Mixed bag for Thorntons PLC
Revenues up but profits down due to discounting and bad weather.
The company’s interim results for the 28 weeks ended 8th January 2011 show that revenues increased by 4.8% to £133.5 million (2010: £127.4 million). Profit before tax declined 8.5% to £8.3 million (2010: £9.1 million).
Thorntons says that adverse weather conditions in Q2 affected sales and profits and supply chain disruption caused incremental costs of £0.5 million.
Net debt has reduced by £0.6 million to £14.0 million against the same period last year
John von Spreckelsen, Thorntons' Chairman, said,"During a testing period, with weak consumer confidence and adverse weather, I am pleased to report continued market share gains for Thorntons, with group sales up 4.8%. Sales of Thorntons branded products increased 5.5%. The decline in profit before tax was caused by a combination of gross profit margin decline, which occurred due to changes in the sales channel mix and some discounting, as well as weather related impacts in Q2 on sales and disruption to the supply chain.
"Looking forward, we believe that we are well placed to continue to grow our Commercial, Franchise and Thorntons Direct operations. Trading in our Own Stores will remain difficult, however we are entering a period when a significant number of our Own Store leases will be approaching renewal. This will provide the opportunity to change the size and shape of the Own Store portfolio.
"Since the Second Quarter Trading Statement on 13 January 2011, Own Store trading on the High Street has been weak. As a result the Board is now more cautious about Own Store trading for the remainder of the current financial year and including the important trading periods of Mothers' Day and Easter. We expect Commercial Sales and Thorntons Direct to continue to grow.
"The Board anticipates profits before taxation and exceptionals* to be around the level reported last year. The interim dividend is being maintained at 1.95p."
Reported profit before tax and exceptionals for the year ended 26th June 2010 was £6.1m.
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