Shares in premium chocolatier Hotel Chocolat (HOTC:AIM) jumped 8.5% higher to 439.7p on Tuesday after full year earnings beat market expectations.
Despite the physical store estate being closed for six months of the year to 27 June, Hotel Chocolat was able to deliver revenue growth of 21% to £165 million while pre-tax profit jumped to £10.1 million from £2.4 million, comfortably ahead of analysts’ forecasts.
MULTI-CHANNEL SUCCESS
The key drivers of growth were increased direct-digital sales and wholesale digital partnerships sales, while in the UK the active customer database grew 31% to 1.8 million.
The same dynamic was at play in the US which saw overall revenues up 36% year-on-year despite store sales falling by 41%. The company benefitted from a fulfilment partnership with The Hut Group which facilitated scalable growth through a ‘capex light’ model.
Russ Mould, Investment director at AJ Bell commented: ‘It’s amazing how a business selling sweet treats and posh hot chocolate machines has become a digital sensation, but Hotel Chocolat has done just that.
‘Operating in a highly commoditised market, the business has found its niche and done some clever things to drive sales.’
In Japan the company’s joint venture partner opened a further 16 stores taking the total to 22 while online penetration remained below both the UK and US.
GENTLE FARMING CHARTER
In line with its mission to build a ‘pioneering position’ within the chocolate industry, Hotel Chocolat has launched a scheme in Ghana which produces 97% of its cacao beans, whereby it will voluntarily pay farmers a higher price (20% higher than Fairtrade) in return for sustainable farming practices.
The scheme will also ensure that children are able to participate fully in education with zero illegal child labour.
CURRENT TRADING
The company said that it had entered the new financial year in a strong position with increased customer numbers and multiple avenues for continued growth, spanning product ranges, channels and territories.
Hotel Chocolat is a current running Shares Great Idea.
