Change of tack helps Thorntons' profits soar
Thorntons posted a sharp turnaround in annual profits after surging sales in supermarkets helped offset tough conditions on the high street.
The group, which is closing stores and shifting more sales through other retailers, saw like-for-like revenues across its own shops fall 0.8% over the year to June 29, with overall turnover across the chain slumping 8% as it shut another 35 branches.
But commercial sales to other retailers jumped 11.2% to £88.7m, helping underlying pre-tax profits recover to £5.6m after falling sharply the previous year to just £850,000.
Chief executive Jonathan Hart, who is now two years into a three-year overhaul to restore the company's fortunes, said the group had made "significant progress" in transforming the business.
He plans to shut another 40 stores over the new financial year under aims to exit under-performing locations and focus on a core estate of 180 to 200 sites, down from just under 300 currently.
But Mr Hart vowed to maintain a "sizeable" store estate, with plans to refurbish its remaining shops, "demonstrating our commitment to the high street".
There have been signs of a recovery across its own stores as comparable sales edged 0.5% higher in the fourth quarter.
The group also said it hoped to see a return to growth in its online service, Thorntons Direct, by the end of 2013 after glitches with a new website launched last September hit sales, down 10% over the year to £9m.
Nicola Mallard, analyst at Investec Securities, said the firm's strategy was delivering "strong improvements" and upped forecasts for the next two years.
But shares eased back by 2%, having jumped 14% over the past two days after activist investor Crystal Amber increased its stake in Thorntons to 6.5%, saying it was betting on a recovery at the firm.
Underlying pretax profits at Thorntons – up sharply from last year's disappointing £850,000