By the end of this year, Thorntons' (THT) 'fast moving consumer goods' (FMCG) division will account for more than 50 per cent of group revenue, overtaking the beleaguered retail segment. This is good news for the chocolate-maker because the strategy is central to a three-year plan to turn the business around.
And, this re-focus on higher margin FMCG has started to pay off: group underlying pre-tax profit more than doubled to £6.6m in the last financial year, pushing EPS back into positive territory. Sales in the FMCG division, which includes UK commercial, international and private label, grew 19 per cent to £101m, offsetting a 9 per cent fall in retail sales to £120m. That said, even retail saw some growth. Like-for-like sales here fell just 0.8 per cent and rose in the second half, a marked improvement on last year's 3.8 per cent slump. In fact, the bulk of the retail sales decline was down to 35 planned store closures. Meanwhile, international sales accounted for just 2.7 per cent of the group total, but grew by over 50 per cent, and is an area in which management sees considerable growth potential.
Investec has upgraded its current year pre-tax profit estimate from £6.8m to £7.2m, giving EPS of 7.6p.
| THORNTONS (THT) | ||||
|---|---|---|---|---|
| ORD PRICE: | 87p | MARKET VALUE: | £60m | |
| TOUCH: | 86p-87p | 12-MONTH HIGH: | 102.25p | LOW: 26.50p |
| DIVIDEND YIELD: | nil | PE RATIO: | 16 | |
| NET ASSET VALUE: | 24p | NET DEBT: | 166% | |
| Year to 29 Jun | Turnover (£m) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
|---|---|---|---|---|
| 2009 | 215 | 8.09 | 5.40 | 6.05 |
| 2010 | 214 | 6.14 | 6.50 | 6.05 |
| 2011 | 218 | -1.07 | -0.40 | 2.20 |
| 2012 | 217 | 2.21 | -1.40 | nil |
| 2013 | 221 | 5.17 | 5.60 | nil |
| % change | +2 | +134 | - | - |
