13 Jul 2021 07:00
13 July 2021
HOTEL CHOCOLAT GROUP PLC
("Hotel Chocolat", the "Company" or the "Group")
Trading Update
Hotel Chocolat Group plc, a premium British chocolatier and digital-led retailer, today announces a post-close trading update for the 52 weeks ended 27 June 2021 ("FY21"), an update on recent trading, the Group's financial position and outlook.
FY21 TRADING UPDATE | |||
● | FY21 revenue of £165 million | ||
○ An increase of 21 per cent compared to FY20. | |||
○ An increase of 24 per cent compared to FY19, being the last financial year before Covid impact. | |||
● | Since the previous trading update in May, Group trading has remained strong. With all channels open, Group sales for the 10 weeks from 19 April 2021 to 27 June 2021 grew 34 per cent compared to the same period in 2019, and 63 per cent compared to the same period in 2020 when all physical locations were closed. | ||
● | Having grown the UK customer database by 66 per cent to 3 million in the 18 months since December 2019, digital and subscription sales are now a substantially larger proportion of the Group's total revenue and have remained so after full store channel reopening. Increases in visits, conversion, and average order value have combined to substantially increase customer lifetime value (LTV). | ||
● | In the USA, product sales increased by 62 per cent on the prior year with over 75 per cent of sales achieved directly through the Group's US website. | ||
● | In Japan, the Group's joint-venture partnership grew sales by 277 per cent on the prior year, achieving over 50 per cent data capture from new customers. | ||
● | UK store performance since the reopening on 12 April has been encouraging. Strong trading in smaller cities and market towns has largely offset lower footfall in commuter and tourist locations. Following the end of the first lockdown in July 2020, sales from stores progressively increased from July to October and the Board anticipates a similar improvement in the coming months. | ||
● | 30% of the UK store estate has already been renegotiated to lower rents, either in the form of a lower fixed amount, or a reduced variable percent of sales. The remaining 70% of the estate has a lease event due in the next 24 months. | ||
● | Having raised £22million of new equity in March 2020, the Group has invested the capital in service for future growth as follows: | ||
○ UK digital investments | |||
○ UK chocolate factory footprint increased, in preparation for three new production lines which are all on-track for commissioning in FY22; | |||
▪ a fourth truffle-making line. | |||
▪ a second Velvetiser flake line for our home-drinks subscriptions. | |||
▪ an enlarged 'bean-to-bar' chocolate facility for super-premium fine cacao products and Unbelievably Vegan chocolate. | |||
○ UK Distribution Centre expanded from 113,000 sq ft to 207,000 sq ft. | |||
● | The Board now anticipates underlying pre-tax profit will be higher than its previous expectations. Preliminary results are scheduled for 28 September 2021. | ||
● | The Group has committed to repay the full amount of furlough support received in the financial year (£3.1m). | ||
FINANCIAL POSITION | |||
● | The Group remains well capitalised with cash on hand and access to a £25m 'CLBILS' Revolving Credit Facility with Lloyds Bank, that expires December 2021. To date, the Group has made no drawings against the facility. | ||
OUTLOOK | |||
● | The strength of the Hotel Chocolat brand has made it possible to serve customers in a wider range of ways, which has substantially increased LTV. Combining this with the enhanced ability to recruit larger numbers of customers on an attractive return, has driven these strong results, including underlying pre-tax profits, which are expected to be higher than previous expectations. | ||
● | Strong digital and subscription growth models work in harmony with a network of brand-building stores designed to drive deep customer-engagement and be a scaled and profitable source of new and future customer generation. | ||
● | The outlook for the wider economy is improving. Whilst some uncertainty remains with regards to the impact of any ongoing or future Covid-19 restrictions, the Board is encouraged by both the performance of the brand during a period of significant challenges and varying restrictions, and the strong potential for growth and success in the future. | ||
Angus Thirlwell, Co-Founder and Chief Executive Officer of Hotel Chocolat, said:
"I am fortunate to be able to say that the growth avenues ahead of us have never been better in Hotel Chocolat's history. The strategies we put in place two years ago are now delivering accelerated growth. Our Velvetiser in-home drinks system, our VIP and digital programmes, and our USA and Japanese joint-venture start-ups have step-changed our growth potential.
"Our goal of becoming the most tech-activated chocolate brand is moving forward in leaps and bounds and is already helping to power our major achievements and future growth. Indeed, this year we expect more than 50% of our sales to come from digital, partners, and subscription-continuity models, reflecting how Hotel Chocolat is growing and evolving. Our brand-building stores will continue to play a pivotal role in our digital-led business, with an unrivalled ability to introduce new customers to our brand.
"I am particularly excited by what we have achieved so far in the USA and Japan, two of the three largest economies in the world. We have great growth opportunities there for Hotel Chocolat and strong teams in place to drive and support it.
"We are proud to be making our chocolate in the UK and will be creating over 250 new roles this year as we grow our team, from designers and data gurus to engineers and apprentices.
"Passion Fruit & Mango Cacao Gin is proving a real hit this summer, as is new Peanut Butter drinking chocolate, Ice Cream of the Gods and our fabulous new range of coffee beans and pods, complete with an in-home pod recycler.
"The whole Hotel Chocolat family is very grateful for the support from our customers, and we are determined to drive forward our ethical programmes in the communities we work within and our cocoa growers as well as our environmental targets and initiatives."
This announcement contains inside information for the purposes of Article 7 of the Market Abuse Regulation (EU) 596/2014 (MAR), and is disclosed in accordance with the Company's obligations under Article 17 of MAR.
Enquiries:
Hotel Chocolat Group Limited | Tel: +44 (0) 1763 257 746 |
Angus Thirlwell, Co-Founder and CEO Matt Pritchard, CFO | |
Liberum (Nominated Adviser and Sole Broker) | Tel: +44 (0) 20 3100 2000 |
Clayton Bush James Greenwood | |
Citigate Dewe Rogerson | Tel: + 44 (0) 20 7638 9571 |
Angharad Couch Ellen Wilton Alex Winch
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Notes to Editors:
Hotel Chocolat is a premium British chocolatier with a strong and distinctive brand. The business was founded in 1993 by Angus Thirlwell and Peter Harris and has traded under the Hotel Chocolat brand since 2003. The Group sells its products online and through physical locations in the UK and abroad. The Group has a cocoa farm and eco-escape hotel in Saint Lucia, offering complete cocoa immersion through tree-to-bar experiences and wellness treatments. The Group also has a flagship restaurant and cacoa roastery in London's Borough Market: Rabot 1745. The Group was admitted to trading on AIM in 2016.