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Hotel Chocolat Group (HOTC)

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Tuesday 26 February, 2019

Hotel Chocolat Group

Interim Results

RNS Number : 0652R
Hotel Chocolat Group PLC
26 February 2019
 

26 February 2019

 

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 30 December 2018.

 

Financial highlights:

·

Revenue up 13% to £80.7m (H1 FY18: £71.7m)

·

Underlying EBITDA up 10% to £17.3m (H1 FY18: £15.8m)1

·

Excluding new US & Japan start-ups, profit before tax up 11% to £14.4m (H1 FY18: £12.9m)

·

Reported profit before tax up 7% to £13.8m (H1 FY18: £12.9m)

·

Profit after tax up 7% to £10.8m (H1 FY18: £10.1m)

·

Cash flows from operating activities up 18% to £29.5m (H1 FY18: £24.9m)

·

Strong balance sheet with net cash at period end of £21.8m (H1 FY18: £18.3m)

·

Earnings per share up 7% to 9.6p (H1 FY18: 9.0p)

·

Interim dividend of 0.6p per share (H1 FY18: 0.6p)

 

 

Operational highlights:

·

Strong sales growth across retail, digital & wholesale channels

·

Successful Christmas ranges delivered growth

·

14 new stores opened in UK & Eire, contributing 4% to Group sales growth

·

New VIP Me loyalty card attracted 0.5m active customers

·

Velvetiser in-home Hot Chocolat maker launched and exceeded initial expectations six-fold

·

Digital growth through own website and new third-party wholesale to digital retailers

·

Encouraging launches of first stores in New York, and in Tokyo (with Joint Venture partner)

 

1 Underlying EBITDA in H1 FY19 excludes £0.4m of share-based charges (H1 FY18: £0.4m).

 

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

 

"This has been another period of progress for Hotel Chocolat with strong growth in sales, profits and cash generation. The critical Christmas period was again successful, supported by the launch of our new and innovative Velvetiser Hot Chocolate maker and by a deepening relationship with our customers via the new VIP Me scheme. Both developments will also support our plans for the key spring seasons of Mother's Day and Easter.

 

"Growth in the UK continued to deliver improvements in profitability which have enabled us to invest in the launch of two new start-ups in New York and Tokyo, both of which are showing encouraging early signs, in terms of customer response and the initial store sales performance.

 

"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 key strategic objectives of opening more stores, improving our digital capability and increasing our production capacity whilst testing and learning in two large new territories."

 

 

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

 

 

 

Angharad Couch

 

 

Ellen Wilton

 

 

Elizabeth Kittle

 

 

 

 

 

Liberum Capital Limited - Nominated Advisor and Broker

 

+ 44 (0) 20 3100 2222

Clayton Bush

 

 

James Greenwood

 

 

Trystan Cullen

 

 

 

 

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

30 December 2018

£000

 

Period ended

31 December 2017

£000

 

 

 

 

 

Revenue

 

80,719

 

71,709

Gross profit

 

53,097

 

49,107

Operating expenses

 

(35,767)

 

(33,316)

Underlying EBITDA

 

17,330

 

15,791

Share-based payments

 

(408)

 

(367)

EBITDA

 

16,922

 

15,425

Depreciation & amortisation

 

(2,793)

 

(2,207)

Loss on disposal of property, plant & equipment

 

(24)

 

(9)

Operating profit

 

14,104

 

13,209

Finance income

 

5

 

16

Finance expense

 

(179)

 

(296)

Share of joint venture results

 

(84)

 

7

Profit before tax

 

13,847

 

12,936

Tax expense

 

(3,045)

 

(2,821)

Profit for the period

 

10,802

 

10,115

Earnings per share - Basic

 

9.6p

 

9.0p

Earnings per share - Diluted

 

9.5p

 

8.9p

Dividend per share

 

0.6p

 

0.6p

 

CHIEF EXECUTIVE'S STATEMENT

 

I am pleased to report continued progress for the Hotel Chocolat brand during the 26 weeks to 30 December 2018. Revenue for the period increased by 13% and underlying EBITDA increased by 10%. Hotel Chocolat delivered growth across all its channels, benefitting from strong new products, successful marketing and loyalty campaigns, and the continued growth of digital wholesale partners.  The business remains focused on four key pillars of its growth strategy:

 

 

1) Open stores

We opened 14 new stores in the UK and Eire during the period. Our established stores continue to generate attractive returns, and the new stores opened over the last 3 years are achieving their payback targets suggesting that further attractive opportunities remain, which we will continue to evaluate on a site-by-site basis.

