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Thorntons reports 60.4% rise in profits as it transforms into a multichannel business

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Thorntons today said it was succeeding in its strategy to transform itself into an international, multichannel, FMCG business, serving shoppers as their buying behaviour changes.

Chairman Paul Wilkinson, speaking as the chocolate manufacturer and retailer unveiled a 60.4% rise in full-year profits, said it had completed the first three-year phase of a change programme designed to reflect “the continually evolving nature of shopper behaviour reflected in today’s multichannel retail environment.”

“This requires us to have our product available wherever, whenever and however our customers choose to shop,” he added, “whilst at the same time retaining critical mass in our supply chain to maintain the efficiency of our manufacturing and supply chain operations.”

Thorntons today announced profits before tax and exceptional items of £7.5m in the year to June 28, up by 60.4% on £4.7m at the same time last year. Sales grew by 0.6% to £222.4m.

Notwithstanding online sales growth of 14.3% to £6.4m, total retail sales fell by 5.6% to £111.4m, although like-for-like sales grew by 1.1% – which the retailer said was its best performance for more than six years. In his report, chief executive Jonathan Hart said Thorntons’ online business had returned to growth following “challenges” that came as it launched its new website in the autumn of 2012. He said it planned to invest in the online channel, now integrated into Thorntons’ retail division, optimizing links with stores in order to “focus on the bottom line contribution from this channel.”

Own-store retail sales fell by 7.4% to £94.9m from £102.5m last time, as the retailer closed 36 stores in line with its strategy of resizing its store estate towards a target of between 180 and 200 stores. Commercial sales grew by 9.7% to £99.4m while international sales were up by 4.9% at £6.4m, and private label sales fell by 17.5% to £5.2m.

Hart said the company had “started a journey towards putting shoppers at the heart of everything we do, and, over the past year, our shoppers have begun to see the results of this.”

He said: “We are pleased with these results which indicate continued strong recovery in our profitability and are testament to the strategy we put in place just over three years ago. The challenging environment and subdued consumer sentiment make our progress all the more notable. Our growth plans are not reliant on an economic upturn and we will further evolve our strategy as we move towards becoming an international FMCG (fast-moving consumer goods) business with a strong UK multichannel retail presence. Since the year end we have successfully refinanced the business to support this growth and transformation.”

Looking ahead, the company said it would continue to focus on shoppers while investing in the brand and in people, growing profit margins and sales.

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