Thorntons has bounced back into profit for the first time since its acquisition by Ferrero in 2015, as it reaped the benefits of shuttering its flagging retail estate.

The chocolatier closed its entire network of retail outlets in April 2021, having suffered pre-tax losses of £26.7m in that period and £37.7m in the previous Covid-hit year.

The move away from retail to focus on fmcg supply resulted in a £10m drop in sales to £76.6m in the year to 31 August 2022. However, cost of sales dropped by almost £20m to £56m and administrative expenses almost halved to £21.7m.

That resulted in a positive operating profit for the year to £3m and a pre-tax gain of £1.9m.

A £20m tax credit pushed up headline profits to reach £22.2m.

The previous year’s losses took Thorntons’ total losses since its £112m takeover to more than £190m.

Thorntons retail sales themselves are now incorporated into the wider Ferrero UK, whose accounts reference Thorntons’ manufacturing business.

A company statement said: “Our continued investment in the Thorntons business has enabled our profitability reported this year.

“In the last year we have invested £15m into the Thorntons range and the manufacturing operation and infrastructure. The brand remains a key priority, and we will continue our commitment to ensure its sustainable growth,” it added.

The company particularly highlighted its Thorntons Classic range, which has been remastered to enhance flavour and quality, with the range growing over the last two years by more than 14%.

The wider Ferrero UK business saw headline sales climb 5.2% to £473.5m, with pre-tax profits of £10.9m, down from £13.6m.

Its Fox’s Burton’s Co biscuits arm fell to a £31.6m operating loss last year in its first accounting period since Ferrero merged the brands in February 2022, partly driven by elevated costs.

However, branded sales were up 12%, international sales up 20% in a “challenging but successful” eight months to the end of August 2022.

A company statement said: “We are facing the same challenges that many other companies are facing with cost pressures across commodities, packaging and energy which have resulted in operating losses during this period.

“We continue to focus on the long term growth of our brands through innovation and investment and anticipate faster growth in the coming months as we activate more brands in our portfolio.”

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