Disappointing First Half From Thorntons
Thorntons has reported a decline in both first half sales and profits as the British confectionery manufacturer and retailer continues to transform its business from one focused primarily on retail distribution towards an emerging international FMCG company with a strong UK multichannel retail division. Overall sales decreased by 8.2% to £128.2 million and profit before tax and exceptional items declined by 8.8% to £6.5 million.
While Thorntons continues to anticipate an overall sales decline in its Retail division as it progresses with the planned reduction in its own store estate towards a longer-term ambition of between 180 and 200 outlets, the overall company sales decline during the period was the result of the unanticipated reduction in sales in Thorntons’ UK Commercial channel.
Total sales for the Retail division declined by 5.2% to £65.5 million. Sales in the FMCG division declined by 11.2% to £62.7 million as further growth in Thorntons’ International channel was offset by the unanticipated decline in the UK Commercial channel.
Jonathan Hart, chief executive of Thorntons, comments: “We report a mixed performance from our two divisions. Our Retail division delivered further like for like sales growth as a result of actions we have taken to improve its performance. Our FMCG division, however, suffered from difficult trading conditions in its UK Commercial sales channel. We responded quickly by controlling costs and production.”
He adds: “The difficult trading conditions in our UK Commercial channel have persisted into the second half. Ahead of our key spring seasons, we continue to be cautious in our expectations for the full year. We maintain strict control of costs and production and remain confident of our strategy. We are well positioned to take advantage of an improvement in consumer spending.”
Having considered the current and future capital requirements of the business, the board has decided not to pay an interim dividend. The board intends to adopt a progressive dividend policy as soon as the trading performance and prospects for the business allow.
