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Hotel Chocolat (HOTC) has announced a 12% sales boost and a big jump in profitability in its first annual results as a listed company.
The chocolatier and retailer reported that annual revenues grew by 12% from £81.1m to £91.1m during the year to 26 June 2016.
Top-line growth was boosted by the opening of seven new stores to take its estate to 83 stores and online growth of 20%-plus.
Gross profit margin improved from 66.6% to 66.8%, as a result of a focus on efficiency and better buying, partially offset by ongoing investment in product quality.
This efficiency focus, and the closing of three less profitable stores, helped pre-tax profit increase by 91% to £5.6m.
Pre-exceptional pre-tax profits were up 181% to £8.2m and pre-exceptional EBITDA was up 57% to £12.3m.
The group also completed £8.3m of capex projects during the year in support of its growth strategy, completing its investment in chocolate factory in Huntington to grow capacity by over 20%
Angus Thirlwell, Co-founder and CEO said: “I am very pleased with our performance since we were admitted to trading on AIM in May this year. Our results are strong, the Hotel Chocolat brand has continued to strengthen and we have made good progress with our three strategic priorities of investing further in our British chocolate manufacturing operations, growing our store estate and developing our digital offering.”
“Our plans for the peak winter season are well set and I am confident that our Christmas ranges will be our best ever, as customers continue to appreciate our “more cocoa, less sugar” approach throughout all our categories. I look forward to further progress in the year ahead.”
Hotel Chocolat shares were trading below their May float price of 190p in early July, but have since recovered to hit 250p by earlier this month.
Its shares jumped 4.6% to 238p this morning having slipped back in recent days.
Morning update
The other major earnings release this morning is a third quarter trading update from Reckitt Benckiser (RB).
Reckitt said it remains on course for a strong 2016 after recording 2% like for like growth in the third quarter and total growth of 17% as it benefits from the impact of the post-Brexit weakness of sterling.
The 2% like for like growth represents something of a slowdown from its 4% like for like growth in the first nine months of the year, but Reckitt remains targeting full year like for like growth of 4%.
In ENA (Europe, North America, ANZ) it reported “resilient performance” across its regions as like for like sales remained flat, despite materially lower sales of Scholl/Amopé, and weak consumer environment, particularly in Russia.
Developing markets continued to show strong like for like growth of 7%, particularly in India and China, though Korea held back growth and Brazil “remains a challenging market”.
On a category level growth was seen across consumer health except for weakness in Scholl/Amopé, while hygiene saw continued strength, particularly in Dettol, Harpic and Finish.
Rakesh Kapoor, CEO, commented: “In an environment where market growth rates have softened, we continue to make good strategic progress in all of our Powermarkets, particularly in India, and in China where we are driving strong development of our e-commerce channels.
“Our Q3 performance has been adversely impacted by the flagged issues in Korea, Russia and our Scholl innovation. These challenges will impact the near term. We are targeting full year LFL net revenue growth of +4%. We remain very confident that our medium and longer term strategic choices are right and will continue to drive shareholder returns.”
Reckitt’s shares have fallen 2.6% to 7,135p on the update this morning, but remain up 13.7% year-to-date.
Elsewhere on the markets, the FTSE 100 has eased back 0.1% to 6,989.9pts so far this morning.
Away from Hotel Chocolat, major risers include McColl’s Retail Group (MCLS), up 1.7% to 185p, FeverTree Drinks (FEVR), up 0.8% to 957.3p and AG Barr (BAG), up 0.8% to 494.2p.
Fallers include C&C Group (CCR), down 2.4% to €3.44, Ocado (OCDO), down 1.8% to 262.6p, and PZ Cussons (PZC), down 1.3% to 350p.
Yesterday in the City
The FTSE 100 edged back up 0.8% to exactly 7,000pts yesterday, with high street retailers and grocers driving a good proportion of that gain.
Marks & Spencer (MKS) was the FTSE 100’s top riser, climbing 4.3% to 333.7p while fellow clothing retailers Next and N Brown Group were also on the rise.
As were Tesco (TSCO) and Sainsbury’s (SBRY), rising 3.5% to 208.3p and 2.5% to 235p respectively after being named as the two best performers of the big four by Nielsen and Kantar Worldpanel. Morrisons (MRW) also rose a more modest 0.6% to 222.7p and Ocado leapt 5.2% to 267.5p on the falling food price deflation and sector-wide sales growth.
Other risers included B&M European Value Retail (BME), up 1.5% to 241p, SSP Group (SSPG) up 1.5% to 329p and Associated British Foods (ABF), up 1.5% to 329p.
Fallers included Reckitt Benckiser ahead of its trading update this morning, falling 0.4% to 7327p, British American Tobacco (BATS), down 0.4% to 4,798p and Greggs (GRG), down 0.4% to 977.5p.
Hotel Chocolat (HOTC) dropped 5.2% to 227.5p ahead of its annual results this morning.
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