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MIDAS SHARE TIPS UPDATE: Hotel Chocolat can still melt in the mouth

MIDAS SHARE TIPS UPDATE: Our tip, Hotel Chocolat, can still melt in the mouth


If life is, as Forrest Gump so famously remarked, like a box of chocolates, then Hotel Chocolat chief executive and founder Angus Thirlwell could be forgiven for thinking that the pandemic had turned his into the equivalent of an out-of-date packet of Milk Tray. 

With Christmas last year all but cancelled, few people wanted to buy a £150 Eat Drink and Be Merry chocolate hamper or even a £35 Chocolate Dipping Adventure. 

Valentine’s Day was a damp squib too. With many of us confined to our local areas and feeling gloomy, it was easier to purchase a bar of Dairy Milk from the local corner shop than splurge on something more romantic. 

Despite all of this, Hotel Chocolat’s full-year figures were still a box of delights for investors. 

Tasty: Hotel Chocolat’s full-year figures were still a box of delights for investors

The AIM-listed stock posted revenue up by a fifth and returned to profit after last year’s Covid-driven losses. 

What’s the secret? The company has pivoted its focus to digital, launched a popular subscription model for its hot chocolate maker – the Velvetiser – and grown its business in the US and Japan. 

Thirlwell says the company has ‘evolved from a UK store-led brand to a globally ambitious digital-led brand’. He believe this positions the business well for the future. 

Brokers were impressed with the company’s financial numbers. Jonathan Pritchard, at Peel Hunt, said current trading is ‘clearly exceptional’. 

He is excited by the prospect of the company’s first ever television campaign, which he says will help improve brand recognition since some people still think Thirlwell is running a hotel chain. 

Wayne Brown, at house broker Liberum, describes the company as having a ‘well-articulated and focused strategy across three main geographies’. 

Both brokers are keen to stress the company’s commitment to sustainability, which should be enough to keep Hotel Chocolat on the radar of ESG (Environmental, Social and Governance) focused buyers. 

Both brokers have upgraded their forecasts for the company. Despite the good news, there are still some stale coffee creams at the bottom of this selection box. 

Like other businesses, the company is suffering from pricing pressures at home, which could hit the bottom line. But with its production heavily based in the UK, the company shouldn’t suffer as serious supply chain issues as rivals. 

The company also didn’t reinstate its dividend, a disappointment for those shareholders hungry for income. 

Hotel Chocolat’s shares ended the week at £4.75. A premium price for a premium company.

Midas verdict: Midas has a sweet tooth when it comes to Hotel Chocolat. We tipped the shares at £3.45 in 2018, and they’ve put on more than a pound since then. 

The company’s shares aren’t cheap, but as chocolate connoisseurs will tell you, some things are worth paying for. Hold. 

Traded on: AIM Ticker: HOTC Contact: hotelchocolat.com 03444 93 23 23. 

Read more at DailyMail.co.uk