |      (30) |     (180) |   (143) | 
|                                                     |        |           |           |         | 
+-----------------------------------------------------+--------+-----------+-----------+---------+ 
| Share-based payment charge                          |        |       286 |       223 |     447 | 
+-----------------------------------------------------+--------+-----------+-----------+---------+ 
| Operating cash flow before working capital          |        |    14,884 |    19,028 |  21,855 | 
| movements                                           |        |           |           |         | 
+-----------------------------------------------------+--------+-----------+-----------+---------+ 
| Changes in working capital                          |        |           |           |         | 
+-----------------------------------------------------+--------+-----------+-----------+---------+ 
| Increase in inventories                             |        |     (425) |     (845) | (6,105) | 
+-----------------------------------------------------+--------+-----------+-----------+---------+ 
| Increase in trade and other receivables             |        |   (3,800) |   (7,091) | (2,520) | 
+-----------------------------------------------------+--------+-----------+-----------+---------+ 
| Increase in payables                                |        |    14,063 |    14,278 |   2,309 | 
+-----------------------------------------------------+--------+-----------+-----------+---------+ 
| Increase in provisions                              |        |        16 |        68 |      49 | 
+-----------------------------------------------------+--------+-----------+-----------+---------+ 
| Decrease in post-employment benefits                |        |     (206) |     (745) | (1,600) | 
+-----------------------------------------------------+--------+-----------+-----------+---------+ 
| Cash generated from operations before taxation      |        |    24,532 |    24,693 |  13,988 | 
+-----------------------------------------------------+--------+-----------+-----------+---------+ 
| Corporate taxation                                  |        |     (803) |     (941) | (2,507) | 
+-----------------------------------------------------+--------+-----------+-----------+---------+ 
| Cash flows from operating activities                |        |    23,729 |    23,752 |  11,481 | 
+--------+--------+--------+--------+--------+--------+--------+-----------+-----------+---------+ 
 
 
  12    Cash flow from operating activities continued 
b.    Cash and cash equivalents for the cash flow statement 
+--------+--------+--------+--------+--------+--------+--------+-----------+-----------+---------+ 
|        |        |        |        |        |        |        | Unaudited | Unaudited | Audited | 
+--------+--------+--------+--------+--------+--------+--------+-----------+-----------+---------+ 
|        |        |        |        |        |        |        |        28 |        28 |      52 | 
|        |        |        |        |        |        |        |     weeks |     weeks |   weeks | 
+--------+--------+--------+--------+--------+--------+--------+-----------+-----------+---------+ 
|        |        |        |        |        |        |        |     ended |     ended |   ended | 
+--------+--------+--------+--------+--------+--------+--------+-----------+-----------+---------+ 
|        |        |        |        |        |        |        |        10 |        12 |      28 | 
|        |        |        |        |        |        |        |   January |   January |    June | 
+--------+--------+--------+--------+--------+--------+--------+-----------+-----------+---------+ 
|        |        |        |        |        |        |        |      2009 |      2008 |    2008 | 
+--------+--------+--------+--------+--------+--------+--------+-----------+-----------+---------+ 
|        |        |        |        |        |        |        |   GBP'000 |   GBP'000 | GBP'000 | 
|        |        |        |        |        |        |        |           |           |         | 
+--------+--------+--------+--------+--------+--------+--------+-----------+-----------+---------+ 
| Cash and cash equivalents                           |        |     5,412 |     2,088 |   1,088 | 
+-----------------------------------------------------+--------+-----------+-----------+---------+ 
| Bank overdraft                                      |        |         - |   (1,948) |       - | 
+-----------------------------------------------------+--------+-----------+-----------+---------+ 
| Net position                                        |        |     5,412 |       140 |   1,088 | 
+--------+--------+--------+--------+--------+--------+--------+-----------+-----------+---------+ 
13    Reconciliation of movement in net debt 
+--------+--------+--------+--------+--------+--------+--------+-----------+-----------+----------+ 
|        |        |        |        |        |        |        | Unaudited | Unaudited |  Audited | 
+--------+--------+--------+--------+--------+--------+--------+-----------+-----------+----------+ 
|        |        |        |        |        |        |        |        28 |        28 |       52 | 
|        |        |        |        |        |        |        |     weeks |     weeks |    weeks | 
+--------+--------+--------+--------+--------+--------+--------+-----------+-----------+----------+ 
|        |        |        |        |        |        |        |     ended |     ended |    ended | 
+--------+--------+--------+--------+--------+--------+--------+-----------+-----------+----------+ 
|        |        |        |        |        |        |        |        10 |        12 |       28 | 
|        |        |        |        |        |        |        |   January |   January |     June | 
+--------+--------+--------+--------+--------+--------+--------+-----------+-----------+----------+ 
|        |        |        |        |        |        |        |      2009 |      2008 |     2008 | 
+--------+--------+--------+--------+--------+--------+--------+-----------+-----------+----------+ 
|        |        |        |        |        |        |        |   GBP'000 |   GBP'000 |  GBP'000 | 
|        |        |        |        |        |        |        |           |           |          | 
+--------+--------+--------+--------+--------+--------+--------+-----------+-----------+----------+ 
| Increase/(decrease) in cash and cash equivalents             |     4,324 |   (2,718) |  (1,770) | 
+--------------------------------------------------------------+-----------+-----------+----------+ 
| Cash flows from decrease in debt                             |    10,307 |    19,210 |    1,712 | 
+--------------------------------------------------------------+-----------+-----------+----------+ 
| Change in net debt resulting from cash flow                  |    14,631 |    16,492 |     (58) | 
+--------------------------------------------------------------+-----------+-----------+----------+ 
| Inception of new finance leases                              |   (2,670) |   (1,397) |  (1,795) | 
+--------------------------------------------------------------+-----------+-----------+----------+ 
| Movement in net debt in the period                           |    11,961 |    15,095 |  (1,853) | 
+--------------------------------------------------------------+-----------+-----------+----------+ 
| Net debt at beginning of period                              |  (28,264) |  (26,411) | (26,411) | 
+--------------------------------------------------------------+-----------+-----------+----------+ 
| Net debt at end of period                                    |  (16,303) |  (11,316) | (28,264) | 
+--------+--------+--------+--------+--------+--------+--------+-----------+-----------+----------+ 
 
