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Thorntons Drops to Lowest Since 1989 on Break-Even Forecast

Dec. 21 (Bloomberg) -- Thorntons Plc, a U.K. chocolate maker, said full-year profit will fall short of forecasts because people are spending less and supermarket promotions are affecting margins.

The stock fell as much as 13.5 pence, or 36 percent, to 24.5 pence, in London trading, the lowest since 1989. It was down 30 percent, at 26.5 pence, at 8.25 a.m. It has fallen 75 percent this year.

The company will break even at the pretax level when exceptional items, impairment and lease charges are taken into account, it said in a Regulatory News Service statement.

“What’s hurt Thorntons this year has been the fact there’s a lot more promotion in supermarkets and suppliers are invited to share some of that pain,” David Jeary, an analyst at Investec Securities, who has a “hold” recommendation, said by phone. “On a 12-month view the outlook could remain challenging.”

U.K. consumer confidence fell this month to its lowest level since February 2009 as pessimism about the economy increased amid continuing turmoil in the euro area, GfK NOP Ltd., a London-based research group, said today. An index of sentiment dropped two points from November to minus 33.

Thorntons, based in Alfreton, central England, said in October that 14-week total sales declined 7.6 percent to 46.5 million pounds ($73 million), in line with management forecasts. Own-store sales declined 10.1 percent to 23.4 million pounds in a “tough retail market.”

A further trading update will be issued on Jan. 12.

To contact the reporter on this story: Katie Linsell in London at klinsell@bloomberg.net

To contact the editor responsible for this story: Colin Keatinge at ckeatinge@bloomberg.net

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