 

There has been much media attention regarding the future of physical retail. Whilst macro-economic trends have undoubtedly created headwinds, we obviously continually evaluate the performance of our stores. We remain confident that further new openings can deliver attractive financial returns and improve customers' ease of access to our brand. All of our stores trading for longer than 12 months are profitable, and the latest vintage of openings are delivering comparable EBITDA per site to that of the earliest stores.

 

The Board have modelled 3 scenarios, based on various growth rates and cost inflation for our physical estate:

1) A continuation of the FY18 growth rates for sales and for overhead costs would mean that store estate profitability would rise in future years.

2) A more pessimistic scenario, reflecting a drop to negative sales growth, and with externally driven cost inflation at rates in excess of FY18, would still mean that the retail estate would continue to generate significant EBITDA profit in 5 years' time. (Our average lease length is 5 years).

3) As a Board we are focusing all of our energies on delivering a third, and better, scenario which has the scope to generate a material increase in EBITDA, by:

·

Increasing the rate of sales growth, driven by product innovation, gaining a deeper relationship with our customers via the recently launched VIP ME rewards card, and empowering our store teams to deliver an even better experience for our guests.

·

Mitigating cost pressures using a combination of better buying, further innovation in our processes, and perpetual focus on working smarter whilst never compromising on product quality or service experience.

 

 

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

Our manufacturing operations again delivered improved efficiency and benefitted gross margin rate. However, these gains were offset by our sales growth being partly driven by lower margin but less capital-intensive wholesale accounts and from the new Velvetiser Hot Chocolat maker which is manufactured by a third party at a dilutive margin rate. A full explanation of margin rate is included in the financial review below. The lower margins on the new sales channels are mitigated by lower overheads attaching to these sales.

 

 

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

Digital revenues, comprising website, subscriptions and digital wholesale partners grew by 22%, or by 29% if expressed at retail prices.

·

The website delivered a 25% year-on-year growth driven by an increase in traffic and from sales of the Velvetiser.

·

Subscription sales declined by 25% due to the pause of new customer acquisition pending development of new subscription models for hot chocolat consumables.

 

 

4) Cautious 'test, learn, grow' approach to new international markets

In late November the Group opened its first joint venture store in Tokyo, shortly followed by its first pilot store in New York, and; the Board believes that both markets offer significant potential for future growth. A modest number of store openings in each market will be used to test the consumer response, the supply chain economics, and to build a business case for potential roll-out. Initial consumer response in both markets has been encouraging; the brand appears to resonate with consumers, the breadth of range is proving popular with local tastes, and pricing has been received as fair and reasonable. Whilst it is too soon to meaningfully conclude on the store economics, the new sites are performing in line with expectations and based on the first 10 weeks of trading both stores would rank as top quartile within the UK estate.

 

In July 2018 the Group transferred its two Danish stores to a local partner under a franchise development agreement covering the Nordic Region. The partner has opened two further stores in the period.

 

FINANCIAL REVIEW

Revenue

Group revenue increased by 13% to £80.7m. 14 new stores were opened in the UK & Eire during the period contributing 4% to the Group's year-on-year growth. Retail, digital and wholesale all delivered sales growth.

 

Profit Before Tax

Reported Profit before Tax increased by 7% to £13.8m. This profit includes losses of £0.5m relating to the launch in the USA and £0.1m relating to the Group's 20% interest in the new Japanese joint venture. Excluding the impact of the two international start-ups, Group profit before tax increased by 11% to £14.4m.

 

Gross margin

Gross margin declined by 270 basis points from 68.5% to 65.8%, primarily due to the following four impacts:

·

The Velvetiser is manufactured by a third party resulting in a lower gross margin, but also lower incremental overhead. The mix impact of Velvetiser sales reduced group margin by 100 basis points.

·

The New VIP Me loyalty scheme offers customer benefits including some additional discounts, the impact of signup incentive rewards reduced gross margin by 100 basis points.

