Hotel Chocolat Share Discussion Threads

[nithbank] 13/10/2021 20:14

The company has a buy recommendation in the current Investors Chronicle.

[nithbank] 13/10/2021 12:29

Sustained buying.

[williamcooper104] 11/10/2021 16:53

Hope so Just realised it's now £12 for 3 packs and not £10 Nice getting hit with inflation and then hopping there's some margin expansion there It's almost £15 for 3 in Japan

[nithbank] 11/10/2021 08:55

Hitting 5 pounds soon...

[williamcooper104] 07/10/2021 10:08

I'll take a dividend in specie

[oracle14] 07/10/2021 09:58

With regard to high levels of stock I would have thought going into Christmas would be a valid reason to hold higher levels in anticipation of orders assuming the product shelf life can be maintained

[williamcooper104] 06/10/2021 14:39

You're right to watch sceptically I love the product and think it's got a great niche/brand But UK retailers past global roll outs isn't a happy tale Thus I have a position; but it's a small one

[jennifer67] 06/10/2021 13:18

I hope you are right. I suspect they are chasing growth at the long term expense of the business. I would keep an eye on inventory levels and cash burn rate as an indicator of how successful the growth channels are working.

If I am right you may see a write off/impairment charge on stores, inventory and Japan JV in the next few years and a share price below £4. If I am wrong HOTC will be £12.00 a share!

[williamcooper104] 06/10/2021 12:59

I did notice the high levels of stock - but I took more comfort from it in that given inflationary/supply chain pressures the value of stock in hand is higher than it otherwise is As for declining profits, and cash generation ; its all going to be negative for quite a while It's a growth stock; dividends are a long long way away 2.5x sales and about 25x EBITDA (including cash rents), suggests that it's not too richly valued There's a lot of execution risk; but at least the balance sheet looks good. A lot of the leases are 2-4 years so they can be renegotiated lower over the coming years which will help

[jennifer67] 06/10/2021 12:30

A great growth story. I don't have a dog in this fight and don't own HOTC shares, but there are a few red flags that concern me.

1. Auditors delayed results by a week.
Any explanation? Is this due to poor planning or concerns that needed to be resolved with management?
2. Sales up 21%, inventory up 130%
HOTC state this is to support future growth but looks like an overstock situation to me.
3. Net cash outflows of £17m for FY21.
This is a result of increased inventory and capex for rollout of overseas sites. Will they continue to burn cash in the future or be cash positive? I suspect they will continue to burn cash hence the £40m equity raise and increase in finance facility.
4. Since 2017 sales have grown from £102m to £165m in 2021. PAT has dropped from £11m to £5.7m. Dividends have been suspended.

Covid19 may have played a role in some of the noise but I suspect is a convenient scapegoat masking some loss making decisions ie overseas expansion in US and Japan and category expansion into alcohol and beauty.

Happy to be taken down and told that this is just a negative way of looking at HOTC.

[williamcooper104] 05/10/2021 09:46

Great results Looks like quite a bit of operating leverage capacity for future growth Underlying EBITDA of £28m seems to exclude rent payments, taking £8m of "IFRS 16 capital payments" out gets to £20m EBITDA - IMO EBITDA should be post rent costs unless it's stated as EBITDAR (which is of less value when looking at a retailer)

[nithbank] 05/10/2021 07:07

Onwards and upwards. 27 stores in Japan I notice.

[williamcooper104] 21/9/2021 13:13

And don't forget that the best performing stock over the last 40 years isn't a tech company but Monster energy drinks So niche consumer product rolled out globally can have a lot of upside

[williamcooper104] 21/9/2021 13:11

Very simple bull case for me I love their chocolate (Though the quality and low to no sugar products enabling chocolate to be rebranded as a health food is genius)

[nchanning] 21/9/2021 12:52

Very simple bull case here . Management wants to add capacity to get to £500m revenue . If they achieve this in the next 5 years , with a high gross margin , direct to consumer luxury brand that will be growing fast I wouldn't be surprised to see a 5 x sales valuation and a 5 bagger from here .Given that they already had the capacity to hit £250m revenue and did a placing anyway to build out capacity now , there's cause to be optimistic that this is possible . Management have huge shareholdings and are totally aligned with investors , have to believe they think this is realistic

[jaf111] 21/9/2021 10:29

Nice move up in the run up to results due end of month.....
Some of us might regard this rise as very overdue....

[nithbank] 03/8/2021 09:20

Interesting that the optimal point for the options is £12 per share! Lot to be optimistic about here.

[superadams] 13/7/2021 16:37

Seems to be morphing from a high growth retail roll-out stock into an online story with supergrowth rates to go with it. Just hope production and supply line keeps pace. Bought some more to day as am hoping for a chart breakout to herald accelerating share price performance.

[gswredland] 13/7/2021 16:15

Likely to get broker upgrades

[williamcooper104] 13/7/2021 12:30

Has a long growth trajectory Happy to hold for the ride

[gswredland] 13/7/2021 10:17

Yep as you say really impressive
Sticking with it!

[nithbank] 13/7/2021 07:21

Very impressive results. Strong growth in all sectors and US and Japan sales have increased significantly. Profit forecast to be higher than forecast.

[nithbank] 01/6/2021 07:09

Big push by the company to sell its coffee capsules.

[21ant] 10/5/2021 08:11

Brilliant - timed this one right for a change 😀