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Hotel Chocolat Group (HOTC)

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Wednesday 21 February, 2018

Hotel Chocolat Group

Interim Results

RNS Number : 4485F
Hotel Chocolat Group PLC
21 February 2018
 

21 February 2018

 

Hotel Chocolat Group plc

("Hotel Chocolat", the "Company" or the "Group")

Interim Results

 

Hotel Chocolat Group plc, a premium British chocolatier and omni-channel retailer, today announces its interim results for the 26 weeks ended 31 December 2017.

 

Financial highlights:

 

·     

Revenue up 15% to £71.7m (H1 FY17: £62.5m)

·     

Underlying EBITDA up 15% to £15.8m (H1 FY17: £13.7m)1

·     

Underlying EBITDA margin of 22.0% (H1 FY17: 21.9%)1

·     

Profit before tax up 15% to £12.9m (H1 FY17: £11.2m)

·     

Profit after tax up 15% to £10.1m (H1 FY17: £8.8m)

·     

Strong balance sheet with net cash at period end of £18.3m (H1 FY17: £16.2m)

·     

Earnings per share up 15% to 9.0p (H1 FY17: 7.8p)

·     

Interim dividend of 0.6 pence

 

 

Operational highlights:

 

·     

Strong sales growth across retail, digital & corporate channels

·     

Successful Christmas ranges and availability delivered growth

·     

10 new stores opened, contributing 5% to Group sales growth

·     

New sites featured cafe drinks offer and comprised a wide diversity of locations including city centres, market towns, retail parks, designer outlets; first store opened in the Republic of Ireland

·     

Digital growth through own website and new 3rd party wholesale to digital retailers including Amazon and Ocado

·     

Factory capacity increase by 25%

·     

Underlying EBITDA margin improved +11 basis points, despite foreign exchange headwinds and costs of in-sourcing of distribution totalling -95 basis points

 

1 Underlying EBITDA in H1 FY18 excludes £0.4m of share-based charges (H1 FY17: £0.3m).

 

Angus Thirlwell, Co-founder and Chief Executive Officer of Hotel Chocolat, said:

 

"This has been another period of strong progress for Hotel Chocolat with growth in both sales and profits. The critical Christmas period was again successful, helped by further improvements in availability, our best ever seasonal range and the extension of our one-stop gift solutions range. We have exciting plans in place for the key spring seasons of Mother's Day and Easter, and have recently launched a new cacao beauty range and a weekly subscription called Mbox. We are confident of further progress during the year.

 

"I would like to thank everyone in the Hotel Chocolat team for their dedication in delivering another successful Christmas.

 

"Recent trading, including the Valentine's period is in line with the Board's expectations and we continue to make good progress against our three key strategic objectives of opening more stores, improving our digital capability and increasing our production capacity."

 

 



This announcement contains inside information for the purposes of the Market Abuse Regulation.

 

For further information:

 

Hotel Chocolat Group plc                                                  

c/o Citigate

                + 44 (0) 20 7638 9571

Angus Thirlwell, Co-founder and Chief Executive Officer



Peter Harris, Co-founder and Development Director



Matt Pritchard, Chief Financial Officer






Citigate Dewe Rogerson - Financial PR                          


+ 44 (0) 20 7638 9571

Simon Rigby                                                         



Angharad Couch



Ellen Wilton






Liberum Capital Limited - Nominated Advisor and Broker


+ 44 (0) 20 3100 2222

Clayton Bush



Lucy Sharma



Jill Li



 

 

Notes to Editors:

Hotel Chocolat is a premium British chocolatier with a strong and distinctive brand. The business was founded in 1993 by Angus Thirlwell and Peter Harris and has traded under the Hotel Chocolat brand since 2003. The Group sells its products online and through a network of stores in the UK and abroad. The Group has a cocoa plantation and eco-hotel in Saint Lucia, offering complete cocoa immersion thorough tree-to-bar experiences and wellness treatments. The Group also has a flagship restaurant and cocoa roastery in London's Borough Market: Rabot 1745. The Group was admitted to trading on AIM in 2016.  