·

Growth of sales from lower margin wholesale accounts reduced gross margin by 30 basis points. These accounts attract minimal incremental overhead.

·

Further factory efficiencies improved gross margin by 50 basis points, which mitigated 40 basis points of adverse impact from Foreign Exchange due to the decline of sterling in 2016 (foreign exchange purchases are hedged up to 18 months in advance). The adverse exchange impact will not continue in H2 and we continue to see opportunities to further improve factory efficiency.

 

 

 

Operating expense

Operating expenses grew by 7%, which was significantly slower than the rate of sales growth, as a result operating expenses as a percent of sales reduced from 46.5% to 44.3%. Inflationary cost increases were partly mitigated by the impact of growing sales from wholesale and the Velvetiser, each of which generate lower incremental overheads than other sales.

 

Underlying EBITDA

Underlying EBITDA increased 10% to £17.3m. Excluding the impact of the launches in the USA and Japan, underlying EBITDA increased 13% to £17.8m.

 

Share based payments

Share-based payment expense of £0.4m (H1 FY18: £0.4m) 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 FY19 were at lower rates which adversely impacted gross margin and EBITDA by 40 basis points. This adverse impact will reduce in H2.

 

Finance income and expense

Finance expense of £0.2m reflects £0.1m of interest on a working capital overdraft, and £0.1m of realised interest on foreign exchange hedges.

 

Earnings per share

Earnings per share in the period were 9.6p, a 7% increase on H1 FY18: 9.0p.

 

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 per share which will be paid on 17th April 2019 to shareholders on the register on 8th March 2019. Mindful of the potential growth opportunities in the USA and Japan, the Board will continue to review the rate of growth in any dividend relative to the potential opportunities for re-investment in service of profitability and growth.

 

Cash flow and closing cash position

Net cash inflow from operating activities was £29.5m (H1 FY18: £24.9m) an increase of 18 percent.

 

Net cash (being cash minus borrowings) at the end of the period was £21.8m (H1 FY18: £18.3m). The Group has access to an overdraft facility with Lloyds Bank plc to fund seasonal working capital requirements if required.

 

Major capital projects in the period included new shops, upgrades to the manufacturing facility in Huntingdon, and the development of a new visitor attraction in Saint Lucia.

 

OUTLOOK

Since the end of the period, trading has continued to be in line with the Board's expectations. The performance of the new stores is encouraging and there is a pipeline of similar potential locations. The Velvetiser and the VIP ME loyalty card scheme both performed well during their initial launch period and will offer significant potential for the future.

 

In delivering these results in a context of macro-economic uncertainty, the business has demonstrated creativity, resilience and adaptability. Continued delivery against the 4-point strategy will deliver top-line growth and improve profitability in the UK, enabling the Group to invest cautiously in tests in the USA and Japan. 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 30 December 2018

 

 

 

 

 

Notes

Unaudited

26 weeks ended

30 December 2018

£

 

Unaudited

26 weeks ended

31 December 2017

£

 

 

 

 

 

Revenue

 

80,719,280

 

71,708,557

Cost of sales

 

(27,622,221)

 

(22,601,129)

 

 

53,097,059

 

49,107,428

 

 

 

 

 

Administrative expenses

 

(38,993,208)

 

(35,898,903)

 

2

14,103,851

 

13,208,525

Finance income

3

5,332

 

15,919

Finance expenses

3

(178,901)

 

(296,028)

Share of joint venture results

 

(83,617)

 

7,332

Profit before tax

 

13,846,665

 

12,935,748

 

 

 

 

 

Tax expense

 

(3,044,820)

 

(2,820,791)

Profit for the period

 

10,801,845

 

10,114,957

 

 

 

 

 

Other comprehensive income:

 

 

 

 

Derivative financial instruments

 

281,743

 

(121,114)

Deferred tax charge on derivative financial instruments

 

(26,181)

 

11,505

Currency translation differences arising from consolidation

 

383,683

 

(361,829)

Total comprehensive income for the period

 

11,441,090

 

9,643,519

 

 

 

 

 

Earnings per share - Basic

4

9.6p

 

9.0p

Earnings per share - Diluted

4

9.5p

 

8.9p

 

 

 

