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HOTC - Hotel Chocolat News Story

295p 10.0  3.5%

Last Trade - 03/04/20

Sector
Consumer Defensives
Size
Mid Cap
Market Cap £357.6m
Enterprise Value £333.3m
Revenue £143.5m
Position in Universe 543rd / 1834

Britain's Hotel Chocolat tackles growing pains as profit rises

Tue 25th February, 2020 11:10am
LONDON, Feb 25 (Reuters) - British chocolatier Hotel
Chocolat  HOTC.L  is making progress with supply chain
improvements to address inefficiencies exposed by its overseas
expansion, it said on Tuesday as it posted first-half profit
growth of 7%.
    Shares in the group jumped more than 9% by 1020 GMT,
extending gains over the past year to 38% and valuing the
company at 492 million pounds ($638 million), after it also said
that trading this year has been in line with expectations.
    Hotel Chocolat had cautioned in January that it had incurred
higher costs in delivering second-quarter revenue growth of 11%,
citing challenges in its supply chain as it expanded in the
United States and Japan. 
    It pledged to address the issues in 2020, adapting its model
from one focused on the UK to one also supplying overseas
operations.
    "We are now making good progress with investments and
upgrades in our supply chain, which will fully address these
inefficiencies and increase our international and multi-channel
supply capability," the company said on Tuesday.
    The luxury chocolate maker, retailer and wholesaler made a
pretax profit of 14.9 million pounds in the 26 weeks to Dec. 29,
up from 13.8 million pounds a year earlier. Revenue was up 14%
at 91.7 million pounds.
    New store openings contributed three percentage points of
sales growth, with the balance coming from existing locations,
digital and wholesale channels.
    Co-founder and Chief Executive Angus Thirlwell, who owns 32%
of the shares, highlighted a 200% leap in sales of the company's
Velvetiser in-home hot chocolate system and a 120% jump in
active VIP members to 1.1 million.
    Official data published last week showed that British
shoppers started spending again at the start of the year after a
sluggish end to 2019, adding to signs that improved sentiment
since December's national election is translating into stronger
economic activity.  urn:newsml:reuters.com:*:nUKLKDEGBX
   Hotel Chocolat, which is outperforming the wider UK retail
market, ended the period with 125 British locations, four in the
United States and five in Japan. It maintained its interim
dividend at 0.6 pence.
($1 = 0.7714 pounds)

 (Reporting by James Davey
Editing by David Goodman)
 ((james.davey@thomsonreuters.com; +44 20 7542 7674))
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