After posting its first increase in like-for-like retail sales for 10 quarters in July, Thorntons followed up the good news this week by turning in an unexpected full-year profit.

The confectioner reported pre-tax profits of £900,000, beating Investec’s break-even forecast and prompting the broker to hail Thorntons’ second half performance as “the best for three years”. Despite this, there is still a long way to go before Thorntons shares reach 2009 levels. On Wednesday, the day the results were released, shares leapt 8% to 28.9p, having stood almost 100p higher three years ago.

A good performance over the busy Christmas trading period will be crucial to close the gap and validate CEO Jonathan Hart’s turnaround plan, which involves the closure of up to 180 stores between 2011 and 2014. Last year, a poor run into the festive season caused shares to drop from 37p to 10p in a month.

On Monday, Associated British Foods published a typically detail-light trading update that gave a mixed impression of performance ahead of the year end. The owner of Primark and Allied Bakeries reiterated its forecast that second-half profits would be ‘substantially ahead’ of last year. However, it also warned of a £100m impairment charge relating to its struggling Australian meat business and said margins at Kingsmill baker Allied Bakeries would come under further pressure from rising wheat costs.

The shares dropped more than 1% to £12.80 on the day, marking a rare setback for the stock. Since the start of 2012, shares have risen 15%, driven up by strong profits from the sugar division and the continued success of Primark.

It was also a bad week for Tesco meat supplier Hilton Food Group. Although it reported a 9.4% increase in half-year sales, operating margins retreated from 2.7% to 2.4% as a result of consumer downtrading in red meat. “With consumer incomes remaining under pressure, higher prices appear to have driven both falling volumes and downtrading to less expensive meat cuts such as mince and burgers at the expense of joints and steaks,” said Panmure analyst Graham Jones.

With little prospect of any sudden easing of margin pressures, shares in the meat supplier fell 5.5% on Tuesday to 281.3p.

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