Posh chocolates brand is delivering the goods at home and overseas


Loss to date: 0.8%

Original entry point: Buy at 423.5p, 19 December 2019

Although the share price has proved volatile, we are sticking with our bullish stance on premium chocolatier Hotel Chocolat (HOTC:AIM), one of our ‘10 winning stocks for 2020’ selections.

A solid first-half performance (25 Feb) and a positive overseas progress update have only increased our confidence that we’ve backed a long-term winner.

Reassuringly, Hotel Chocolat is also making great strides with investments and upgrades in a supply chain that recently encountered inefficiencies amid rapid growth from a widening array of sales channels.

Angus Thirlwell-led Hotel Chocolat served up 7% year-on-year growth in first-half pre-tax profit to £14.9m on sales up 14% to £91.7m, reflecting the continued appeal of the brand and ongoing product innovation.

The high-quality company generated a double-digit increase in profitability from its UK estate, bucking the broader high street trend, testament to the strength of the Hotel Chocolat brand, whose products are priced as an affordable luxury.

While new markets in the US and Japan are still in the early stages of development, Hotel Chocolat says ‘consumer response to the brand is encouraging, sales are growing, and we believe we have a deliverable plan to achieve attractive returns’.

SHARES SAYS: We remain buyers of Hotel Chocolat.

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