Hotel Chocolat update satisfies investors

AIM-listed specialist retailer Hotel Chocolat (LON:HOTC) saw its share price rise by 8.54% to 303.90p (as of 15:10 BST) after group sales rose by 3% over the year ended 28th June despite major deceleration in the second half due to lockdown. The closure of all UK stores for 12 weeks coincided with Easter and Mothers’ Day, two of the most important annual trading periods, and online logistics struggled to fully satisfy demand. Management anticipate that pre-tax profits will be inline with expectations, but the carried values of fixed assets are under review due to changes in the trading environment.

CEO Angus Thirlwell commented: “I’ve been hugely impressed by how our team have responded, culturally, professionally and ethically during the pandemic. The acceleration of change in the retail landscape has galvanised us to speed up our plans and investments in the opportunities we were already pursuing.

“Our physical retail usually accounts for over 70% of sales in the second half, but all locations were closed for the entire Easter period this year and beyond. It is a testament to our lovely customers’ loyalty that they switched in droves to online and we contained the Group impact to only -14 % in the half.

“Online, our brand is now set to a significantly faster growth trajectory, delivering gifts, subscriptions and household indulgence. Some of this is attributable to Covid-accelerated change , but new concept launches, and digital enhancements have also supported growth . The Velvetiser in-home drinks system, the VIP loyalty programme, and new subscriptions capability will continue to generate growth in the years ahead.

“We remain positive about the unparalleled leisure experience a physical Hotel Chocolat can deliver within our multi-channel direct – to – consumer model. All we need is footfall, and so far we are seeing that return at different rates. Residential areas are stronger, with city centres more subdued without as many commuters and tourists“.