FY17 Preliminary results September 2017
Financial highlights £105.2m £16.3m £11.2m £91.1m £81.1m £12.4m £5.6m £7.8m £2.0m ‘15 ‘16 ‘17 ‘15 ‘16 ‘17 ‘15 ‘16 ‘17 UNDERLYING EBITDA 2 REVENUE PROFIT BEFORE TAX £105.2m £16.3m £11.2m (2016: £91.1m) (2016: £12.4m) (2016: £5.6m) +12% +32% +100% YEAR-ON-YEAR 1 YEAR-ON-YEAR YEAR-ON-YEAR PROFIT AFTER TAX EARNINGS PER SHARE MAIDEN DIVIDEND £8.8m 7.8p 1.6p (2016: £4.1m) (2016: 3.9p) 1. Reported revenue is for 53 weeks, (FY16 52 weeks). Revenue growth is for 52 weeks in constant currency on a pro forma basis (FY17 £104.2m, FY16 £93.1m). Hotel Chocolat Estates St Lucia (HCESL) was acquired by the group in April 2016, the pro forma includes the results for HCESL for the entirety of both periods. The impact of the 53 rd week on reported EBITDA and profit is not material. 2. Underlying EBITDA is stated before share-based payments (FY17 £0.6m, FY16 £0.1m) and exceptional costs relating to the IPO (FY17nil, FY16 £2.6m)
Operational highlights 12 2 6 +30% +20% 1 NEW STORES FRANCHISE STORES NEW WHOLESALE MOBILE CONVERSION FACTORY SUCCESFUL STORE OPENED IN HONG KONG ACCOUNTS FOR FY18 ON NEW WEBSITE CAPACITY GROWTH REFIT TEST 15 OPERATIONAL HIGHLIGHTS GROWTH STRATEGY IS ON TRACK • Strong Seasonal ranges, product innovation and good availability 1. Open stores & new shop+cafe format drove increases in existing store and online sales 2. Increase capacity and capture efficiencies from the • Opened 12 stores in UK, pipeline is strong. Now have 16 shop+cafe vertically integrated supply chain format stores, with ability to flex offer for each location. Success of 3. New digital site to grow customer base and improve new format suggests stores are viable in smaller catchments than gifting proposition shop-only format • Hong Kong franchise partner opened two stores in Q4 FY17, in advance of peak winter gifting season • 6 new wholesale accounts since period end, increasing customer convenience • New website increased mobile conversion by 30%, over half of site traffic now comes from mobiles & tablets • Factory investment: capacity increased by over 20%, gross margin +110bps Year-on-Year • Encouraging early results from refit of Milton Keynes store 2
Group income statement 53 weeks ended 52 weeks ended 2 July 2017 26 June 2016 £000 £000 Revenue 105,240 91,089 Revenue growth +12% Year-on-Year 1 Cost of sales (33,758) (30,237) Gross margin increased by 110bps from 66.8% to 67.9% Operating expenses (55,135) (48,457) Operating cost ratio reduced by 80bps from 53.2% to 52.4% EBITDA growth +32% Year on Year Underlying EBITDA 16,347 12,395 EBITDA margin improved by 190bps from 13.6% to 15.5% Exceptional costs - (2,642) Costs relating to flotation in May 2016 Share based payments (562) (65) Depreciation & amortisation & loss on disposal (3,857) (3,322) Operating profit 11,928 6,366 Finance income 3 172 Prior year interest from related party (HC Estates, St Lucia) Finance expenses (726) (947) Includes £0.1m non-cash interest on FX derivatives (FY16: £0.1m) Profit before tax 11,205 5,591 Tax expense (2,441) (1,507) Profit for the period 8,764 4,084 Profit growth +115% Year on Year Profit for the period divided by the weighted average number of shares in issue EPS – basic and diluted 7.8 3.9 (FY17 113m, FY16 103m). Number of shares in issue is unchanged since IPO. 1) Revenue on Pro forma basis in constant currency Proforma revenue includes results of HC Estates Ltd, Saint Lucia in both years, whereas Revenue for 52 weeks ended 25 June 2017 104,169 93,139 statutory basis above excludes for part of the prior year. HC Estates was acquired by the Group in April 2016. The impact of the 53 rd week on EBITDA and profit is not material 3
Group balance sheet As at As at 2 July 2017 26 June 2016 £000 £000 Non-current assets Intangible assets 2,338 1,857 Capital investments in factory and new stores Property, plant and equipment 31,398 26,111 Derivative financial assets - 85 Prepayments 7 7 Deferred tax asset 214 - 33,957 28,060 Current assets Derivative financial assets 307 439 9,878 6,604 More efficient production plan; 12 weeks forward stock cover (FY16 9 weeks) Inventories Trade and other receivables 6,021 5,535 53 rd week in FY17 included £4m of payments, comparable week £12.5m vs £6.5m FY16 Cash and cash equivalents 8,470 6,475 24,676 19,053 Total assets 58,633 47,113 Current liabilities 53 rd week included £4m of payments, comparable week £20.6m vs £16.3m Trade and other payables 16,633 16,334 Corporation tax payable 1,105 611 Derivative financial liabilities 137 - £3.4m of chocolate bonds potentially repayable June 2018 Borrowings 3,371 433 Provisions - - 21,246 17,378 Non-current liabilities Other payables and accruals 1,934 1,485 Derivative financial liabilities 34 - Deferred tax liabilities - 79 Borrowings 3,504 6,643 £3.5m of chocolate bonds potentially repayable July 2018 Provisions 751 464 6,223 8,671 Total liabilities 27,469 26,049 NET ASSETS 31,164 21,064 5 6 4
