THORNTONS PLC
CONSOLIDATED PROFIT AND LOSS ACCOUNT
Unaudited results for 28 weeks ended 8 January 2005
 
      For 52 weeks                                         Notes         For 28 weeks        For 28 weeks
     ended 26 June                                                    ended 8 January    ended 10 January
              2004                                                               2005     2004 (restated,
(restated,audited)                                                        (unaudited)          unaudited)
             £'000                                                              £'000               £'000
           178,746 Turnover                                                   119,746             109,344
          (85,181) Cost of sales                                             (56,907)            (49,642)
            93,565 Gross profit                                                62,839              59,702
          (65,622) Selling and distribution costs                            (36,088)            (36,778)
          (18,768) Administrative expenses                                   (11,386)            (10,385)
             (970) Exceptional items                         2                (1,229)                 264
          (19,738) Total administrative expenses                             (12,615)            (10,121)
               745 Other operating income                                         437                 430
             8,950 Operating profit                                            14,573              13,233
               634 Profit on disposal of properties                               279                 438
             9,584 Profit before interest                                      14,852              13,671
           (2,578) Net interest payable                                       (1,519)             (1,592)
             7,006 Profit before tax                                           13,333              12,079
           (2,037) Tax                                       3                (4,507)             (4,195)
             4,969 Profit for the financial period                              8,826               7,884
           (4,426) Dividends                                 4                (1,300)             (1,269)
               543 Retained profit for the period                               7,526               6,615
 
                   Key ratios
      7.64p        Basic earnings per share (pence)          5                 13.56p              12.12p
             8.82p Basic earnings per share before           5                 14.88p              11.86p
                   exceptional items (pence)
    7.38p          Fully diluted earnings per share          5                 13.32p              11.75p
                   (pence)
             8.52p Fully diluted earnings per share before   5                 14.61p              11.49p
                   exceptional items (pence)
       6.80p       Dividend per share (pence)                4                  1.95p               1.95p
 
 
 
Continuing operations
 
All amounts above relate solely to continuing operations.  In accordance with
FRS3, profit on disposal of properties is now disclosed after Operating Profit
for all financials periods.
 
Total recognised gains and losses
 
There were no material gains and losses incurred during the period other than
the profit for the financial period included in the consolidated profit and loss
account above.
 
Note of group historical cost profits and losses
 
       For 52 weeks                                                     For 28 weeks        For 28 weeks
 ended 26 June 2004                                             ended 8 January 2005    ended 10 January
                                                                                                    2004
          (audited)                                                      (unaudited)         (unaudited)
              £'000                                                            £'000               £'000
 
              7,006 Profit before tax                                         13,333              12,079
                280 Realisation of property revaluation gains of                   -                 122
                    previous periods
                  9 Difference between the historical cost                         2                   5
                    depreciation charge and the actual
                    depreciation charge for the period calculated
                    on the revalued amount
              7,295 Historical cost profit for the period before tax          13,335              12,206
                832 Historical cost profit for the period after                7,528               6,742
                    tax and dividends
 
 
 
 
CONSOLIDATED BALANCE SHEET
 
 
             As at                                                               As at               As at
      26 June 2004                                                      8 January 2005     10 January 2004
         (audited)                                                         (unaudited)         (unaudited)
             £'000                                                               £'000               £'000
                   Fixed assets
            80,329 Tangible assets                                              79,810              80,786
            80,329                                                              79,810              80,786
                   Current assets
            18,912 Stocks                                                       15,217              18,135
            12,818 Debtors                                                      16,412              14,626
             1,599 Cash at bank and in hand                                     17,165              12,197
            33,329                                                              48,794              44,958
                   Creditors: amounts due within one year
          (13,571) Bank loans, overdrafts and finance leases                  (17,809)            (11,640)
          (35,327) Other creditors                                            (36,841)            (35,763)
          (48,898)                                                            (54,650)            (47,403)
          (15,569) Net current liabilities                                     (5,856)             (2,445)
            64,760 Total assets less current liabilities                        73,954              78,341
          (14,022) Bank loans and finance leases                              (13,801)            (21,461)
             (546) Other creditors                                               (669)               (690)
          (14,560) Creditors: amounts due after one year                      (14,470)            (22,151)
           (8,562) Deferred tax provision                                     (10,165)             (8,199)
             (224) Onerous lease provision                                       (222)               (231)
           (8,786) Provisions for liabilities and charges                     (10,387)             (8,430)
            41,406 Net assets                                                   49,097              47,760
 
