Chocolatier Thorntons (THT) has reported its best full-year earnings result since 2008, marking a reassuring end to a three-year plan to transform the business. Among other tactics, the plan involved focusing on profit over sales. That has clearly paid off: before exceptional costs, pre-tax profit surged 60 per cent to £7.5m during the year to 28 June. Chief executive Jonathan Hart said the progress was all the more notable given that it was achieved against a difficult retail backdrop.
In the fast-moving consumer goods (FMCG) division, which accounted for half of group revenue and is an area of particular focus for Thorntons, sales rose 8 per cent to £111m. That was thanks to strong trading in the larger UK commercial channel, which offset lower private label sales. In the retail business that has earned the company its household-name status, meanwhile, the store-closure programme continued apace, with 36 loss-making outlets shut during the year. Like-for-like sales inched up 1 per cent - the best performance for more than six years.
This year, Thorntons will continue to broaden its distribution in FMCG while investing in manufacturing and logistics. Mr Hart reckons the operating margin can be improved further, and expects profit growth this year.
Investec expects pre-tax profit of £9.4m for the current year, giving EPS of 9.7p, up from £7.5m and 8.9p in 2014.
| THORNTONS (THT) | ||||
|---|---|---|---|---|
| ORD PRICE: | 103p | MARKET VALUE: | £71m | |
| TOUCH: | 102-104p | 12-MONTH HIGH: | 168p | LOW: 85p |
| DIVIDEND YIELD: | nil | PE RATIO: | 13 | |
| NET ASSET VALUE: | 27p | NET DEBT: | 179% | |
| Year to 28 Jun | Turnover (£m) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
|---|---|---|---|---|
| 2010 | 214 | 6.1 | 6.5 | 6.05 |
| 2011 | 218 | -1.1 | -0.4 | 2.2 |
| 2012 | 217 | 2.2 | -1.4 | nil |
| 2013 | 221 | 4.3 | 4.6 | nil |
| 2014 | 222 | 6.0 | 7.8 | nil |
| % change | +1 | +39 | +70 | - |