 
14    Related party transactions 
There are no related party transactions requiring disclosure in the condensed 
set of financial statements. 
15    Seasonality 
Sales are subject to seasonal fluctuations, with peak Christmas demand in the 
second quarter of the year. In the year ended 28 June 2008, the 28 weeks to 12 
January 2008 represented 61% of annual sales. 
 
 
Responsibility statement 
 
The Directors confirm that this condensed set of financial statements has been 
prepared in accordance with IAS 34 as adopted by the European Union, and that 
the interim management report herein includes a fair review of the information 
required by DTR 4.2.7 and DTR 4.2.8. 
 
 
On behalf of the Board 
 
 
 
 
 
 
Mike Davies 
                                                                           John 
Wall 
Chief Executive 
 
Finance Director 
 
                                                                              17 
February 2009 
 
 
 
Auditors' report on review of condensed consolidated half-yearly financial 
information 
 
Introduction 
We have been engaged by the Company to review the condensed set of financial 
statements in the half-yearly financial report for the 28 weeks ended 10 January 
2009, which comprises the consolidated income statement, consolidated statement 
of recognised income and expense, consolidated balance sheet as at 10 January 
2009, consolidated cash flow statement and the related notes. We have read the 
other information contained in the half-yearly financial report and considered 
whether it contains any apparent misstatements or material inconsistencies with 
the information in the condensed set of financial statements. 
Directors' responsibilities 
The half-yearly financial report is the responsibility of, and has been approved 
by, the Directors. The Directors are responsible for preparing the half-yearly 
financial report in accordance with the Disclosure and Transparency Rules of the 
United Kingdom's Financial Services Authority. 
As disclosed in note 2, the annual financial statements of Thorntons PLC are 
prepared in accordance with IFRSs as adopted by the European Union. The 
condensed set of financial statements included in this half-yearly financial 
report has been prepared in accordance with International Accounting Standard 
34, 'Interim Financial Reporting', as adopted by the European Union. 
Our responsibility 
Our responsibility is to express to the Company a conclusion on the condensed 
set of financial statements in the half-yearly financial report based on our 
review. This report, including the conclusion, has been prepared for and only 
for the Company for the purpose of the Disclosure and Transparency 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. 
Scope of review 
We conducted our review in accordance with International Standard on Review 
Engagements (UK and Ireland) 2410, 'Review of Interim Financial Information 
Performed by the Independent Auditor of the Entity' issued by the Auditing 
Practices Board for use in the United Kingdom. A review of interim financial 
information consists of making enquiries, primarily of persons responsible for 
financial and accounting matters, and applying analytical and other review 
procedures. A review is substantially less in scope than an audit conducted in 
accordance with International Standards on Auditing (UK and Ireland) and 
consequently does not enable us to obtain assurance that we would become aware 
of all significant matters that might be identified in an audit. Accordingly, we 
do not express an audit opinion. 
Conclusion 
Based on our review, nothing has come to our attention that causes us to believe 
that the condensed set of financial statements in the half-yearly financial 
report for the 28 weeks ended 10 January 2009 is not prepared, in all material 
respects, in accordance with International Accounting Standard 34 as adopted by 
the European Union and the Disclosure and Transparency Rules of the United 
Kingdom's Financial Services Authority. 
 
 
PricewaterhouseCoopers LLP 
Chartered Accountants and Registered Auditors 
Leeds 
17 February 2009 
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 
jurisdiction. 
 
This information is provided by RNS 
            The company news service from the London Stock Exchange 
   END 
 
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