News Column

Thorntons Confirms Full-Year Profit To Be As Expected, Up On Year

July 3, 2014

Rowena Harris-Doughty

LONDON (Alliance News) - UK chocolate maker Thorntons PLC Thursday said it expects its pretax profit before exceptional items for the year just ended to be in line with market expectations, and up on the prior year.

Back in April, Thorntons said it was on track for a pretax and pre-exceptional profit of around GBP7.3 million, despite recording a 7.6% drop in sales in the third quarter, hit by slower than expected sales in February and March for Valentine's Day and Mother's Day, as well as by store closures.

Thorntons said Thursday that it expects to report a pretax and pre-exceptional profit of GBP7.1 million.

Thorntons was hit hard by the financial crisis and ensuing economic downturn, when it embarked on an expansion of its UK store portfolio at a time of subdued retail spending. It then had to reverse its UK store expansion programme, closing unprofitable outlets while expanding its online presence.

The company is still heavily reliant on seasonal sales around Christmas, Easter and events such as Valentines Day, despite efforts to boost its sales by selling more chocolates through other people's stores and supermarkets, and to push out internationally using this method.

In Thursday's statement, Thorntons said that within its so-called fast-moving consumer goods division - which covers commercial trading and manufacturing operations - UK commercial sales returned to double digit percentage growth in the fourth quarter, after posting a 8% sales decline in the third quarter.

"The board remains confident that its strategy for the business continues to be effective," the company said.

Thorntons also said it has agreed an increased unsecured committed revolving credit facility of GBP75 million which will run to October 2018.

The company said it will release its fourth quarter trading update on July 9.

Thorntons shares were up 1.8% at 108.91 pence Thursday morning.

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Source: Alliance News

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