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Investec has issued a "hold" recommendation on THT.
So, I was just a week out with my RNS timings!. Nevertheless the RNS is positive. I think THT is definitely in the recovery phase now. One to hold on tight too.
Lets hope for a trading statement tomorrow then! I have noticed there has been a shift in the dynamic of this share. Previously it rose pre-RNS, then lost about 50% of it gains before the rising over the next RNS. The trend now appears to be that of rising through the RNS and maintaining gains. This is similar to two companies I followed a few years ago - TTG and VLX, who crashed spectacularly (lost 90% of their value) only to recover back in full. Their recovery strategy was very similar to that followed by Thorntons at present. Lets see what happens here.
Also watch out for the Trading Statement on Wednesday,
Link to the annual report. Very positive. http://investors.thorntons.co.uk/download/pdf/AnnualReport2012.pdf
You are quite correct. I retract my speculative comment. Just getting a bit carried away!
I think there is a good chance of another re-rating if the concession news comes through in the trading update RNS next Wednesday.
Another directors buy today. http://investors.thorntons.co.uk/news-item?item=1167258294436085
Trading update due out next Wednesday. Hopefully we will get news of the ClintonCard/Thornton concession stand reopening. I increased my holding today.
Three Directors of Thorntons, bought combined shares at a total cost of some £221,000 yesterday at just under 30p. That's an amazing vote of confidences in the business..... Or they know something we don't?
Someone just bought 2M shares at full ask!
I've at last had chance to review these figures in detail. Everything is in line with last years forecast: sales, net debt, pension provision, closure programme, cash flow, etc. the only number that has significantly changed is profitability - improved from an expected loss of (£2.6m) to a profit of £0.9m. A swing of £3.5m, which I would argue is attributed to the benefits of the drop in cocoa price. Not only that, as betsybloom pointed out, the company would have used financial derivatives to lock in this price improvement over next years reporting period too, meaning we get a double improvement hit - the profit over the next period will be better than expected too. With all the benefits of improvement trickling through as well this is going to be one of those classic recovery companies. One to hold very tight onto, and my opinion, if anyone is interested, is a target of 35p to 40p over the next few months. Then rising +50p and beyond when dividend is re-established. Fill your boots!
Investec raises Thorntons target price from 25p to 30p.
Thorntons makes a profit of £0.9M, instead of an expected loss of £2.6m!
You need to look at the futures chart. It fell just under a year ago, so will be well and truely in this financial period.
I've been researching and posting regularly on Thorntons. For those that have missed some of my research (if you interested of course, I believe the dominant factor tomorrow will be the drop in cocoa prices through this year. Posted earlier this year. Cocoa prices have dropped even further over the past month and the futures are pointing towards a 5 year low of $2,000 per metric tonne, from a high last year of $3,500 per metric tonne! That a 40% drop in raw materials costs. I've been trying to figure out what this means and here are my calcs: from the company balance sheet, raw materials comes in at about £45M ish. Cocoa represents about 25% of raw materials = £11.25M for 2010/2011. If an improvement of 40% is realised, then that means gross profits will improve by £4.5m over 2011/2012. This represents x5 of last years gross profit alone, or 60% of gross profit in 2010, without doing anything different to the business! This also doesn't even factor in the drop in sugar prices, closure of loss making stores, restructure of the distribution business, or transformation of the long term business. If all this plays out to plan, we should be back above 50p and well into dividend territory! Keep a close eye on interims on 13 July and end of year results in sept 12.
Resistance is holding well at this level. I expected to see a fall this morning as per the last 2 RNSs, but as I think it might, it looks like a repeat of the 15th of feb RNS with a build Upto and through the RNS tomorrow. Good luck.
The chart this time looks different. instead of the rapid boom as per the last 2 RNSs, this has shown a climb on the run-up very similar to that around 15 Feb. after that RNS, the SP jumped 65%. We'll have to wait and see!
I wonder if we will make 30p by results next Wednesday?
Is it too early to call a breakout yet? Or am I just getting carried away?