Thats not a reason to buy…
As you say, their sales improve at christmas only, and the rest of the year it does nothing.
Also worth noting that the company seems to have an inventory problem. Almost every store I go into has chocolates 50-70% off because they’re nearing their expiry dates. Great for customers, but not the top line for sure.
I personally think it’s true, chocolate is an almost uniquely accessible indulgence (you don’t need to travel anywhere, you don’t need to spend any extra money to enjoy it). And that’s ignoring the cultural associations it has. Building a multinational chocolate brand is notoriously difficult which is why you have more fingers on one hand than companies that have done it successfully. HOTC will be a better, more profitable company for focusing on the UK.
Anecdotally I’m seeing far more Hotel Choc bags around town than last Xmas. Make of that what you will!
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Final results and trading update out! New info includes:
•Pursuing brand licensing opportunities for foreign markets as well as capex-light wholesale model to replace unprofitable DTC
•Retail is stable (there goes my anecdote), online/wholesale softer but less discounting overall and lower “online acquisition marketing” should boost profit
•Angus Thirwell “people are still treating themselves with affordable luxury”
All in all a positive update, quite likely the company beats this year’s profit expectations which are estimated at less than half FY22’s £21m.
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UK sales fell 5% YoY in H2 which isn’t bad all things considered. Less marketing and discounts seems to have helped cash generation and probably margins.
Did you keep you holding @dk1
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Great deal for Hotel chocolate shareholders
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This is going to sound crazy Neil, but not only did I hold but I topped up £20 yesterday! Only a small £150ish holding so barely £110 in profit but not bad. Almost covers all the choc I’ve bought off them the last few years…
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Ha! I love it, such good timing! I’ve always wanted their ostrich Easter egg - you can now and it’ll be ‘free’ too
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Guess this means no more movement on the stock price…?
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Nice surprise to help alleviate pain from alibaba fall…
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This looks like a pretty good deal. If Mars was public, I’d have a good look at investing as I like a family owned business. That said, the company not being beholden to lots of shareholders means it can think truly long term. And, for me, the fact that it hasn’t had to raise capital through public markets is a relatively sure sign it has an exceptional business.
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WUT?
What it means is the shareholders are now Mars
Yes, it gives the stability push into other territories where they’ve failed in the past, but you think Mars wont be looking for returns?
HC have a problem here, they own a limited supply of cocoa (& the hotel its linked to hasnt recovered from COVID levels yet), yet they’re wanting to expand…
On their own, their knacked… with Mars they might be able to…
But lets say they use Mars’ supply chain to plough into America… how are they going to get that supply there.
What will happen is certain territories will use Mars chocolate and at some point the ‘premium price point’ will be found… and then rebound.
Crack open your Desani water bottles everyone, If you made buck great; but wait for the panorama ‘great chocolate expose’ to come about
Oh Mars would 100% be a hold of it were public, feels like a nice mix of growth and dividend.
It’s interesting to me about how the ownership stays sharp without the public scrutiny. I’m sure there are some interesting readings to be done around this and other companies. Long-term thinking is something very lacking in many public companies.
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The share price can move until the deal completes. Mars have agreed to pay 375p while the stock trades at 362.5p.
There is a niche market for investors to buy stock now and just wait until the end of January when it closes. It’s 3.5% for tying up your money for 2 months.
The delta between these figures is a reflection of the of -
likeness of the deal closing x time it takes to close the deal
@dk1 is in this position, how are you handling this? Are you taking today’s price or holding out for the 375p?
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I’m waiting as I have no immediate need for the money.
Does anyone know, if this deal is agreed and completed, will Hotel Chocolat be taken off the London stock exchange and all the remaining shareholders be paid 375p for their shares?
Yep, Mars are planning for this to be done by the end of January.
I suppose it’s that lack of scrutiny in terms of quarterly reports, EPS growth etc and Wall St’s general obsession with short-term performance that allows it to think longer term. In the grand scheme, how useful is all that noise anyway? 
I’ve read that you can get all the Mars shareholders together in one decent-sized room. That’s got to help agility-wise. They were probably able to thrash this deal out very quickly in relative terms.
Thanks for the explanation! 
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