||EPS - Basic
||Market Cap (m)
|Food & Drug Retailers
Real-Time news about Thorntons (London Stock Exchange): 0 recent articles
|fozzie: Share price reaction today would suggest that the market isn't too concerned about Hart's leaving. Another nice CA buy here would be nice.|
|nigelmoat: Think Crystal Ambers influence may well have had something to do with the demise of Jonathan Hart. After 4 years his reign has not produced any great results so glad to see this. Inevitably share price may take an initial dip but longer term see today's announcement as a good move. Others agree?|
|lauders: Max, while I appreciate your enthusiasm I really think it is way off the mark at the moment. Somehow I doubt the words "rocket", "shoot" etc... have any chance of being used with regards to the share price heading north for anytime in the near future, let alone looking well into the future. I really hope I am mistaken, but somehow doubt I am in this particular case. Better to talk reality than let your imagination get carried away IMO!|
|onjohn: cheap and nasty chocolates
just like the share price, looks like it may head to 40p|
|jeffcranbounre: Thorntons is featured in today's ADVFN podcast.
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|speedsgh: FWIW here is Paul Scott's take on today's Trading Update...
Share price: 81.2p
No. shares: 68.6m
Market Cap: £55.7m
Checking the archive, I reported on Thorntons 7 times in 2014, and was generally negative, due to erratic trading, low margins, and a balance sheet with too much debt and a pension deficit. My last report was on the profit warning on 23 Dec 2014, where I still wasn't interested in dabbling in these shares despite them falling from 120p to 91p on the day. It's worth about 50p per share to me, tops.
Trading update - covering the 14 weeks to 10 Jan 2015 is issued this morning. It's mixed. The shops delivered a strong LFL sales performance - up 5.0% for the quarter, which is very good in my view. pre-Xmas was particularly strong, with a +7.8% LFL performance in the 4 weeks to 24 Dec 2014.
However, the commercial division (supplying supermarkets & others) has seen poor trading, with sales down 10.3%. The two divisions are roughly the same size in turnover terms. Thorntons says that it experienced "challenges with specific grocers" - which to my mind is code for them being squeezed extremely hard on price & therefore margins by increasingly desperate supermarket chains, which are engaged in a battle to the death - with their suppliers being the people who are going to take the pain, whether they like it or not.
Valuation - this is tricky, as unless I've missed it, I can't see anything in today's statement relating to profitability. Current broker estimates are for 10.3p EPS this year. Is that do-able? I would have thought the risk is of more downgrades, following the pattern of the last year.
The weak balance sheet is another factor to take into account when valuing this share. I went through this issue in detail on day of the last annual results, here. The pension deficit requires overpayments of £2.75m p.a., which is a large chunk of their profits. It's not clear to me how the bank debt will ever be repaid. Although there is freehold property within fixed assets, which helps keep banks happy, since it's rock solid security on loans.
There are not likely to be divis of any significance for a while, perhaps ever, in my view either (divis stopped in 2011), despite management making noises about reinstating a divi - I don't see how they can take such a risk with this balance sheet, as it would be reckless.
My opinion - I still don't like it. The strategy is questionable now too. The company has made a great song & dance of transforming itself into an FMCG company, instead of just a retailer, but it's actually now the retail bit that is doing well, and the FMCG bit that is under pressure!
There's very little profit, and over a third of forecast profit will be sucked into the pension fund in over-payments which are likely to go on for years, especially if interest rates don't rise significantly.
I think there are probably better opportunities out there than this. Although the brand is still fairly desirable, and the last time someone put a box of Thorntons in front of my family, we emptied the box in about 10 minutes (it was a 2-layer box too!!), with approving "ummm"s coming from everyone!|
|lauders: Well tomorrow is the day we will find out some extra news, good or bad! If Crystal Amber's view is anything to go by then I hope they/we will be rewarded in due course. The shop closures (cost savings) and international expansion of the product line will hopefully show progress to offset the poor management of the warehouse and supermarket issues. Here is what Crystal Amber had to say about THT in their last results:
Thorntons PLC ("Thorntons")
Thorntons is a manufacturer and retailer of chocolates. From its factory in Derby, it supplies its retail estate and third party grocers with a range of boxed chocolates and other specialties. Thorntons is the UK market leader in the £205 million inlaid boxed chocolate category, with a 35 per cent market share. Despite years of underinvestment in product and stores, Thorntons remains a well-recognised brand, and our survey research confirmed that it retains considerable consumer goodwill.
Thorntons listed in 1988, reporting £64 million of revenues and £6.4 million of profits. Around that time, it embarked on the construction of its chocolate factory, a grandiose project that would necessitate a considerable growth in sales to become economic. The resulting factory is believed to be the most efficient of its kind in managing the complexities of mass producing inlaid boxed chocolates. To achieve sufficient utilisation of its new factory Thorntons, which used to sell its products exclusively through its own estate and Marks & Spencer, initiated a strategy to grow to its estate to the maximum. The company grew its own store numbers from 188 to a peak of 410 in the year 2000. A quarter of those had been added in just three years, following the arrival of a new CEO. Location and size of Thorntons' stores changed from small shops near the high street to include bigger sites in prime locations. Costs grew faster than revenues, and profits were squeezed. In the meantime, customers moved their food purchases in the opposite direction to Thorntons, away from speciality grocers in the high street and towards supermarkets, where the Thorntons brand was not available. A much higher cost base compressed margins, and when austerity hit revenues, Thorntons' profits vanished.