                   Capital and reserves
             6,663 Share capital                                                 6,666               6,658
            12,483 Share premium                                                12,505              12,424
               186 Revaluation reserves                                            186                 347
            24,384 Profit and loss account                                      32,050              30,641
           (2,310) Investment in own shares                                    (2,310)             (2,310)
            41,406 Equity shareholders' funds                                   49,097              47,760
 
                   Key ratios
            25,994 Net debt                                                     14,445              20,904
             62.8% Gearing                                                       29.4%               43.8%
 
 
 
MOVEMENTS IN EQUITY SHAREHOLDERS' FUNDS
 
 
                                                                         For 28 weeks        For 28 weeks
         For 52 weeks                                                 ended 8 January    ended 10 January
   ended 26 June 2004                                                            2005                2004
            (audited)                                                     (unaudited)         (unaudited)
                £'000                                                           £'000               £'000
                4,969 Profit for the financial period                           8,826               7,884
              (4,426) Dividends                                               (1,300)             (1,269)
                  543 Retained profit for the period                            7,526               6,615
                   90 New share capital issued                                     25                  26
                (895) Movement in investment in own shares                        140               (549)
                (262) Net increase in equity shareholders' funds                7,691               6,092
               41,668 Opening equity shareholders' funds                       41,406              41,668
               41,406 Closing equity shareholders' funds                       49,097              47,760
 
 
CONSOLIDATED CASH FLOW STATEMENT
Unaudited results for 28 weeks ended 8 January 2005
 
   For 52 weeks                                                              For 28 weeks       For 28 weeks
  ended 26 June                                                  Note     ended 8 January   ended 10 January
           2004                                                                      2005               2004
      (audited)                                                               (unaudited)        (unaudited)
          £'000                                                                     £'000              £'000
 
         18,132 Cash inflow from operating activities             6                23,282             17,208
        (2,825) Returns on investments and servicing of finance                   (1,479)            (1,537)
        (1,627) Taxation                                                          (1,063)              (803)
        (2,492) Capital expenditure and financial investment                      (4,074)            (2,064)
        (4,423) Equity dividends paid                                             (3,158)            (3,154)
          6,765 Cash inflow before use of liquid resources and                     13,508              9,650
                financing
            500 Management of liquid resources                                          -            (8,750)
             90 Financing - issue of shares                                            25                 26
        (9,808) Financing - increase/(decrease) in debt                             2,017            (2,028)
        (2,453) Increase/(decrease) in cash in the period                          15,550            (1,102)
 
 
RECONCILIATION OF NET CASH FLOW TO MOVEMENT IN NET DEBT
 
 
      For 52 weeks                                                          For 28 weeks       For 28 weeks
ended 26 June 2004                                                       ended 8 January   ended 10 January
         (audited)                                                                  2005               2004
             £'000                                                           (unaudited)        (unaudited)
                                                                                   £'000              £'000
           (2,453) Increase/(decrease) in cash in the period                      15,550            (1,102)
             9,808 Cash (inflow)/outflow from (increase)/                        (2,017)              2,028
                   decrease in debt
             (500) Cash outflow from increase in liquid                                -              8,750
                   resources
             6,855 Change in net debt resulting from cash                         13,533              9,676
                   flows
           (3,985) Inception of new finance leases                               (2,000)            (1,713)
                 - Exchange movements                                                 16                (3)
             2,870 Movement in net debt in the period                             11,549              7,960
          (28,864) Net debt at beginning of period                              (25,994)           (28,864)
          (25,994) Net debt at end of period                                    (14,445)           (20,904)
 
 
 
ANALYSIS OF NET DEBT
 
 
Group: for the 28 weeks                                     Other non-cash      Exchange        At 8 January
ended 8 January 2005         At 26 June 2004     Cash flow         changed      movement                2005
                                       £'000         £'000           £'000         £'000               £'000
Cash at bank and in hand               1,599        15,550               -            16              17,165
Debt due within one year             (9,615)       (4,300)               -             -            (13,915)
Debt due after one year              (7,914)             -               -             -             (7,914)
Finance leases                      (10,064)         2,283         (2,000)             -             (9,781)
Total net debt                      (25,994)        13,533         (2,000)            16            (14,445)
 
 
NOTES TO THE INTERIM FINANCIAL STATEMENTS
 
1.       Basis of preparation of the interim financial statements
 
The interim financial statements, which are abridged, comprises the unaudited
results for the 28 weeks ended 8 January 2005 and 10 January 2004  and the
audited results for the 52 weeks ended 26 June 2004.  The financial information
for the 52 weeks ended 26 June 2004 has been extracted from the Group's
statutory financial statements for that year.  In accordance with FRS3, profit
on disposal of properties is now disclosed after Operating Profit for all
financials periods.  The interim financial statements are unaudited and do not
constitute statutory accounts but have been formally reviewed by the auditors
and their report is set out on page 8.
 
