Chocolate maker Thorntons today said trading remained challenging despite announcing a 10% rise in half-year profits.
Pretax profits rose to £13.3m in the six months to 8 January, with most growth coming from sales through other retailers amid “difficult” Christmas trading.
Thorntons is now pinning its hopes on a satisfactory Easter performance in order to meet full-year market expectations.
Chairman Christopher Burnett said: “The retail environment remains both competitive and challenging and the second six-month performance, as usual, will depend on the sales achieved over Easter.”
The group was lifted by its strategy of selling confectionery to other retailers, with sales to other stores increasing by £9.8m to £13.4m in the six months.
Thorntons chocolates are now stocked by stores such as Tesco, Sainsbury’s, WH Smith and Woolworths, following a strategy change aimed at halting a five-year run of declining profits.
The company, based in Somercotes, Derbyshire, said that in the two years since it embarked on this strategy, sales to other stores had grown rapidly and should come in at around £20m for the full year.
Burnett said the company was continuing to monitor the progress of this, in order to ensure it was not adversely affecting the Thorntons brand.
Total group sales increased by 9.5% in the six months to £119.7m.
Sales at the firm’s own stores fell by 0.3% to £85.4m although there were 11 fewer shops than last year. On a like-for-like basis – stripping out store openings and closures – sales were 0.8% higher.
The group also sells its products through 200 franchises.
These sales were 9.3% higher at £8.6m, but fell by 4.1% on a same-store basis. Thorntons has suffered in recent years as hot weather and reliance on seasonal events, such as Easter, have caused peaks and troughs in demand for its speciality chocolate, toffee, boiled sweets, cakes, drinks and ice-cream.
The group has been closing non-core outlets in the last three years, leaving it with around 380 stores across the UK and Ireland.
The interim dividend was left unchanged at 1.95p. Shares lifted 2%, up 3p to 156.5p today.
References: EGi News 22/02/05