In 2011, the company set out a new strategy to halve its retail estate and grow commercial sales. This implicitly acknowledged the change in consumer behaviour and the need to maintain factory volumes. Thorntons has been fortunate in that, following its binge on new store leases during the 1990s, many of them are coming up for renewal now, and will be terminated. The cost base is therefore expected to reduce as more profitable commercial sales take off. Thorntons also set out to refresh its product range, which had suffered from years of short-termism and poor management.
This strategy appears very sensible to us, as it acknowledges the changing habits of consumers and reduces the operational gearing in the business. The product refresh should revitalise this century old British brand and allow its ability to deliver affordable quality treats to shine through again. Margins should grow from the cost base reduction and more efficient production of a reduced product range. We share the view of some stakeholders that eight per cent margins are within reach.
Three years into the new management's strategy, shop numbers are down to 260 and profit before tax has improved to £7.1 million (2013: £4.7 million). In 2014, results showed the volatility inherent in an FMCG (fast moving consumer goods) business with large orders. A fall in sales to third party retailers in the Easter quarter unsettled investors and adversely impacted the share price. We note that year on year, those sales are up by 8 per cent. Furthermore, Thorntons' investment in its commercial team, by recruitment, will take more than a year to mature. In our view a material reduction in the breadth of its product range remains necessary to lower production costs, and improve margins. On the retail front, management have trialled new formats but have not yet established one clear template to roll out across its estate.
Since first investing in October 2012, and over the period, we have engaged with management and the board, other shareholders, suppliers and customers. We expressed our support for the stated strategy and urged management to take decisive action to deliver it.
We remain confident that operating margins can increase significantly above the 2014 five per cent forecast and beyond analyst forecasts of 6.8 per cent for 2016. Additionally, international sales can boost top-line growth as the business benefits from its brand recognition, particularly in territories with expatriate consumers.
In our view the brand and the manufacturing site could be attractive to an overseas confectioner with limited UK presence. By reducing its stores and the associated operating leases, the business will become more attractive to other confectioners. However, in our view, to maximise shareholder value the company should remain independent while it delivers tangible improvements.
Who are Crystal Amber:
Crystal Amber Asset Management (Guernsey) Limited
Crystal Amber Fund Limited ("the Company" or "the Fund") is an activist fund which aims to identify and invest in undervalued companies and, where necessary, take steps to enhance their value. The Company aims to invest in a concentrated portfolio of undervalued companies which are expected to be predominantly, but not exclusively, listed or quoted on UK markets (usually the Official List or AIM) and which have a typical market capitalisation of between £100 million and £1,000 million. Following investment, the Fund and its advisers will also typically engage with the management of those companies with a view to enhancing value for all their shareholders.
After their top-up in October last year, after the above was issued but before the bad trading update on 23rd December, they now hold 8,937,250 shares if my research is correct. So tomorrow they have a lot riding on what is said!|
|bigdazzler: Bit statement of the obvious wanttowin. If there was a knicker wetting reason the company was aware of specific to the company that would have impact on shareprice they would have to notify via RNS.
No company is going to reply to an email from one of us retail investors and say something like ' yeah I glad you emailed us we are deep in the do do and that is why the company share price is going down but don't tell anyone will you. Love and kisses the board.'
There are many reasons why THT price has fallen, there are many reasons why lots of growth companies and recovery stock prices have fallen over the last few months. There are many macro issues why certain stocks are currently falling.
Markets are forward looking investors need to be the same both on the long and short term.
I know last sentance seems patronising it's not meant to and I am not saying that I get everything right,far from it.
Euphoria and pessimism work very strongly in the markets and it's a great concept to get your head round and helps you to confidently buy when people are selling and sell when people are buying. Clearly you still have to have picked the right share and still need to be buying selling at the right times. I personally use T.A for this.|
|jfacwc: my google shares chart shows 250 back in the 90's. since then 200 has been a sort of ceiling. Time to start new highs.aside: all very well ADVFN app on the Ipad showing THT share price as Blue and up 1.3% which is nice. Trouble is the Bid price is down 0.5%. Does ADVFN want us to just feel happy?|
|2breakout: Read the times piece on jonathan hart earlier. Tht share price is only back to where it was when he joined, Im sure he's aiming much higher. This could go higher than many are expecting over the next two years, with the momentum currently in the business. Id really like to know more about what tht make for others but guess it is kept under lock wnd key. Do they make tesco chocobloc range and do they make own label chocolates for the supermarkets.|
Thorntons Plc share price data is direct from the London Stock Exchange