In its half-year results released today (February 25), the company reported an “encouraging performance” with revenues up 2.9% to £133.7M, with profit before tax and exceptional items up by £2.2M to £5.3M. Profit after tax rose by 49.3% to £4.0M.
Sales of Thorntons branded product in the UK commercial channel were particularly strong, rising by 16.1% to £51.8M. However, own-store sales fell by 8.3% to £62.6M – down from £68.3M in 2012. This was largely attributed to the closure of a further 13 stores in line with the firm’s long-term strategy.
Jonathan Hart, Thorntons’ chief executive, said: “We are encouraged by the overall progress we made during the first half of the year. This performance demonstrates that our strategy is generating results as we continue to rebalance the business, revitalise the brand and restore profitability.
Focus on innovation
“Our customers have responded positively to our increased focus on innovation, value and service and our market share has grown further. This reflects the continued strength of the Thorntons brand across our multi-channel distribution model.”
Sales were particularly strong in own-label, which grew from £0.8M in the previous year to £3.9M.
International sales rose by 57% from £2.6M to £4.1M.
Despite recognising today’s results as evidence that Thorntons’ strategy was working, City analyst Investec retained its ‘hold’ recommendation and 45p target price on stock.
An Investec statement said: “Trading since the January 19 statement has been in line with expectations. As ever for Thorntons, trading over Mother’s Day and Easter will define the full-year outcome.”
Hart said: “We have strong trading plans in place and exciting new products across all channels. We are confident in the actions we are taking but remain cautious given the continuing challenge of the economic climate.”