 



Chief Executive's statement (inclusive of financial review)

 

RESULTS

 

 

 


Period ended

31 December 2017

£000


Period ended

25 December 2016

£000






Revenue


71,709


62,528

Gross profit


49,107


42,544

Operating expenses


(33,316)


(28,846)

Underlying EBITDA


15,791


13,698

Share-based payments


(367)


(277)

EBITDA


15,425


13,421

Depreciation & amortisation


(2,207)


(1,743)

Loss on disposal of property, plant & equipment


(9)


(16)

Operating profit


13,209


11,662

Finance income


16


3

Finance expense


(296)


(446)

Share of joint venture results


7


-

Profit before tax


12,936


11,219

Tax expense


(2,821)


(2,422)

Profit for the period


10,115


8,797

Earnings per share - Basic


9.0p


7.8p

Earnings per share - Diluted


8.9p


7.8p

Dividend per share


0.6p



 

CHIEF EXECUTIVE'S STATEMENT

I am pleased to report continued progress for the Hotel Chocolat brand during the 26 weeks to 31 December 2017. Both revenue and profit before tax for the period increased by 15%, with efficiencies offsetting known cost headwinds. Hotel Chocolat delivered growth across all its channels, benefitting from improved seasonal ranges and some encouraging early results for our new digital wholesale partners.  The business remains focused on the three key pillars of its growth strategy:

 

1) Open stores

We opened 10 new stores in the period and completed two relocations. Of particular note is the diversity of location types; we opened a new flagship store in Oxford Westgate and tested our first ever retail park location at Teesside. We also opened our second designer outlet at Clarks Village, and a number of smaller sites in market towns including Shrewsbury and Beverley. Our first store in the Republic of Ireland in Dundrum has also performed well. The initial results generated by these new sites give us confidence that the 'pipeline' of potential new sites is greater than previously expected.

 

2) Increase capacity and capture efficiencies from the vertically integrated supply chain

Underlying EBITDA margins increased by a net +10 basis points. This was achieved by improved efficiencies and the benefits of increasing scale, which were partly offset by two known headwinds impacting costs by 95 basis points:

 

I.

The business hedges its foreign exchange Euro purchases, therefore H1 FY18 was the first period affected by the decline of Sterling in 2016, and this created a -35 basis points cost headwind in the period.

II.

In 2016 we made the decision to bring subscription distribution in-house in order to make the service more responsive and to enable us to offer a wider range of subscription types. This change was effective at the start of H1 and negatively impacted EBITDA margin by -60 basis points.

 

For FY19 and beyond, these two impacts will form part of the 'base' operating model, meaning that any further efficiency gains and economies of scale will more readily convert to an EBITDA margin rate improvement than in FY18.

 

During the period factory capacity increased by 25% driven by improved asset utilisation and more efficient production scheduling. New capital projects commissioned in January 2018 have increased liquid chocolate capacity by 180%.

 

3) New digital proposition to grow customer base and improve gifting proposition 

Digital revenues, comprising website plus subscription club and new digital wholesale partners, grew 13% overall.

·     

The website delivered a 16% year-on-year growth driven by an increase in traffic, particularly on mobiles, a benefit of the new website that launched in January 2017. Mobiles and tablets now account for 62% of all web traffic, mobile conversion rose by 19% from 2.6% to 3.1%.

·     

New wholesale accounts with digital retailers including Amazon and Ocado contributed 6% to digital growth.

·     

Excluding the costs of in-sourcing distribution, subscription EBITDA increased year-on-year. New customer recruitment activities into the club were scaled back pending the launch of the new weekly Mbox subscription and as a result like-for-like sales volumes declined by 13%.

