Thorntons waives divi, profit plunges after discounting

Chocolatier Thorntons said pre-tax profit more than halved after heavy discounting and waived its interim dividend payment.

Profit before tax and exceptional items fell to £3.1m for the 28 weeks ended 7 January 2012 from £8.4m in 2010. Revenues for the period declined to £130m from £133.5m previously.

The group, which last year closed a string of its shops, said sales in its own stores dropped by 7.9% to £68.3m in the six-month period.

Subscribe to MoneyWeek

Subscribe to MoneyWeek today and get your first six magazine issues absolutely FREE

Get 6 issues free

Sign up to Money Morning

Don't miss the latest investment and personal finances news, market analysis, plus money-saving tips with our free twice-daily newsletter

Don't miss the latest investment and personal finances news, market analysis, plus money-saving tips with our free twice-daily newsletter

Sign up

Online sales fared better with sales up 5%. Thorntons expects launch a new website after Easter.

Chief executive Jonathan Hart said, "These results and the economic climate only reaffirm the need for change. We have a well-managed balance sheet, quality asset-backing and good cash generation. The board is confident that Thorntons has the expertise and the resources to successfully complete this transformation and restore profitability."

The interim dividend was waived but Thorntons said it has a commitment to return to progressive dividend in the future.

Net debt at period end was £16.2m compared to £14m the year before.

"The economic and retail environment will remain challenging and uncertain for the foreseeable future, certainly through 2012, but we are encouraged by our strong range for the remaining key spring trading seasons of Mothers Day and Easter and have a strong order book to support this," the retailer noted.