Sticky year for Thorntons

Thorntons reported a fall in pre-tax profits for the year to June as its stores faced challenging trading conditions.


Thorntons reported a fall in pre-tax profits for the year to June as its stores faced challenging trading conditions.

Chocolatier Thorntons reported a 2.4 per cent fall in pre-tax profits to £6.1 million for the year to June, on lower sales of £214.6 million (2009: £216.8m), as its range of stores faced challenging trading conditions.

Last year was one of mixed fortunes for Thorntons, which suffered a 3.5 per cent sales drop in its ‘Own Stores’ division to £129.8 million (2009:£134.5 million), with sales reducing by 15 per cent in its franchise outlets to £13 million.

However, Thorntons Direct, its online business, enjoyed impressive 15 per cent revenue growth to £9.2 million and the commercial sales division, which sells to supermarkets including Sainsbury’s, reported 9.8 per cent growth in sales to £62.6 million.

Finance director Mark Dobson explained that Thorntons had a ‘challenging year’, but argued that after stripping out impairment charges of £800,000 and £600,000 of redundancy costs, underlying pre-tax profits actually rose 14.2 per cent to £7.5 million, with Dobson enthusing that ‘the chocolate market in general is continuing to grow.’

Whilst the pension scheme deficit increased by £3.1 million to £24.2 million, debt was pared by £700,000 to £26 million and Dobson emphasised that ‘we know dividends are important to investors’.

Although Thorntons’ widening pension scheme deficit is a worry, the company retains substantial asset backing via property assets of £58.5 million and is consistently cash-generative. Broker Investec is forecasting 13.1 per cent growth in profits to £6.9 million for the current year, on a 3.87 per cent increase in revenue to £222.9 million.

Nick Britton

Nick Britton

Nick was the Managing Editor for growthbusiness.co.uk when it was owned by Vitesse Media, before moving on to become Head of Investment Group and Editor at What Investment and thence to Head of Intermediary...

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