·     

Following successful trials in 2017, a new weekly subscription launched in February 2018. The new Mbox format offers a different proposition to the existing monthly Tasting Club, being the most convenient way to regularly receive a personal supply of Hotel Chocolat's most popular recipes each week in individually wrapped portions.

 

FINANCIAL REVIEW

Revenue

10 new stores opened during the period, contributing 5% to the Group's year-on-year growth in revenue. Retail, digital and corporate wholesale all delivered sales growth.

 

Gross margin, operating expense and underlying EBITDA

Gross margin increased 44 basis points to 68.48%, supported by the capital investment made in FY17.

 

Operating expenses as a per cent of sales increased by 33 basis points as a result of 60 basis points of additional costs relating to in-sourcing subscription distribution.

 

Underlying EBITDA margin increased by 11 basis points, delivering underlying EBITDA growth of 15% to £15.8m (H1 FY17: £13.7m).

 

Share based payments

Share-based payment expense of £0.4m (H1 FY17: £0.3m) related to the share-based Long-Term Incentive Plan and an all-employee Save As You Earn plan.

 

Foreign currency

The business manufactures the majority of its products in the UK, however it does purchase some premium ingredients in foreign currencies, predominantly Euros. The Group hedges its forecast Euro purchases up to 18 months ahead.  The decline in Sterling in 2016 meant that some purchases in H1 FY18 were at the new lower rate which adversely impacted gross margin and EBITDA by 35 basis points. This impact will continue to be felt in H2 FY18 and in FY19.

 

Finance income and expense

Finance income of £16k in H1 FY18 represents unrealised interest on foreign exchange. Finance expense of £0.3m reflects interest on chocolate bonds, a working capital overdraft and realised interest on foreign exchange hedges of £83k.   

 

Earnings per share

Earnings per share in the period were 9.0p a 15% increase on H1 FY17: 7.8p.

 

Dividend

At the time of the IPO the Directors stated an intention to implement a progressive dividend policy to reflect the expectation of future cash flow. The Board proposes an interim dividend of 0.6p which will be paid on 3rd April 2018 to shareholders on the register on 2nd March 2018

 

Cash flow and closing cash position

Net cash inflow from operating activities was £24.9m (H1 FY17: £22.1m).

 

Net cash (being cash minus borrowings) at the end of the period was £18.3m (H1 FY17: £16.2m). The Group has access to an overdraft facility with Lloyds Bank plc to fund seasonal working capital requirements.

 

Major capital projects in the period included 10 new shops, two store relocations and upgrades to the manufacturing facility in Huntingdon.

 

OUTLOOK

Since the end of the period, trading has continued to be in line with the Board's expectations. The trading performance of the new stores is encouraging and thus the pipeline of similar potential locations is increasing.

 

We are in the process of finalising our next set of capacity and capability investments for our production facility in order to ensure we can both meet our growth aspirations and improve efficiency in the years ahead.

 

The business has successfully mitigated the anticipated foreign exchange headwinds. Continued delivery against the 3-point strategy will deliver top-line growth and improving profitability. A strong differentiated brand which offers great products and customer service and that is priced as an affordable luxury, gives the Board confidence in the Group's continued progress.

 

Angus Thirlwell

Co-founder and Chief Executive Officer

CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME

For the period ended 31 December 2017

 


 

 

 

Notes

Unaudited

26 weeks ended

31 December 2017

£


Unaudited

26 weeks ended

25 December 2016

£






Revenue


71,708,557


62,527,738

Cost of sales


(22,601,129)


(19,983,960)



49,107,428


42,543,778






Administrative expenses


(35,898,903)


(30,881,742)


2

13,208,525


11,662,036

Finance income

3

15,919


3,068

Finance expenses

3

(296,028)


(445,871)

Share of joint venture results


7,332


-

Profit before tax


12,935,748


11,219,233






Tax expense


(2,820,791)


(2,421,861)

Profit for the period


10,114,957


8,797,372






Other comprehensive income:





