It’s rare to read a set of retail results lately where sales, margins and profits are all on the rise. But that’s exactly what confectioner Hotel Chocolat (HOTC) has managed to achieve. Half-year revenue rose by a respectable 15 per cent to £71.7m which, thanks to an expansion in margins, translated into a similar growth rate at the bottom line. The group also finished the period in a net cash position, supported in part by strong cash generation, and announced a maiden half-year dividend worth 0.6p a share.
Christmas was a clear success for the group, with sales up 15 per cent over the 13 weeks ended 31 December 2017. Over the first six months the group opened 10 stores, taking its total to 100, and an encouraging initial performance has prompted bosses to accelerate plans for new openings this year. This sits alongside a thriving digital sales channel, which includes Hotel Chocolat’s own website and third-party wholesale agreements with Amazon (US:AMZ) and Ocado (OCDO). These partnerships accounted for roughly half of the 13 per cent acceleration in digital revenues.
Analysts at Liberum expect pre-tax profit of £12.4m for the year ending July 2018, giving EPS of 8.7p, compared with £11.2m and 7.8p in FY2017.
| HOTEL CHOCOLAT (HOTC) | ||||
| ORD PRICE: | 320p | MARKET VALUE: | £361m | |
| TOUCH: | 310-330p | 12-MONTH HIGH: | 405p | LOW: 238p |
| DIVIDEND YIELD: | 0.7% | PE RATIO: | 36 | |
| NET ASSET VALUE: | 35p | NET CASH: | £18.3m | |
| Half-year to 31 Dec | Turnover (£m) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
| 2016 | 62.5 | 11.2 | 7.8 | 0.00 |
| 2017 | 71.7 | 12.9 | 9.0 | 0.60 |
| % change | +15 | +15 | +15 | - |
| Ex-div: | 1 Mar | |||
| Payment: | 3 Apr | |||