Group cash flow 53 weeks 52 weeks ended ended 2 July 2017 26 June 2016 £000 £000 Profit before tax for the period 11,205 5,591 Adjusted by: Depreciation, amortisation & impairment 3,745 3,194 Net interest expense 723 775 Other non-cash expenses 674 193 Operating cash flows before movements in working capital 16,347 9,753 68% increase driven by sales growth & cost control 53 rd week impact Changes in working capital (3,020) (1,088) Cash inflow generated from operations 13,327 8,665 Income tax paid (1,832) (549) Interest paid (440) (690) Cash flows from operating activities 11,055 7,426 Cash flows used in investing activities (8,384) (5,957) Cash flows from/(used in) financing activities (828) 10,583 IPO proceeds in prior year Net change in cash and cash equivalents 1,843 12,052 Cash and cash equivalents at beginning of period 6,475 (5,697) Foreign currency movements 152 120 53 rd week in FY17 included £4m of payments Cash and cash equivalents at end of period 8,470 6,475 5 5
Positioned for growth DIFFERENTIATED BRAND & PRODUCTS LARGE AND GROWING MARKETS • • £20bn UK gifting market 1 Core brand ethos of: ORIGINALITY, AUTHENTICITY AND ETHICS • £6bn UK chocolate market 2 • Differentiated taste “More cocoa, less sugar” • £8bn UK cafe market 3 • Accessible luxury: prices from £1 to £300 • HC has significant headroom in each • High rate of product innovation within • Consumer research shows perceived “lack of disciplined range architecture access” is the main barrier to purchase • Consumer research shows high advocacy GROWTH FROM PROVEN FORMATS STRONG PLATFORM • • Shop+cafe format Vertical integration is responsive whilst also protecting intellectual property • Website growth of +18% • Now leveraging top line growth • Subscriptions 2.0 coming soon • Further economies of scale available • • Ability to increase capacity at factory and New digital wholesale partners distribution centre Source: 1) Mintel 2) Canadean 3) Allegra 6
Operational progress
Store portfolio growth Opened 12 stores in FY17, further 8 stores will open in H1 FY18 99 Including signed Less than 20% of store estate currently features the additional café offering leases 91 UK & Ireland Store portfolio growth: New Sites in FY17 FY18 Openings & Signed Leases SHOP+CAFE OPENED: 80 Worcester Beverley Chelmsford Clarks Designer Outlet Bury St Edmunds Cheshire Oaks Designer outlet LEASE SIGNED Euston station Oxford Westgate Centre Covent Garden Piazza Teeside Retail park Glasgow Buchannan Street Birmingham Belfast Donegall Square Dublin, Dundrum Centre Peterborough Shrewsbury Colchester SHOP ONLY Clapham Junction Station Crawley ‘16 ‘17 ‘18 Wandsworth 8 5
Capital investment in new stores Shop+cafe format: Full retail range with the addition of: • Drinks-led cafe: Hot Chocolat, coffee and ‘Ice Cream of the Gods’ • Reduced capex cost per square foot without compromising premium feel • Chocolate the majority of sales, with higher sales & profit for a given catchment Can flex to make best use of available space: • Small/Travel Euston Station: shop+takeaway only cafe • Large Glasgow Buchanan St: shop + 50 seat cafe • Designer Outlets Cheshire Oaks & Clarks Village 9
Investment in existing stores • Ice Cream of the Gods rolled out to 40 stores for Summer 2017, counter-seasonal trading • In-house School of Chocolate diploma gives staff the knowledge to deliver Chocolate Lock-ins; paid-for tasting events after trading hours. Events are profitable and increase brand affinity, now in 38 stores • Refit of an existing store (Milton Keynes) in Summer 2017, initial results encouraging suggesting scope to roll out cafe retrofits 10
Digital growth opportunity Website Results • Sales +18% • New site launched in H2 New Features: • Improved content • Mobile & tablet compatible (conversion increased 29%) • Majority of traffic is now from mobiles • Build your own gift hamper tool In Development Mobile app launches in 2018: • Easiest gift sending • Enables a loyalty rewards programme 11
Recommend
More recommend