2.       Exceptional items
 
 
    For 52 weeks                                                    For 28 weeks          For 28 weeks
   ended 26 June                                                 ended 8 January      ended 10 January
            2004                                                            2005                  2004
           £'000                                                           £'000                 £'000
 
                 Exceptional items comprise:
           (945) Reversal of amortisation on lapsed share                      -                 (594)
                 option schemes
             934 Unrecognised VAT liability from prior                         -                     -
                 periods
             685 Restructuring costs                                       1,229                     -
             296 Costs associated with abortive takeover                       -                   330
                 talks
             970 Total exceptional items                                   1,229                 (264)
 
 
 
 
Reversal of amortisation on lapsed share option scheme
 
Write-back of amortisation relating to 504,610 shares held by a trust in
connection with the Long Term Incentive Plan.  The plan lapsed in November 2003.
There is no cash impact arising from this item.
 
Unrecognised VAT liability from prior periods
 
Unrecognised VAT liability arising  between 1999 and 2002.  There is no cash
impact arising from this item.
 
Restructuring costs
 
Restructuring costs comprising redundancy and other costs directly relating to
the restructuring project.
 
Costs associated with abortive takeover talks
 
Costs associated with abortive takeover talks relating to consultancy and other
direct costs in connection with a possible offer for the Group.
 
3.       Tax
 
The tax charge, including deferred tax, for the 28 weeks ended 8 January 2005 is
based on the estimated effective rate for the 52 weeks ending 25 June 2005 of
33.28% (2004: 29.1%).
 
4.       Dividends
 
The Directors have declared an interim dividend of 1.95 pence per share (2004:
1.95 pence per share), which amounts to approximately £1,300,000 (2004:
£1,269,000).  The dividend will be paid on 29 April 2005 to shareholders
registered on 1 April 2005. The shares will be quoted ex-dividend on 30 March
2005.
 
5.       Earnings per share
 
The calculations of earnings per share are based on the following profit for the
financial period and numbers of shares:
 
                            2004                                 2005         2005                         2004   
                2004       Fully                                Basic        Fully               2004     Fully         
     2004      Basic     diluted                      2005   earnings      diluted    2004      Basic   diluted         
  Results   earnings    earnings                   Results        per     earnings Results   earnings   earnings   
    £'000  per share   per share                     £'000      share    per share   £'000  per share  per share
 
    5,737      8.82p       8.52p Profit before       9,686     14.88p       14.61p     7,710     11.86p     11.49p
                                 exceptional
                                 items
    (768)    (1.18p)     (1.14p) Exceptional         (860)    (1.32p)      (1.29p)       174      0.26p      0.26p
                                 items (post
                                 tax)
    4,969      7.64p       7.38p Profit for the      8,826     13.56p       13.32p     7,884     12.12p     11.75p
                                 financial
                                 period
 
Weighted average number of shares:
             2004                                                                       2005               2004
        Number of                                                                  Number of          Number of
  Ordinary Shares                                                            Ordinary Shares    Ordinary Shares      
 
       65,084,717 Basic weighted average number of ordinary shares                65,100,566         65,023,288
        2,283,205 Dilutive effect from share options                               1,180,303          2,091,912
       67,367,922 Fully diluted weighted average number of ordinary               66,280,869         67,115,200
                  shares
          £1.4283 Average market price of the Group's shares during the              £1.5849            £1.3569
                  period
 
6.       Reconciliation of operating profit to operating cash flows
 
     For 52 weeks                                                                For 28 weeks       For 28 weeks
    ended 26 June                                                        ended 8 January 2005   ended 10 January
             2004                                                                                           2004
                                                                                        £'000
            £'000                                                                                          £'000
            8,950 Operating profit                                                     14,573             13,233
               17 (Profit)/loss on disposal of fixed assets                               (3)                 15
           11,199 Depreciation charge                                                   5,891              6,071
               50 Amortisation charge/(credit)                                            140              (549)
              249 Non-cash movements in provisions                                        (9)                  -
           20,465 Operating cash flows before working capital                          20,592             18,770
                  movements
             (35) Cash flows relating to previous years provisions                        (3)               (61)
          (5,253) Decrease/(Increase) in stocks                                         3,695            (4,476)
             (65) (Increase) in debtors                                               (3,594)            (1,967)
            3,020 Increase in creditors                                                 2,592              4,942

           18,132 Net cash inflow from operating activities                            23,282             17,208