UPDATE 1-Chocolatier Thorntons estimates 51 pct growth in annual profit

Thu Jul 3, 2014 7:44am EDT

(Adds analyst comments, details; updates share price)

July 3 (Reuters) - British chocolate maker Thorntons Plc estimated a 51 percent growth in full-year pretax profit, saying its UK commercial channel returned to double-digit percentage revenue growth in the fourth quarter.

Shares in the company rose as much as 8 percent, making the stock one of the top percentage gainers on the London Stock Exchange on Thursday.

Thorntons, which sells its products in its own stores as well as to supermarkets, also said its lenders have agreed in principle to provide an increased revolving credit facility of 75 million pounds ($126 million), running through October 2018.

"This increased facility will provide headroom for the increased working capital requirements associated with serving third-party retailers," Investec Securities analyst Nicola Mallard said in a note.

The company estimated pretax profit before exceptional items to have risen to 7.1 million pounds for the year ended June 28, in line with market expectations, from 4.7 million pounds a year earlier.

Analyst Peter Smedley of Charles Stanley Securities said the estimate "underpins our confidence that Thorntons continues to successfully navigate the recovery phase of its transformation strategy."

The brokerage has a "buy" rating on the stock with a target price of 200 pence.

The Derbyshire-based company, which has been expanding its online business, closed 10 stores in the third quarter, bringing down the number of own stores to 271.

Thorntons reported a 7.6 percent drop in third-quarter sales in April, hurt by early spring deliveries in the second quarter and lower UK commercial sales.

UK commercial sales declined by 8 percent in the third quarter. The company expects the sales channel, which accounted for about 40 percent of overall sales in 2013, to be the largest channel by the end of financial year 2014.

Thorntons shares were up 7 percent at 111.75 pence at 1140 GMT. ($1 = 0.5956 British Pounds) (Reporting by Aastha Agnihotri in Bangalore; Editing by Gopakumar Warrier and Don Sebastian)

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