Store closures push Thorntons profits higher

CHOCOLATE maker Thorntons has delivered a sharp increase in annual profits as its strategy of shifting more sales into other retailers’ stores helped to overcome tough conditions on the high street.

Thorntons' sales are increasingly taking place outside the company's stores. Picture: PA

Chief executive Jonathan Hart, who is more than halfway through a three-year plan to restore the 102-year-old company’s fortunes, said “significant progress” had been made.

Underlying pre-tax profits leapt to £5.6 million for the year to 29 June, up from £851,000 a year earlier and ahead of analysts’ forecasts of £5.2m, as revenues rose 1.8 per cent to £221.1m.

Turnover at its 296 branches fell 8 per cent to £105.2m after 35 stores shut during the year, but like-for-like sales, which strip out the effect of closures, dipped just 0.8 per cent, an improvement on the previous year’s 3.8 per cent slide, and saw “small growth” in the second half.

Hart plans to close a further 40 sites this year to focus on a core network of 180 to 200 branches, but he vowed to maintain and revamp a “sizeable” estate, “demonstrating our continued commitment to the high street”.

He added: “We approach the year ahead with continued caution about the impact of the economy on the disposable income of our consumers, yet with a confidence that the actions we have taken will continue to deliver positive results.”

With Thorntons seeing more opportunities away from its own stores, commercial sales to supermarkets and other retailers jumped 11.2 per cent to £88.7m, while international takings surged 56 per cent to £6.1m.

Investec analyst Nicola Mallard raised her forecasts for the next two years following the better-than-expected results. She has pencilled in a pre-tax profit of £7.2m for the current year, up from £6.8m previously, rising to £9.6m for 2015.