Thorntons milks the benefit of refurbishment and new lines

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The Independent Online

Thorntons, the chocolate manufacturer and retailer, reaped the benefits of a refurbishment programme to report a 28.5 per cent jump in sales growth over the past 14 weeks, fuelling hopes among investors that the company has put the worst of its troubles in the past.

The company, which operates 598 stores of which 228 are franchises, has spent £1.4m refurbishing its high-street locations and introducing new products, such as organic truffles, to its range of confectionery.

Like-for-like sales grew by 9.6 per cent over the period, partly thanks to the poor summer weather.

Thorntons Direct, the company's online gift and delivery service, also performed strongly with a 46 per cent jump in sales to £1.1m.

Although not all City analysts believe that Thorntons is out of the woods yet, yesterday's results were widely seen as a vindication of the strategy put in place by the chairman John von Spreckelsen, who joined the company last summer as Thorntons struggled against falling sales and earnings alerts.

Since Mr von Spreckelsen joined, the shares have rallied more than 80 per cent.

David Stoddart, an analyst at the broker Landsbanki, said that the sales were strong, but were always likely to be in comparison to last year's much weaker numbers.

In a note to clients, he said: "The temptation is to edge forecasts ahead, but the biggest quarter is yet to come, the comparables get tougher and there is the question over additional costs. In a flat UK market for chocolate and confectionery, the rating of just under 20 times seems rich. It reflects long-standing bid hopes that remain unfulfilled. Previous recoveries at Thorntons have shown early promise and then faltered."

Thorntons shares were among the biggest movers in the smaller-cap end of the market, jumping18p, or 10.4 per cent, to 190p.

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