Upmarket jeweller Theo Fennell is on track to return to profit next year following a restructure, the return of its eponymous founder and plans to launch an affordable range.

The AIM-listed retailer cut its full-year loss before tax and exceptionals from £2m to £250,000 in the year to March 31. Turnover from continuing operations rose from £11.9m to £12.6m.

Like-for-like sales rose 6% but during the second half jumped by 23% and continued at the same rate in the first 10 weeks of the new year.

House broker Seymour Pierce said the performance beat expectations and forecast profits of £500,000 for 2010/11.

It also welcomed the introduction of a silver diffusion range, which it said would broaden Theo Fennell’s appeal and could be “transformational”.

Theo Fennell also plans to relaunch its website and expand internationally after overseas wholesale sales doubled last year.

The retailer, which undertook a £1.5m fundraising in April, said the return of Fennell has given it direction and new “creative impetus”.

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