LONDON (SHARECAST) - Chocolate retailer Thorntons said full year profit before tax and exceptional items fell sharply in the face of continued tough trading conditions as it omits it final dividend payment and seeks margin improvements and cost savings.
Adjusted pre-tax profit fell to £0.9m for the 53 weeks ended 30 June 2012 from £4.3m the same time a year earlier. Pre-tax losses widened to £2.21m during the period compared to £1.071m in 2011. Revenues slipped to £217.1m from £218.3m previously.
"This performance was affected by weak consumer demand caused by a decline in discretionary income, combined with structural problems in many of the UK's High Streets, which continued to suffer from high vacancy rates and weak footfall," Thorntons said.
A final dividend payment has been omitted compared to a 2.20p payment in 2011.
Chief Executive Jonathan Hart commented: "Despite the challenge to profitability over the past year, in particular during a difficult first half, the actions we have taken have started to deliver benefits during an improved second half."
He added: "We do not foresee the economic landscape improving in the near future. We have made our plans accordingly and believe that the actions we have taken and continue to take will deliver improvements to profitability. We therefore approach the coming year with cautious optimism."
In a separate statement the company announced that senior independent director Paul Wilkinson will replace John von Spreckelsen as Chairman after his retirement on 1 February 2013.
John von Spreckelsen said: "Martin has extensive experience in the marketing and commercial development of consumer brands and we look forward to his future contribution."
Overall own store sales fell 5.8% to £111.4m after store closures and declines in like-for-like performance. Own Store like-for-like sales declined by 3.8%.
Thornton's store closure programme is on track with 36 stores to be closed in the course of the financial year.
Franchise sales for the period declined 7.8% to £10.7m. Thorntons Direct sales increased 4.2% to £10m after good performances at Christmas and Easter.
Net debt at period end increased to £29.1m from £24.5m before.