Shares in Thorntons were down on the FTSE All Share in morning trading after the chocolate maker reported a fall in pre-tax profit in the half year ended 8 January 2011.
The group said that revenue in the period increased 4.8 per cent to £133.5 million, but despite this pre-tax profit declined 8.5 per cent to £8.3 million. Net debt was reduced from £14.6 million at the end of the same period the previous year to £14 million
Thorntons said that poor weather in the second quarter had affected sales and profits, adding that disruption to the supply chain had cost it £0.5 million. In addition the group said that trading in the current period "has been challenging".
Following the results Thorntons said it would be holding its interim dividend at 1.95 pence per share.
John von Spreckelsen, Chairman of Thorntons, said, "During a testing period, with weak consumer confidence and adverse weather, I am pleased to report continued market share gains for Thorntons, with group sales up 4.8%. Sales of Thorntons branded products increased 5.5%. The decline in profit before tax was caused by a combination of gross profit margin decline, which occurred due to changes in the sales channel mix and some discounting, as well as weather related impacts in Q2 on sales and disruption to the supply chain.
"Looking forward, we believe that we are well placed to continue to grow our Commercial, Franchise and Thorntons Direct operations. Trading in our Own Stores will remain difficult, however we are entering a period when a significant number of our Own Store leases will be approaching renewal. This will provide the opportunity to change the size and shape of the Own Store portfolio.
"Since the Second Quarter Trading Statement on 13 January 2011, Own Store trading on the High Street has been weak. As a result the Board is now more cautious about Own Store trading for the remainder of the current financial year and including the important trading periods of Mothers' Day and Easter. We expect Commercial Sales and Thorntons Direct to continue to grow.
"The Board anticipates profits before taxation and exceptionals* to be around the level reported last year. The interim dividend is being maintained at 1.95p."
By 10:05 shares in Thorntons were down 6.06 per cent on the FTSE All Share to 93.00 pence per share.