Hotel Chocolat posts £9 million annual losses, yet targets festive and New Year growth
Bath, Somerset, UK, 22nd February 2019, Shop Sign for Hotel Chocolat
The Hotel Chocolat group has reported sales losses after tax, totalling £9 million incurred during a challenging period of trading, but expressed optimism for a late-season rally for the typically strong festive season, writes Neill Barston.
However, in the company’s latest annual statement, the business reported general revenues of £226 million for this year, up by a total of 37%, UK retail sales growth of 23% against pre-Covid-19 results, as well as encouraging online performance.
As the company noted, the easing of pandemic restrictions saw physical retail sales and profitability rebound, bolstered by new categories and an increase in the active customer database. This was supported by online and partnerships which continue to play a major role in delivering the brand to consumers
at their convenience. The breadth of activity and the pace of growth was the fastest in the group’s history.
Among the most significant developments for the year came in fully repositioning the company’s business interests in the US- removing its physical stores for a model based around online trading, which the firm said was down to conditions within the region. In its annual review, it asked customers to ‘have patience with them’ while it re-assesses the best way forward for that market.
As Angus Thirlwell Co-founder and Chief executive officer noted, 2022 has proved notably challenging with unpredictable markets and tests for the wider sector that have posed their respective obstacles and opportunities.
He said: “A rollercoaster year, with everything: exceptional growth; significant growing pains, and a determined new focus,” noting that despite wider issues within the sector impacting on sales of confectionery including the lingering impact of pandemic conditions earlier in the year had an impact on the business, but he believed it is heading firmly in the right direction.
“The performance of our UK channels, and of both our new and existing categories, indicates that the total addressable market for the Hotel Chocolat brand in the UK is greater than we had previously estimated. This is also supported by market research that shows significant potential to appeal to more UK households.
“We reported a statutory loss before tax for the period of (£8.7m), which is clearly disappointing. The loss is reflective of the significant impacts of discontinuing activities in the year that had lower prospects for future returns, relative to the ongoing, proven new successes. Whilst temporarily painful to make these
decisions, making choices like this has always been part of Hotel Chocolat’s entrepreneurial history.”
Clearly, he noted the company was experiencing what he termed to be growing pains’ as it made a transition from CAGR sales growth of around 12% before the covid pandemic, to its present position of delivering 29% annual sales growth in the past three years that has had a significant positive impact on its overall strategies for taking the business forward.