Trading Statement
27/04/2023 07:00
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RNS Number : 6200X Hotel Chocolat Group PLC 27 April 2023
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.
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