Hotel Chocolat Group PLC Trading Statement (6200X)
April 27 2023 - 2:00AM
UK Regulatory
TIDMHOTC
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 GBP23m 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 GBP5m 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
GBP200m 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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END
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