27 Apr 2023 07:00
27 April 2023
Hotel Chocolat Group plc
("Hotel Chocolat", the "Company" or the "Group")
Trading Statement
Hotel Chocolat Group plc, a direct-to-consumer premium chocolate brand, today updates on strategic progress and recent seasonal trading.
FY23 Financial Highlights:
● | Previously announced as a transition year to re-shape the business in readiness for next stage of growth in FY24 onwards | |
● | Excellent progress achieved in closing stages of this financial year on cost base efficiencies in readiness for FY24 | |
● | Second half trading to 23 April, which included the Easter period, achieved high seasonal full price sell through of 86%, gross margin up by 500 basis points | |
● | UK retail like-for-like momentum reported for H1 in the interim trading update has continued to strengthen during second half | |
● | All channel Easter period sales lower than expected due to some range gaps which could not be addressed this year due to transition year efficiency focus, but which have already been addressed for future seasonal events. Digital and wholesale channels had lower revenues than initially planned due to focus on quality of earnings | |
● | Customer database growth achieved in H2 to date, with >2.75m VIP.Me members | |
● | Strong cash position with £23m in the bank and zero debt |
As a result, for FY23 the Group expects sales to be slightly lower than market expectations with underlying PBT now expected to be breakeven.
Following this previously announced transitional year and the excellent progress achieved in the closing stages of the year in readiness for FY24, the Board reconfirms its guidance of expecting to see a return to sales and EBITDA growth with a re-iterated target of 20% EBITDA margin by FY25 (pre IFRS 16 basis).
Confidence around the shape of the business in readiness for FY24 onwards is based on the work undertaken across the five 'business shapers' in FY23 which include:
● | Trading margin up by >500bps for beginning of FY24 | |
● | Manufacturing COGS material benefits achieved with inflation mitigation | |
● | Overhead efficiencies achieved during FY23 of £5m plus year-on-year on an annualised basis, with majority of benefit to be seen in FY24 | |
● | Cost of service material efficiencies underway to benefit FY24 | |
● | Total inventory reduced by 25%, with perishable inventory reduction of >50% |
In addition, effective work on growth drivers achieved in the later stages of FY23 in readiness for benefit in FY24 include:
● | Four new UK stores in legals with more expected for FY24 | |
● | New product pipeline reinvigorated after transition year, with launches appearing in the market from mid- summer onwards |
Angus Thirlwell, Co-founder and Chief Executive Officer of Hotel Chocolat, said:
"During this financial year, Hotel Chocolat has taken effective action to overcome the growing pains of rapid growth and scaling £200m in revenues. We are now well set up for the next stage of growth both in the UK and overseas key markets. Getting through these barriers to growth are a real test of culture and, I am unceasingly impressed by the strength of the Hotel Chocolat culture, as we remodelled our way through FY23.
"Our manufacturing and distribution is well invested now, with suitable headroom, liberating capital for future revenue growth. We can see more than 50 new locations for a Hotel Chocolat latest format store in the UK over the next few years and our adapted approach to international major markets is making sound progress.
"We are very grateful to our growing base of loyal and new customers, who are signalling that ethical and higher cacao premium chocolate is definitely worth it."
The information contained within this announcement is deemed by the Group to constitute inside information as stipulated under the Market Abuse Regulation (EU) No. 596/2014 as it forms part of UK domestic law by virtue of the European Union (Withdrawal) Act 2018.
The person responsible for arranging for the release of this announcement on behalf of the Company is Angus Thirlwell, Chief Executive Officer.
For further information:
Hotel Chocolat Group plc | c/o Citigate + 44 (0) 20 7638 9571 |
Angus Thirlwell, Co-founder and Chief Executive Officer |
|
Peter Harris, Co-founder, Development Director and Interim CFO |
|
|
|
Liberum Capital Limited - Nominated Advisor and Broker | + 44 (0) 20 3100 2222 |
Clayton Bush |
|
Ed Thomas |
|
Miquela Bezuidenhoudt |
|
|
|
Citigate Dewe Rogerson - Financial PR | + 44 (0) 20 7638 9571 |
Angharad Couch |
|
Ellen Wilton |
|
Alex Winch |
|
Notes to Editors
Hotel Chocolat is a premium British chocolate maker with a strong and distinctive D2C brand. The business was founded by Angus Thirlwell and Peter Harris, who are still executives within the business, and has traded under the Hotel Chocolat brand since 2003. The Group is unusual in being a grower (organic cacao farm in Saint Lucia), a manufacturer (Cambridgeshire) and owning its extensive direct to consumer channels (branded stores, websites). The Group was admitted to trading on AIM in 2016.