Thorntons reports best retail like-for-like performance in six years

Like-for-likes increased 1.1% in the retail division in the 52 weeks to June 28 against a 0.8% fall in the same period last year.

Overall revenues increased 0.6% to £222.4m while profit before tax and exceptional items surged 60.4% to £7.5m.

Own-store sales fell from £102.5m to £94.9m as Thorntons closed a net 36 stores during the year, “in line with the strategy”. It now operates 260 stores.

Thorntons wants to bring its estate down to 180 to 200 stores. The retailer said: “Our commitment to the high street remains - our stores will continue to play an important and vital part in bringing our brand to life with our store teams leading the way in delivering an outstanding experience for our shoppers.”

Consumer Direct sales increased 14.3% to £6.4m while franchise sales increased 1.2% to £8.6m.

Thorntons chairman Paul Wilkinson said: “These results mark the end of the first three-year plan set out in the summer of 2011 to transform Thorntons into an international multichannel Fast-Moving Consumer Goods (FMCG) company with a strong UK multichannel retail presence, and I am pleased to report that we have made significant progress towards achieving this long-term objective.”

Thorntons chief executive Jonathan Hart said the results indicate “continued strong recovery in our profitability and are testament to the strategy we put in place just over three years ago”.

He said: “The challenging environment and subdued consumer sentiment make our progress all the more notable. Our growth plans are not reliant on an economic upturn and we will further evolve our strategy as we move towards becoming an international FMCG business with a strong UK multichannel retail presence. Since the year end we have successfully refinanced the business to support this growth and transformation.

“We anticipate further growth in our UK Commercial channel during the first half of the current financial year. However, we expect this to be at a more modest level as a result of strong prior year comparatives, the continually changing marketplace and a marked reduction in the first quarter.

“Overall, we are confident that we can improve EBIT margin further and maintain positive profit growth for the full year, in line with market expectations driven by strong annual sales growth in our UK Commercial channel.”

Consensus for pre-tax profits for the year to June 27, 2015 is £9.65m.

Sales in Thorntons’ UK commercial arm, its largest channel, increased by 9.7% to £99.4m.

International sales were up 4.9% to £6.4m.

Private label sales fell by 17.5% to £5.2m.