Derivative financial instruments


(121,114)


(198,302)

Deferred tax charge on derivative financial instruments


11,505


113,975

Currency translation differences arising from consolidation


 

(361,829)


 

780,993

Total comprehensive income for the period


9,643,519


9,494,038






Earnings per share - Basic

4

9.0p


7.8p

Earnings per share - Diluted

4

8.9p


7.8p

 

 



CONSOLIDATED STATEMENT OF FINANCIAL POSITION

As at 31 December 2017

 


 

 

 

 

Notes

Unaudited

As at

31 December 2017

£


Unaudited

As at

25 December 2016

£


Audited

As at

2 July

2017

£

ASSETS







Non-current assets







Intangible assets


2,547,958


2,144,098


2,338,041

Property, plant and equipment

5

34,677,619


29,194,640


31,397,582

Investment in joint ventures


7,332


300


-

Derivative financial assets


8,564


9,346


-

Other receivables and prepayments


17,851


5,034


7,250

Deferred tax asset


381,825


-


213,819



37,641,149


31,353,418


33,956,692

Current assets







Derivative financial assets


73,724


523,385


306,526

Inventories


9,034,330


7,569,092


9,878,122

Trade and other receivables


6,494,705


6,194,439


6,020,954

Cash and cash equivalents


24,994,989


23,522,550


8,470,178



40,597,748


37,809,466


24,675,780

Total assets


78,238,897


69,162,884


58,632,472








LIABILITIES







Current liabilities







Trade and other payables

6

25,808,949


25,799,854


16,632,717

Corporation tax payable


2,818,241


2,396,211


1,104,746

Derivative financial liabilities


52,491


144,974


137,480

Borrowings

7

3,482,482


3,773,994


3,371,444



32,162,163


32,115,033


21,246,387

Non-current liabilities







Other payables and accruals

6

2,546,523


1,850,884


1,934,057

Derivative financial liabilities


-


102,824


33,970

Deferred tax liabilities


-


10,729


-

Borrowings

7

3,191,677


3,542,131


3,504,544

Provisions


825,852


705,513


750,629



6,564,052


6,212,081


6,223,200

Total liabilities


38,726,215


38,327,114


27,469,587








NET ASSETS


39,512,682


30,835,770


31,162,885








EQUITY







Share capital


112,838


112,838


112,838

Share premium


11,749,487


11,749,487


11,749,487

Retained earnings


25,160,751


16,884,722


16,851,199

Translation reserve


687,392


1,134,119


1,049,221

Merger reserve


223,251


223,251


223,251

Capital redemption reserve


6,301


6,301


6,301

Other reserves


1,572,662


725,052


1,170,588

Total equity attributable to shareholders


 

39,512,682


 

30,835,770


 

31,162,885

 



CONSOLIDATED STATEMENT OF CASH FLOW 

For the period ended 31 December 2017

 


 

 

 

Notes

Unaudited

26 weeks ended

31 December 2017

£


Unaudited

26 weeks ended

25 December 2016

£






Profit before tax for the period


12,935,748


11,219,233

Adjusted by:





Depreciation of property, plant and equipment

5

1,952,705


1,605,009

Amortisation of intangible assets


253,983


137,983

Net interest expense


280,109


442,803

Share-based payments


366,538


277,224

Loss on disposal of property, plant and equipment and intangible assets


 

9,417


 

15,852

Operating cash flows before movements in working capital


 

15,798,500


 

13,698,104

Decrease/(increase) in inventories


755,985


(657,176)

Increase in trade and other receivables


(484,352)


(1,036,358)

Increase in trade and other payables and provisions


10,064,095


10,908,324

Cash inflow generated from operations


26,134,228


22,912,894

Interest received


84


3,068

Income tax paid


(1,116,051)


(590,985)

Interest paid on:





-       finance leases and hire purchase loans


(1,192)


(7,153)

-       derivative financial instruments


(82,542)


