The UK confectionery producer and retailer Thorntons has reported a 36% drop in full-year pre-tax profits to GBP5.2m (US$9.74m) for the fiscal year to 24 June 2006. The company also announced that chief executive Peter Burdon is to stand down once a successor is found.
Turnover for the year fell by 6% to GBP176.6m. Operating profits decreased from GBP10.4m to GBP7.3m. Like-for-like sales fell by 3.7% for the full year, the company said, but the like-for-like sales fall was less pronounced in the second half, at 1.8%.
However, Thorntons said chocolate sales fell further in the first month of the current fiscal year as a result of the hot weather in the UK in July, although this was partly offset by higher ice cream sales.
“While the decline in sales and profits is disappointing, the prospects and potential of the business remain positive,” said chairman John von Spreckelsen. “Thorntons’ excellent manufacturing base and supply chain, the quality of its products and its brand visibility and loyalty provide a robust platform for future growth.”
Speculation regarding a potential bid for Thorntons from Icelandic private equity group Baugur has continued. Von Spreckelsen said that “following a prolonged period of corporate uncertainty for the group, our focus will be on creating sustainable growth in sales and profits, which should in time result in enhanced shareholder returns.” He also said that Burdon would be departing on amicable terms.