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Strong Christmas sales drove a surge in revenues at Hotel Chocolat (HOTC) during the second half of 2018.
Total sales jumped 13% to £80.7m for the 26 weeks to 30 December 2018, as it was also buoyed by 14 new store openings in the UK and Ireland.
UK sales growth boosted profitability, driving a 7% increase in pre-tax profits to £13.8m over the period.
The AIM-listed retailer, founded in 1993, reported “strong” growth across each of its high street retail, digital and wholesale channels.
Online sales jumped by 22% on the back of increased web traffic, although subscription sales declined by 25% as customer acquisition slowed during the development of new subscription models.
Trading in 2019, including the busy Valentine’s period, has matched growth estimates, the retailer said in this morning’s trading update.
“This has been another period of progress for Hotel Chocolat with strong growth in sales, profits and cash generation,” commented co-founder and CEO of Hotel Chocolat Angus Thirlwell.
“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.
“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.
“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.”
Hotel Chocolat improved its balance sheet on the back of profit growth, increasing net cash to £21.8m at the end of the period, from £18.3m after the first half of 2018.
Shares rose 3.2% to 315.7p in early trading.
Morning update
WH Smith (SMWH) has boosted its board of directors with three new appointments, including the addition of the head of its High Street division.
WH Smith High Street MD, Carl Cowling, joins the retailer’s board after five years which the business he initially joined as MD of its travel arm.
He will be joined on the board by Fuller, Smith & Turner chief executive Simon Emeny, who recently orchestrated the sale of the group’s beer business to Asahi for £250m.
Emeny has led the London-based hospitality business since 2013, following a number of consumer-focussed roles, including the role of director at Dunelm Group.
Chairman of supply chain finance specialists Greenhill Capital, Maurice Thompson, will also join Cowling and Emeny on the board.
Thompson has more than 30 years of experience in the international banking industry, and was previously chief executive of Citibank in the UK.
“Since joining WH Smith in 2014, Carl has made a significant contribution to the Company, in both our Travel and High Street businesses,” commented WH Smith chairman, Henry Staunton.
“He will be a valuable addition to the Board as we continue to deliver the strategies for each business and create value for shareholders.
“We are delighted to welcome Simon and Maurice on to the Board of WH Smith. Their combined retail and financial expertise will ensure we continue to be well positioned to invest in new opportunities and grow the business.”
Profitability improved at Sausage-skin maker Devro (DVO) on the back operating improvements at its manufacturing sites.
Pre-tax profits for the year to December 2018 jumped to £32.1m from £29.5m in 2017.
The improvement came despite a £3.5m decline in underlying sales, which fell to £253.4m for the year.
Rutger Helbing, CEO of Devro said: “We continued to make significant progress on our strategic priorities in 2018, delivering manufacturing efficiency improvements, in particular at our US plant, driving average selling price improvements in China and establishing the building blocks for future growth supported by our new Fine Ultra product platform.
“Despite ongoing pressures from input cost inflation, principally salary and utility costs and exchange rate volatility, at this early stage of the year the Board believes that Devro is well placed to make good progress in 2019.”
The FTSE 100 has slumped in early morning trading, dropping 0.7% to 7,130pts, following a decline in the Asian markets.
The early risers include Devro (DVO), up 3.5% to 177p and Marks and Spencer (MKS), up 0.7% to 295.8p.
The early fallers include Stock Spirit Group (STCK), down 4.1% to 217.5p, Purecircle (PURE), down 3.7% to 250p, and BAT (BATS), down 2.4% to 2,823p.
Yesterday in the city
The FTSE 100 remained fairly flat, jumping just 0.1% in trading yesterday, up to 7,183pts, following a boost in sentiment regarding US-China trade negotiations.
Private label bakery business Finsbury Food Group (FIF) slid 1.8% to 80.5p, after business closures meant headline revenues declined.
Sugar giant ABF (ABF) saw a similar slump in value, dropping 1.7% to 2,273p as it revealed second half sales would match targets, expect for already-below par sugar sales.
Other fallers included Eagle Eye Solutions (EYE), down 2.7% to 142.5p, Premier Foods (PFD), down 2.5% to 37p and Greencore (GNC), down 2.3% to 197p.
It was a more positive day for household goods supplier McBride (MCB), which rose 2.7% to 94p, following a substantial decline in value follow its results announcement last week.
Other risers included Just Eat (JE.), up 2.3% to 720p, Marks and Spencer (MKS), up 1.8% to 293.7p, and Nichols (NICL), up 1.5% to 1,555p.
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