Select launch holds back Thorntons

THE COST to Thorntons of launching Select, its new up-market line, and redeveloping the core Continental chocolate assortments, has led to a pounds 200,000 fall in interim pre-tax profits as operating margins were squeezed, writes Topaz Amoore.

At pounds 7m, they were lower than the City had hoped for and the shares fell 10p to 200p. Operating profits in the six months to 9 January were up pounds 100,000 at pounds 7.7m.

John Thornton, chairman, said: 'It's fair to say the costs were a bit higher than expected, but they've all gone through this year. Select is an investment for the future of the business.'

Select contributes between 6 and 8 per cent of Thorntons' total sales, but is, as yet, available in only half its 442 UK shops.

Thorntons' turnover rose by 9.6 per cent to pounds 39.3m, as 30 new shops opened. Christmas sales were up by 8 per cent. Sales in France, where two new shops were opened, grew by 3.9 per cent.

Mr Thornton said retail sales during January and February were mixed although Valentine's Day showed good volume growth.

Interest charges rose from pounds 478,000 to pounds 650,000, largely due to currency hedging.

Earnings per share fell to 7.38p from 7.53p last time. The interim dividend is unchanged at 1.25p.