CONSOLIDATED STATEMENT OF FINANCIAL POSITION

As at 30 December 2018

 

 

 

 

 

 

Notes

Unaudited

As at

30 December 2018

£

 

Unaudited

As at

31 December 2017

£

 

Audited

As at

1 July

2018

£

ASSETS

 

 

 

 

 

 

Non-current assets

 

 

 

 

 

 

Intangible assets

 

2,729,264

 

2,547,958

 

2,788,152

Property, plant and equipment

5

39,081,643

 

34,677,619

 

36,408,775

Investment in joint ventures

 

31,975

 

7,332

 

35,501

Loan to joint venture

 

705,909

 

-

 

-

Derivative financial assets

 

108,875

 

8,564

 

68,721

Other receivables and prepayments

 

9,371

 

17,851

 

1,643

Deferred tax asset

 

318,895

 

381,825

 

623,961

 

 

42,985,932

 

37,641,149

 

39,926,753

Current assets

 

 

 

 

 

 

Derivative financial assets

 

206,447

 

73,724

 

14,925

Inventories

 

9,435,849

 

9,034,330

 

12,555,517

Trade and other receivables

 

9,548,902

 

6,494,705

 

7,486,894

Cash and cash equivalents

 

21,879,026

 

24,994,989

 

235,936

 

 

41,070,224

 

40,597,748

 

20,293,272

Total assets

 

84,056,156

 

78,238,897

 

60,220,025

 

 

 

 

 

 

 

LIABILITIES

 

 

 

 

 

 

Current liabilities

 

 

 

 

 

 

Trade and other payables

6

27,145,789

 

25,808,949

 

15,545,845

Corporation tax payable

 

3,016,364

 

2,818,241

 

1,328,673

Derivative financial liabilities

 

-

 

52,491

 

54,691

Borrowings

 

117,677

 

3,482,482

 

201,732

 

 

30,279,830

 

32,162,163

 

17,130,941

Non-current liabilities

 

 

 

 

 

 

Other payables and accruals

6

2,861,683

 

2,546,523

 

2,581,044

Borrowings

 

-

 

3,191,677

 

16,811

Provisions

 

935,975

 

825,852

 

879,808

 

 

3,797,658

 

6,564,052

 

3,477,663

Total liabilities

 

34,077,488

 

38,726,215

 

20,608,604

 

 

 

 

 

 

 

NET ASSETS

 

49,978,668

 

39,512,682

 

39,611,421

 

 

 

 

 

 

 

EQUITY

 

 

 

 

 

 

Share capital

 

112,838

 

112,838

 

112,838

Share premium

 

11,750,056

 

11,749,487

 

11,749,487

Retained earnings

 

33,909,034

 

25,160,751

 

24,348,409

Translation reserve

 

1,264,243

 

687,392

 

880,560

Merger reserve

 

223,251

 

223,251

 

223,251

Capital redemption reserve

 

6,301

 

6,301

 

6,301

Other reserves

 

2,712,945

 

1,572,662

 

2,290,575

Total equity attributable to shareholders

 

 

49,978,668

 

 

39,512,682

 

 

39,611,421

 

 

CONSOLIDATED STATEMENT OF CASH FLOW 

For the period ended 30 December 2018

 

 

 

 

 

Notes

Unaudited

26 weeks ended

30 December 2018

£

 

Unaudited

26 weeks ended

31 December 2017

£

 

 

 

 

 

Profit before tax for the period

 

13,846,665

 

12,935,748

Adjusted by:

 

 

 

 

Depreciation of property, plant and equipment

5

2,482,075

 

1,952,705

Amortisation of intangible assets

 

311,363

 

253,983

Loss of joint ventures

 

83,617

 

 

Net interest expense

 

173,569

 

280,109

Share-based payments

 

408,194

 

366,538

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

 

 

24,253

 

 

9,417

Operating cash flows before movements in working capital

 

 

17,329,736

 

 

 

15,798,500

Decrease/(increase) in inventories

 

3,119,669

 

755,985

Decrease/(Increase) in trade and other receivables

 

(2,071,379)

 

(484,352)

Increase in trade and other payables and provisions

 

12,645,018

 

10,064,095

Cash inflow generated from operations

 

31,023,044

 

26,134,228

Interest received

 

708

 