(65,722)

-       bank loans and overdraft


(777)


(113,417)

Cash flows from operating activities


24,933,750


22,138,685






Purchase of property, plant and equipment


(6,136,967)


(4,435,006)

Proceeds from disposal of property, plant and equipment


 

-


 

12,000

Purchase of intangible assets


(257,524)


(414,299)

Cash flows used in investing activities


(6,394,491)


(4,837,305)






Buy back of Chocolate bonds


(110,500)


(118,000)

Capital element of hire purchase and finance leases repaid


 

(136,328)


 

(296,827)

Dividends paid


(1,805,405)


-

Cash flows used in financing activities


(2,052,233)


(414,827)






Net change in cash and cash equivalents


16,487,026


16,886,553

Cash and cash equivalents at beginning of period


8,470,178


6,475,446

Foreign currency movements


37,785


160,551

Cash and cash equivalents at end of period


24,994,989


23,522,550


CONSOLIDATED STATEMENT OF CHANGES IN EQUITY 

For the period ended 31 December 2017


Share capital

£

 

Share Premium

£

 

Retained earnings

£

 

Translation reserve

£

 

Merger reserve

£

Capital redemption reserve

£

 

Other reserves

£

 

 

Total

£










As at 26 June 2016

112,838

11,749,487

8,087,350

353,126

223,251

6,301

532,155

21,064,508

Share-based payments

-

-

-

-

-

-

277,224

277,224

Profit for the period

-

-

8,797,372

-

-

-

-

8,797,372

Other comprehensive income:









Derivative financial instruments

-

-

-

-

-

-

(198,302)

(198,302)

Deferred tax charge on derivative financial instruments

-

-

-

-

-

-

113,975

113,975

Currency translation differences arising from consolidation

-

-

-

780,993

-

-

-

780,993

Equity as at 25 December 2016

112,838

11,749,487

16,884,722

1,134,119

223,251

6,301

725,052

30,835,770










Share-based payments

-

-

-

-

-

-

285,032

285,032

Deferred tax charge on share-based payments

-

-

-

-

-

-

328,796

328,796

Loss for the period

-

-

(33,523)

-

-

-

-

(33,523)

Other comprehensive income:









Derivative financial instruments

-

-

-

-

-

-

(118,356)

(118,356)

Deferred tax credit on derivative financial instruments

-

-

-

-

-

-

(49,936)

(49,936)

Currency translation differences arising from consolidation

-

-

-

(84,898)

-

-

-

(84,898)

Equity as at 2 July 2017

112,838

11,749,487

16,851,199

1,049,221

223,251

6,301

1,170,588

31,162,885










Share-based payments

-

-

-

-

-

-

366,538

366,538

Deferred tax charge on share-based payments

-

-

-

-

-

-

145,145

145,145

Profit for the period

-

-

10,114,957

-

-

-

-

10,114,957

Dividends paid



(1,805,405)





(1,805,405)

Other comprehensive income:









Derivative financial instruments

-

-

-

-

-

-

(121,114)

(121,114)

Deferred tax charge on derivative financial instruments

-

-

-

-

-

-

11,505

11,505

Currency translation differences arising from consolidation

-

-

-

(361,829)

-

-

-

(361,829)

Equity as at 31 December 2017

112,838

11,749,487

25,160,751

687,392

223,251

6,301

1,572,662

39,512,682


NOTES TO THE INTERIM FINANCIAL INFORMATION

 

1.             Basis of preparation

The consolidated interim financial information has been prepared in accordance with International Financial Reporting Standards, International Accounting Standards and Interpretations (collectively IFRSs), as adopted by the European Union.

 

The accounts have been prepared in accordance with accounting policies that are consistent with the Group's Annual Report and Accounts for the period ended 2 July 2017 and that are expected to be applied in the Group's Annual Report and Accounts for the period ended 1 July 2018. There are new or revised standards that apply to the period beginning 3 July 2017 but they do not have a material effect on the financial statements for the period ended 31 December 2017.

