Chocolate maker Thorntons (THT) is on track to become a fast-moving consumer goods (FMCG) business. Sales in the FMCG division exceeded those of its high-street stores for the first time ever, rising 15 per cent to £70.6m in the first six months of the year.
Seasonal specialities, such as advent calendars, pushed FMCG sales in the UK up 17 per cent to £62m, while the international business reported a 10 per cent rise in revenues to £4.5m. To support this growth, a third robot-packing machine went onstream in the autumn, and there are plans for further infrastructure investment this year and next, representing the biggest investment in manufacturing for 25 years.
Meanwhile, 15 high-street stores closed, with a further 25 slated for closure by the year-end. Comparable retail sales growth of 2.1 per cent reflects a 23 per cent rise in online sales, but also suggests efforts to improve the existing stores are paying off. This includes new chocolate ranges and refurbishments. 11 shops were revamped in the period, bringing the total number of upgraded outlets to 25.
Because of the shift towards higher-margin FMCG sales, margins improved significantly, lifting adjusted pre-tax profits by 47 per cent to £7.2m. Investec expects full year EPS of 7.2p (from 4.7p in 2013).
| THORNTONS (THT) | ||||
|---|---|---|---|---|
| ORD PRICE: | 155p | MARKET VALUE: | £ 106m | |
| TOUCH: | 154-156p | 12-MONTH HIGH: | 160p | LOW: 57p |
| DIVIDEND YIELD: | nil | PE RATIO: | 20 | |
| NET ASSET VALUE: | 27p | NET DEBT: | 106% | |
| Half-year to 11 Jan | Turnover (£m) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
|---|---|---|---|---|
| 2013 | 134 | 4.2 | 4.5 | nil |
| 2014 | 140 | 6.2 | 7.8 | nil |
| % change | +4 | +48 | +73 | - |