84

Income tax paid

 

(1,319,577)

 

(1,116,051)

Interest paid on:

 

 

 

 

-       finance leases and hire purchase loans

 

-

 

(1,192)

-       derivative financial instruments

 

(99,828)

 

(82,542)

-       bank loans and overdraft

 

(61,272)

 

(777)

Cash flows from operating activities

 

29,543,075

 

24,933,750

 

 

 

 

 

Purchase of property, plant and equipment

 

(5,632,011)

 

(6,136,967)

Proceeds from disposal of property, plant and equipment

 

9,500

 

 

 

-

Investment in joint venture

 

(7,200)

 

-

Loan to joint venture

 

(778,800)

 

-

Purchase of intangible assets

 

(241,427)

 

(257,524)

Cash flows used in investing activities

 

(6,649,938)

 

(6,394,491)

 

 

 

 

 

Proceeds on issue of shares

 

569

 

-

Buy back of Chocolate bonds

 

-

 

(110,500)

Capital element of hire purchase and finance leases repaid

 

(100,866)

 

 

(136,328)

Dividends paid

 

(1,241,220)

 

(1,805,405)

Cash flows used in financing activities

 

(1,341,517)

 

(2,052,233)

 

 

 

 

 

Net change in cash and cash equivalents

 

21,551,620

 

16,487,026

Cash and cash equivalents at beginning of period

 

235,936

 

8,470,178

Foreign currency movements

 

91,470

 

37,785

Cash and cash equivalents at end of period

 

21,879,026

 

24,994,989

CONSOLIDATED STATEMENT OF CHANGES IN EQUITY 

For the period ended 30 December 2018

 

Share capital

£

 

Share Premium

£

 

Retained earnings

£

 

Translation reserve

£

 

Merger reserve

£

Capital redemption reserve

£

 

Other reserves

£

 

 

Total

£

 

 

 

 

 

 

 

 

 

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

 

 

 

 

 

 

 

 

 

Share-based payments

-

-

-

-

-

-

360,047

360,047

Deferred tax charge on share-based payments

-

-

-

-

-

-

333,697

333,697

Loss for the period

-

-

(812,342)

-

-

-

-

(812,342)

Other comprehensive income:

 

 

 

 

 

 

 

 

Derivative financial instruments

-

-

-

-

-

-

15,113

15,113

Deferred tax credit on derivative financial instruments

-

-

-

-

-

-

9,056

9,056

Currency translation differences arising from consolidation

-

-

-

193,168

-

-

-

193,168

Equity as at 1 July 2018

112,838

11,749,487

24,348,409

880,560

223,251

6,301

2,290,575

39,611,421

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Equity as at 1 July 2018

112,838

11,749,487

24,348,409

880,560

223,251

6,301

2,290,575

39,611,421

Issue of share capital

-

569

-

-

-

-

-

569

Share-based payments

-

-

-

-

-

-

408,194

408,194

Deferred tax charge on share-based payments

-

-

-

-

-

-

(241,386)

(241,386)

Profit for the period

-

-

10,801,845

-

-

-

-

10,801,845

Dividends paid

 

 

(1,241,220)

 

 

 

 

(1,241,220)

Other comprehensive income:

 

 

 

 

 

 

 

 

Derivative financial instruments

-

-

-

-

-

-

281,743

281,743

Deferred tax charge on derivative financial instruments

-

-

-

-

-

-

(26,181)

(26,181)

Currency translation differences arising from consolidation

-

-

-

383,683

-

-

-

383,683

Equity as at 30 December 2018

112,838

11,750,056

33,909,034

1,264,243

223,251

6,301

2,712,945

49,978,668

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 1 July 2018 and that are expected to be applied in the Group's Annual Report and Accounts for the period ended 30 June 2019. There are new or revised standards that apply to the period beginning 2 July 2018 but they do not have a material effect on the financial information for the period ended 30 December 2018.

 

The comparative financial information for the period ended 1 July 2018 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 1 July 2018 have been delivered to the Registrar of Companies.