 

The comparative financial information for the period ended 2 July 2017 in this interim report does not constitute statutory accounts for that period under 435 of the Companies Act 2006.


Statutory accounts for the period ended 2 July 2017 have been delivered to the Registrar of Companies.


The auditors' report on the accounts for 2 July 2017 was unqualified, did not draw attention to any matters by way of emphasis, and did not contain a statement under 498(2) or 498(3) of the Companies Act 2006.

 

 

2.             Profit from operations

Profit from operations is arrived at after charging:


 

 

Unaudited

26 weeks ended

31 December 2017

£


Unaudited

26 weeks ended

25 December 2016

£






Staff cost


15,957,108


14,477,191

Depreciation of property, plant and equipment


1,952,705


1,605,009

Amortisation of intangible assets


253,983


137,983

Loss on disposal of property, plant and equipment and intangible assets


 

9,417


 

15,852

Operating leases:





-       Property


5,435,700


4,530,686

-       Plant and equipment


94,391


94,548

Exchange differences


85,702


149,253

Bad debt expense


20,037


23,228

 

 



 

3.             Finance income and expenses


 

 

Unaudited

26 weeks ended

31 December 2017

£


Unaudited

26 weeks ended

25 December 2016

£






Interest on bank deposits


84


3,068

Unrealised interest on derivative financial instruments


 

15,835


 

-

Finance income


15,919


3,068






Interest on bank borrowings


57,410


157,795

Realised interest on derivative financial liabilities


82,542


65,722

Unrealised interest on derivative financial instruments


 

-


 

41,080

Finance leases and hire purchase contracts


1,192


7,153

Finance charges on Chocolate bonds


154,884


174,121

Finance expenses


296,028


445,871






 

 

4.             Earnings per share

Profit for the period used in the calculation of the basic and diluted earnings per share:


 

 

Unaudited

26 weeks ended

31 December 2017

£


Unaudited

26 weeks ended

25 December 2016

£






Profit after tax for the period


10,114,957


8,797,372






 

The weighted average number of shares for the purposes of diluted earnings per share reconciles to the weighted average number of shares used in the calculation of basic earnings per share as follows:


 

 

Unaudited

26 weeks ended

31 December 2017

£


Unaudited

26 weeks ended

25 December 2016

£






Weighted average number of shares in issue used in the calculation of earnings per share (number) - Basic


112,837,828


112,837,828

Share-based payments - Hotel Chocolat Group plc Save As You Earn Plan


214,728


-

Weighted average number of shares in issue used in the calculation of earnings per share (number) - Diluted


113,052,556


112,837,828






Earnings per share (pence) - Basic


9.0


7.8

Earnings per share (pence) - Diluted


8.9


7.8

 

As at 31 December 2017, the total number of potentially dilutive shares issued under the Hotel Chocolat Group plc Long-Term Incentive Plan was 3,667,000 (25 December 2016: 3,692,000). Due to the nature of the options granted under this scheme, they are considered contingently issuable shares and therefore have no dilutive effect.  



 

5.             Property, plant and equipment


 

 

 

 

Freehold property

£

 

 

 

 

Leasehold property

£

Furniture & fittings, Equipment, Computer software & hardware

£

 

 

 

 

Plant & machinery

£

 

 

 

 

 

Total

£







26 weeks ended 25 December 2016






Cost:






As at 26 June 2016

11,469,455

734,999

22,899,192

14,662,588

49,766,234

Additions

132,410

-

3,201,724

639,882

3,974,016

Disposals

-

-

-

(49,900)

(49,900)

Translation differences

675,049

-

113,095

-

788,144

As at 25 December 2016

12,276,914

734,999

26,214,011

15,252,570

54,478,494







Accumulated depreciation:






