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.