Thorntons : Trading Statement

THORNTONS PLC

("Thorntons" or "the Company")

FIRST QUARTER INTERIM MANAGEMENT STATEMENT

For the 14 weeks up to and including 4 October 2014.

Thorntons announces first quarter trading update and remains confident in prospects for the current year 

At our full year results in September we advised that the timing of orders in our UK Commercial channel will increasingly cause fluctuations in our quarterly reporting, as Thorntons changes into an FMCG business. This trend has been evident in the first quarter and has led to a 12.8% reduction in sales in the division and an 11.9% decrease in overall Company sales during the period.

Based on current visibility of orders we expect this to reverse in the second quarter and that we will see year on year UK Commercial sales growth in the first half, albeit at a more modest level due to strong prior year comparatives.

For the full year, the Board remains confident that Thorntons will perform in line with market expectations* with consensus pre-exceptional profit before tax for the current financial year standing at £9.65m (2014: £7.5m), resulting in further strong profit growth.

FMCG Division

Divisional sales decreased by 12.8% to £20.8 million reflecting fluctuations in order patterns in our UK Commercial channel.

§ UK Commercial sales declined by 16.4% although the brand remained strong with market share** gained over the period (Nielsen: 12 weeks to 13/09/14).

§ International sales increased by 20.8%.

Retail Division

Divisional sales declined by 10.9% to £20.6 million. Twelve stores were closed and one relocated as we right size our retail estate to focus on long-term sustainable locations. This resulted in 249 Own Stores at the end of the quarter.

§ Like for like sales decreased by 3.7% reflecting a continuation of subdued consumer sentiment and weakness in footfall seen since Easter.

§ Franchise sales declined by 19.1% due to the timing of orders and franchisees experiencing similar weakness in footfall.

§ Consumer Direct sales increased by 3.2% as we increase our focus on growing channel contribution although this remains a small part of overall sales.

Jonathan Hart, Thorntons' Chief Executive, commented:

"We remain confident of improving EBIT margin further and maintaining positive profit growth for the full year, in line with market expectations* driven by strong annual sales growth in our UK Commercial channel.

"As we said in September we anticipated that sales for this quarter would be below last year as a result of the increasingly fluctuating order patterns in our UK Commercial channel. These fluctuations will become more significant within the context of the Company's performance as we continue to grow our FMCG business making quarterly comparisons less meaningful. As we demonstrated last year, these variances do not necessarily affect overall annual performance.

"We continue to make good progress with our strategy of rebalancing the business and have exciting plans in place for the key Christmas season. We remain mindful that the economic situation is still challenging for many of our shoppers and trade customers, although o ur growth plans do not depend on an economic upturn."

For further enquiries please contact:

Nadja Vetter / Emma Crawshaw / Georgina Hall, Cardew Group.               T: 020 7930 0777

*              The Board considers market expectations for the financial year ending 27 June 2015 are best defined by taking the range of forecasts of PBT published by analysts who consistently follow the Group. The current range of pre-exceptional PBT forecasts as at 10 October 2015, of which the board is aware, is £9.4m to £10.0m, with consensus at £9.65m.

**             Market share in Inlaid Boxed Chocolates increased by 1.8% from 34.9% to 36.7% and Total Boxed Chocolates increased by 0.3% from 12.6% to 12.9%. (Source: Nielsen data).

This document contains certain statements that are forward-looking statements. They appear in a number of places throughout this document and include statements regarding our intentions, beliefs or current expectations and those of our officers, Directors and employees concerning, amongst other things, our results of operations, financial condition, liquidity, prospects, growth, strategies and the business we operate. By their nature, these statements involve uncertainty since future events and circumstances can cause results and developments to differ materially from those anticipated. The forward-looking statements reflect knowledge and information available at the date of preparation of this document and, unless otherwise required by applicable law, the Company undertakes no obligation to update or revise these forward-looking statements. Nothing in this document should be construed as a profit forecast. The Company and its Directors accept no liability to third parties in respect of this document save as would arise under English law.