Hotel Chocolat Group PLC Trading Update (9933E)
July 13 2021 - 1:00AM
UK Regulatory
TIDMHOTC
RNS Number : 9933E
Hotel Chocolat Group PLC
13 July 2021
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 GBP165 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 GBP22million 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 (GBP3.1m).
FINANCIAL POSITION
-- The Group remains well capitalised with cash on hand and access to
a GBP25m '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 Tel: +44 (0) 20 3100 2000
Sole Broker)
Clayton Bush
James Greenwood
Citigate Dewe Rogerson Tel: + 44 (0) 20 7638 9571
Angharad Couch
Ellen Wilton
Alex Winch
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.
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