As at 26 June 2016

408,612

732,306

14,013,001

8,501,204

23,655,123

Depreciation charge

79,564

475

1,035,145

489,825

1,605,009

Disposal

-

-

-

(22,048)

(22,048)

Translation differences

7,168

-

38,602

-

45,770

As at 25 December 2016

495,344

732,781

15,086,748

8,968,981

25,283,854







Net book value






As at 25 December 2016

11,781,570

2,218

11,127,263

6,283,589

29,194,640







26 weeks ended 31 December 2017






Cost:






As at 2 July 2017

12,588,855

734,999

28,418,804

16,319,351

58,062,009

Additions

321,661

-

3,999,331

1,271,020

5,592,012

Disposals

-

-

(9,417)

-

(9,417)

Translation differences

(345,612)

-

(6,002)

-

(351,614)

As at 31 December 2017

12,564,904

734,999

32,402,716

17,590,371

63,292,990







Accumulated depreciation:






As at 2 July 2017

567,231

733,256

15,796,562

9,567,378

26,664,427

Depreciation charge

79,898

475

1,312,304

560,028

1,952,705

Disposal

-

-

-

-

-

Translation differences

(6,710)

-

4,949

-

(1,761)

As at 31 December 2017

640,419

733,731

17,113,815

10,127,406

28,615,371







Net book value






As at 31 December 2017

11,924,485

1,268

15,288,901

7,462,965

34,677,619







 

As at 31 December 2017, the net book value of freehold property includes land of £2,767,923 (25 December 2016: £3,039,349), which is not depreciated.

 

Included above are assets held under finance leases and hire purchase agreements. As at 31 December 2017, the net book value of such assets within plant & machinery is £269,690 (25 December 2016: £456,351) and within computer software & hardware is £456,106 (25 December 2016: £577,145).

 



 

6.             Trade and other payables


 

 

Unaudited

26 weeks ended

31 December 2017

£


Unaudited

26 weeks ended

25 December 2016

£

Current





Trade payables


4,554,352


5,351,132

Other payables


2,855,517


4,140,000

Other taxes payable


7,625,446


5,985,535

Accruals


10,773,634


10,323,187



25,808,949


25,799,854

Non-current





Other payables


2,546,523


1,850,884



2,546,523


1,850,884






 

7.             Borrowings


 

 

Unaudited

26 weeks ended

31 December 2017

£


Unaudited

26 weeks ended

25 December 2016

£






Current





Finance and lease hire purchase liabilities


201,732


433,244

Chocolate bonds


3,310,000


3,388,000



3,511,732


3,821,244

Unamortised costs of issue


(29,250)


(47,250)

Total current borrowings


3,482,482


3,773,994






Non-current





Finance and lease hire purchase liabilities


117,677


336,131

Chocolate bonds


3,074,000


3,206,000

Total non-current borrowings


3,191,677


3,542,131






Total borrowings


6,674,159


7,316,125






Chocolate bonds pay a return either in boxes of luxury chocolates or by way of a Hotel Chocolat gift card. For those bonds with a return in the form of chocolate, the coupon is fixed by number of boxes. For bonds where there is a return paid by way of a Hotel Chocolat gift card, there is a fixed rate of interest.

 

Chocolate bonds issued in 2010 are repayable in July 2018 if notice is given by the end of January 2018 and consequently, the full balance has been shown as a current liability. The total value of redemption notices received for this bond is £26,000 (2017: £6,000) which will be paid in July and no other amounts are contractually due before July 2019. The bonds can be repaid at any time by the Group.

 

In May 2017 the Group converted its bilateral revolving credit facility (RCF) into an overdraft facility. The bank overdraft is secured by a charge over the Groups assets and cross guarantees. The interest rate is charged at 1.25% over base rate.

 

The existing hire purchase and finance leases are secured by a charge over the related fixed assets and have incurred interest at an effective annual rate of 2.0%.


This information is provided by RNS
The company news service from the London Stock Exchange
 
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