Sweet-toothed investors will soon be able to take a taste of the earnings potential of Hotel Chocolat. The premium British chocolatier has announced its intention to float on AIM in the second quarter by way of a £50 million placing to accelerate its growth strategy.
Hotel Chocolat is targeting a £150 million debut AIM tag, expecting to raise around £50 million in aggregrate, of which £10 million will represent new money for expansion. Liberum Capital is broker and nominated advisor to the luxury chocolatier, which manufactures and sells premium chocolate products both online and through a network of 84 stores in the UK and also abroad, sporting three sites in Copenhagen.
Founded in 1993 by Angus Thirlwell, CEO (pictured) and Peter Harris, the retailer claims a proven track record of sustainable, organic sales growth, profitability and strong cash generation; indeed it made a rather tasty £7.9 million of EBITDA from £81.1 million sales in the year ended 28 June 2015. Significantly, the chocolatier says around half a million active customers, classfied as those consumers who've made an online purchase in the past 24 months, are currently engaged through the website.
Thirlwell comments: 'Hotel Chocolat is built on our core values of authenticity, originality and ethical trading. We are very excited at the prospect of listing as it is the next logical step in our growth plans and will enable us to accelerate the many initiatives that we have in place, in particular additional investment in our British chocolate manufacturing, in new stores and in our digital offering.'
Among the key strengths highlighted by management are the popularity of the premium Hotel Chocolate brand as well as the group's vertically integrated model, with part of the retailer's cocoa supply coming from the Rabot Estate in St Lucia.
This cocoa plantation on the island, where the luxury chocolate maker has formed a sustainable cocoa group with local farmers, gives the group 'increased control to ensure a premium product for customers'. Hotel Chocolat also boasts a non-seasonal Tasting Club with over 70,000 members who score its new chocolate ideas on a regular basis, thereby helping the company to innovate.
Unsurprisingly, Hotel Chocolat does have a seasonal bent to its business, though its seeming resilience will whet the appetites of many investors. Others will recall rival Thorntons' record as a quoted company. This was patchy to say the least and the British brand, a serial offender in terms of weather-related profit warnings, was picked off by Italian confectioner Ferrero last summer.