The auditors' report on the accounts for 1 July 2018 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

30 December 2018

£

 

Unaudited

26 weeks ended

31 December 2017

£

 

 

 

 

 

Staff cost

 

17,629,785

 

15,957,108

Depreciation of property, plant and equipment

 

2,482,075

 

1,952,705

Amortisation of intangible assets

 

311,363

 

253,983

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

 

 

24,253

 

 

9,417

Operating leases:

 

 

 

 

-       Property

 

5,831,625

 

5,435,700

-       Plant and equipment

 

129,264

 

94,391

Exchange differences

 

34,702

 

85,702

Bad debt expense

 

20,035

 

20,037

 

 

 

3.             Finance income and expenses

 

 

 

Unaudited

26 weeks ended

30 December 2018

£

 

Unaudited

26 weeks ended

31 December 2017

£

 

 

 

 

 

Interest on bank deposits

 

708

 

84

Unrealised interest on derivative financial instruments

 

4,624

 

15,835

Finance income

 

5,332

 

15,919

 

 

 

 

 

Interest on bank borrowings

 

78,134

 

57,410

Realised interest on derivative financial liabilities

 

99,828

 

82,542

Finance leases and hire purchase contracts

 

939

 

1,192

Finance charges on Chocolate bonds

 

-

 

154,884

Finance expenses

 

178,901

 

296,028

 

 

 

 

 

 

 

4.             Earnings per share

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

 

 

 

Unaudited

26 weeks ended

30 December 2018

£

 

Unaudited

26 weeks ended

31 December 2017

£

 

 

 

 

 

Profit after tax for the period

 

10,801,845

 

10,114,957

 

 

 

 

 

 

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

30 December 2018

 

 

Unaudited

26 weeks ended

31 December 2017

 

 

 

 

 

 

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

 

112,838,213

 

112,837,828

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

 

340,202

 

214,728

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

 

113,178,415

 

113,052,556

 

 

 

 

 

Earnings per share (pence) - Basic

 

9.6

 

9.0

Earnings per share (pence) - Diluted

 

9.5

 

8.9

 

As at 30 December 2018, the total number of potentially dilutive shares issued under the Hotel Chocolat Group plc Long-Term Incentive Plan was 3,657,000 (31 December 2017: 3,667,000). 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 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

 

 

 

 

 

 

26 weeks ended 30 December 2018

 

 

 

 

 

Cost:

 

 

 

 

 

As at 1 July 2018

12,837,367

734,999

34,890,442

18,895,928

67,358,736

Additions

388,316

-

3,761,655

607,334

4,757,305

Disposals

-

-

(2,701,232)

(15,000)

(2,716,232)

Translation differences

410,550

-

42,132

-

452,682

As at 30 December 2018

13,636,233

734,999

35,992,997

19,488,262

69,852,491

 

 

 

 

 

 

Accumulated depreciation:

 

 

 

 

 

As at 1 July 2018

724,685

734,206

18,752,462

10,738,608

30,949,961

Depreciation charge

97,867

475

1,714,166

669,567

2,482,075

Disposal

-

-

(2,682,480)

(1,625)

(2,684,105)

Translation differences

9,304

-

13,613

-

22,917

As at 30 December 2018

831,856

734,681

17,797,761

11,406,550

30,770,848

 

 

 

 

 

 

Net book value

 

 

 

 

 

As at 30 December 2018

12,804,377

318

18,195,236

8,081,712

39,081,643

 

 

 

 

 

 

 

As at 30 December 2018, the net book value of freehold property includes land of £2,941,238 (31 December 2017: £2,767,923), which is not depreciated.

 

Included above are assets held under finance leases and hire purchase agreements. As at 30 December 2018, the net book value of such assets within plant & machinery is £ nil (31 December 2017: £269,690) and within computer software & hardware is £335,067 (31 December 2017: £456,106).

 

 

6.             Trade and other payables

 

 

 

Unaudited

26 weeks ended

30 December 2018

£

 

Unaudited

26 weeks ended

31 December 2017

£

Current

 

 

 

 

Trade payables

 

4,091,494

 

4,554,352

Other payables

 

3,933,504

 

2,855,517

Other taxes payable

 

8,317,253

 

7,625,446

Accruals

 

10,803,538

 

10,773,634

 

 

27,145,789

 

25,808,949

Non-current

 

 

 

 

Other payables

 

2,861,683

 

2,546,523

 

 

2,861,683

 

2,546,523

 

 

 

 

 

                                               

 


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