Thortons has said that Christopher Burnett, its chairman, and finance group Newco have informed it that they wish to conduct “further analysis” before making any offer for the chocolate manufacturer.
On 19 August 2005, Thortons said that it had received a pre-conditional offer proposal from Christopher Burnett regarding a possible offer for the company at 185p (inclusive of any final dividend declared in respect of the year ended 25 June 2005).
In a statement today, Thortons said: “Since this time, Christopher Burnett and his funders (together called Newco) have been establishing a funding structure for Newco and conducting due diligence. However, in view of the company’s recent trading performance, Newco has informed the company that further analysis will be necessary and that it would thereafter intend to hold further discussions with the Independent Directors with regards to the possibility of any offer and the pricing thereof.”
Thortons is currently in discussions with the trustees of The Thorntons’ Pension and Life Assurance Scheme as regards the finalisation of the triennial actuarial valuation in relation to this defined benefit scheme.
“Only once this triennial valuation has been finalised will Newco be in a position to put forward a funding proposal to the trustees and to conduct its pensions due diligence,” the statement said.
“Accordingly, whilst discussions with regard to a possible offer for Thorntons are continuing, there can be no certainty that any offer will be forthcoming nor as to the terms (including the price) on which any offer might be made. A further announcement will be made in due course,” the company added.
Thorntons today reported sales figures for the 28 weeks ended 7th January 2006 that declined by 6.2% to £112.3m (US$197.8m).
In a trading update, Thortons said sales in its own shops declined by 6.4% to £80.0m on an estate of 369 shops, eight fewer shops than last year. Own shop like-for-like sales for the period were down 4.8%.
Franchise sales were down by 3.3% to £8.3m. At the end of the period there were six fewer outlets than in the first half last year. On a like-for-like basis, sales were down 5.3%.
Commercial sales, which comprise Thorntons branded products sold through other retailers, were down 0.7% at £13.4m. In the period there was an increase in sales to grocery multiples but a decline in sales to high street retailers following our decision to withdraw from these types of account.
Private label commercial sales declined by 19.0% to £7.1m due to the absence of repeat orders for some seasonal products manufactured for Christmas 2004
Thorntons Direct sales increased by 3.5% to £3.5m.
Burnett said: “It is disappointing that we have suffered a sales decline in the first half year which includes Christmas, our most important season. The major cause was the widely publicised poor retail footfall that persisted throughout the period. We have sound promotional plans already in place for every seasonal event in the second half, especially Easter, but believe that trading conditions will remain very challenging. It is likely that the disappointing sales in the year to date and the uncertain trading outlook will have a material impact on trading performance for the year although, clearly, management will endeavour to reduce costs wherever possible in the second half.”