Hotel Chocolat profits double but warn of challenges ahead

Hotel Chocolat

Hotel Chocolat (LON:HOTC) reported a double in profits for the year on Wednesday, but the company also warned of future challenges ahead.

Hotel Chocolat posted profits of £11.2 million in the year to 2 July 2017, compared to £5.6 million for 2016, which was in part attributed to the opening of 12 new stores across the period.

Revenues stood at £105.2 million, marking a 12 percent year-on-year increase from £91.1 million in 2016.

In addition, underlying earnings were up by a third to £16.3 million, boosting earnings per share to 7.8p.

In light of the lucrative year, Hotel Chocolat also announced a maiden dividend of 1.6p per share.

Chief Executive Angus Thirwell commented on the results:

“The Hotel Chocolat brand has continued to strengthen and we have made excellent progress with our three strategic priorities of investing further in our British chocolate manufacturing operations, growing our store estate and developing our digital offering,”

In particular, the successful year was attributed to the popularity of its Shop and Cafe Locations, as well as developments in its online platforms.

“All our channels are growing. In retail, the new Shop+cafe format is proving popular, our new website has improved conversion on mobile devices and since the year-end, we have signed six new wholesale accounts that will make it easier for consumers to buy Hotel Chocolat products.” He said.

He added: “Given the encouraging performance of our retail and internet channels, along with the pipeline of opportunities ahead of us, we are confident of further growth. This of course depends on the availability of suitable sites.”

The company did however warn of potential challenges for the business, as a result of the “challenges and uncertainties of the wider economy”, with persistent pressures on consumer spending proving a significant concern.

Back in May of this year, a public floatation of the chocolatier was announced, valuing the company at £167 million, ultimately beating analysts expectations.

Co-owners, Angus Thirwell and Peter Harris agreed to maintain 66.6 percent of Hotel Chocolat the brand after the floatation, after turning down approaches from various private equity firms.

Shares in the company are currently up 4.26 percent as of 13.36PM (GMT).