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Aim 100: 50 to 41

Aim 100: 50 to 41

50. Hotel Chocolat Group

Along with Joules (JOUL), from last week’s countdown, Hotel Chocolat (HTOC) was the other notable retail listing on the Alternative Investment Market last year. The premium chocolatier now trades at more than double its 148p IPO price, and we think the appreciation in the share price won’t stop there.

The group is entirely vertically integrated – from making chocolate to retail and delivery – which means capital investments are to be expected, but these should help secure growth in the long term. Significant investments made to the group’s factory last year increased manufacturing capacity by around a fifth. As a result, the group was able to fulfil high demand from customers over Christmas – one of its key trading periods.

Like most retailers, Hotel Chocolat faces headwinds from fluctuations in raw material prices and foreign exchange rates, although the group mitigates the effect of both through hedging policies and ongoing supplier negotiations. Although the shares are expensive at more than 40 times forward earnings, they are in an earnings upgrade cycle. We remain fans of one of the best-performing market newcomers in some time. Buy. HR

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