Hotel Chocolat predicts full year statutory loss
Hotel Chocolat has warned that it will post a statutory loss for its 2022 financial year despite revenue exceeding expectations with an uplift of 37% to £226 million.
In the year to 26 June, revenue was also up 71% on three years ago prior to the pandemic.
Meanwhile sales in the UK rose by 35% year-on-year in the period.
Hotel Chocolat said second half revenue was particularly strong with growth of 32%. It also revealed that it has a significantly larger addressable UK market size than previously estimated as it benefits from the popularity of new categories of in-home Velvetiser drinks.
While the company is anticipating underlying pre-tax profit for the year to be in line with market consensus, statutory pre-tax profit is expected to be a loss after the retailer incurred costs relating to discontinued operations and the closure of retail stores in the US.
Angus Thirlwell, co-founder and chief executive of Hotel Chocolat, said: “The Hotel Chocolat brand is achieving very strong growth in the UK, and we are pleased to have beaten sales expectations and expect to meet underlying profit expectations for FY22.
“The way the market has rapidly changed for all businesses in the second half certainly emphasises the resilience value of investments that we have made over the last 20 years: in building a differentiated brand with strong customer loyalty, a unique and desirable product range, and our own, dependable UK chocolate factory.”
Given the current global macro-economic climate, Hotel Chocolat said it will now focus efforts over the next three years on its proven and lowest-risk strategies that have the greatest potential for increased profitability. The company said this will lead to lower sales growth in the short term, and some transitional costs leading to lower profits in FY23, as it looks ahead to higher profits thereafter.
Thirlwall added: “While we expect a temporary lower sales growth rate and profit margin for FY23 as we carry through our adjustments, the result will be a business delivering greater results, with less risk and an even stronger balance sheet with a higher profit percentage growth in FY24 and FY25.
“We have discovered that our UK market can be a lot bigger for us than we thought a year ago, thanks to the new drinkable chocolate products (Velvetiser & Velvetised Cream alcohol) and the way our digital and stores businesses are performing.”
