Thorntons reports disappointing first half
Chocolatier Thorntons has reported a fall in both sales and profits in the first half of its financial year after it saw an unexpected reduction in orders from major supermarkets
Profit before tax and exceptional items was £6.5 million in the 28 weeks to 10 January compared to £7.2 million in the same period in the previous year.
Meanwhile, revenues declined to £128.2 million from £139.7 million previously.
Jonathan Hart, Thorntons chief executive, said: “We report a mixed performance from our two divisions. Our retail division delivered further like-for-like sales growth as a result of actions we have taken to improve its performance. Our FMCG division, however, suffered from difficult trading conditions in its UK commercial sales channel. We responded quickly by controlling costs and production.”
Thorntons said it was “disappointed” that the continued growth anticipated in its FMCG division was not delivered.
The division’s sales fell by 11.2% to £62.7 million as UK commercial sales declined by 12.4% to £54.7 million. This was the result of an unexpected reduction in orders from two of the retailer’s major grocery partners. There was also a degree of disruption in supply and service to customers due to short-term difficulties at the retailer’s new centralised warehouse.
The retail division reported a 2.2% increase in like-for-like sales boosted by an “outstanding” Christmas with December like-for-like sales growth of 7.8%. Consumer Direct sales increased by 11.4% to £4.5 million.
Thorntons said it is on track to close around 20 stores during the financial year as it looks to create a sustainable store portfolio of between 180 and 200 stores
Hart said: “Our retail performance and brand tracker demonstrate that the Thorntons’ brand continues to strengthen, providing us with the confidence that we can improve certain commercial relationships, focussing on sustainable growth.
“The difficult trading conditions in our UK Commercial channel have persisted into the second half. Ahead of our key spring seasons, we continue to be cautious in our expectations for the full year. We maintain strict control of costs and production and remain confident of our strategy. We are well positioned to take advantage of an improvement in consumer spending.”
