London - British chocolate maker Thorntons PLC said its profit fell 10 percent in the first half due to an unexpected cut in orders from two of its grocery partners and warehousing problems at its UK commercial business.
Shares in the Derbyshire-based company fell as much as 8 percent and were among the top percentage losers on the London Stock Exchange on Monday.
“This year they will probably make a small loss in the second half given the disruption they have experienced with those two customers,” analyst Matthew McEachran of N+1 Singer told Reuters.
The company, which had in December warned of a decline in full-year earnings, did not name the two grocery partners or specify the extent of the cut in orders.
Thorntons makes most of its profit in the first half and the key is to make some in the second half, McEachran said.
British grocers have been suffering due to price deflation, stagnant wage growth and increased competition.
Cash-strapped consumers have been shopping around to save money, shying away from big weekly shops and buying little and often in local convenience stores or online.
Thorntons' profit before tax and exceptional items fell to 6.5 million pounds in the 28 weeks ended Jan. 10 from 7.2 million pounds a year earlier.
UK commercial sales, which account for about 40 percent of overall sales, fell 12.4 percent.
Revenue dropped 8.2 percent to 128.2 million pounds.
Thorntons, which sells its products in its own stores as well as to supermarkets, said like-for-like sales in the retail division rose 2.2 percent.
The company, which has been shutting down high street stores to focus on its online business, closed 16 stores in the period, and now has 247 stores.
Thorntons' shares were down 2.7 percent at 70.50 pence at 09h38 GMT.
Reuters