Some Press have been speculating over the need for Hotel Chocolat to raise funds. The board clearly decided that the speculation was affecting the share price and felt moved to make a statement – which we have copied below.
What is slightly bizarre however is that whilst they state in this press release that they are assessing funding options and a further announcement will be made as necessary, on the same day they in fact launch a funding round for £40 million.
A few days earlier Sky news reported that the business was planning to launch a funding round of circa £30 million.
Investors reacted well however and the share price rose 2.6% to 369.5p on the back of the share placing at 355p. The total raised represents about 9% of the total share capital.
During a share placing the company goes to its existing investors and offers them shares usually at a discount in order to bring capital into the business. This also has the effect of diluting shareholders who don’t take up the offer.
It was only a year ago in March that the company raised £20m as the country went into lockdown. This time however the board says that they are raising the money for expansion and growth rather than for surviving a lockdown.
Hotel Chocolat has 126 UK stores as well as a presence in Japan and the US. Their growth has come from Predominantly digital channels during the Pandemic.
The company took the opportunity to also restructure their credit facility, paying back the government £25m coronavirus loan, and taking out a £30m revolving credit facility.
Hotel Chocolat issued the following press release on July 22nd, the same day as their share placing.
“The Board of Hotel Chocolat notes recent press speculation and confirms that it continues to assess funding options, which may include a possible equity issue, to increase the Company’s long term sales capacity to capitalise on faster growth. A further announcement will be made if appropriate.
Hotel Chocolat is a premium British chocolatier with a strong and distinctive brand. The business was founded in 1993 by Angus Thirlwell and Peter Harris and has traded under the Hotel Chocolat brand since 2003.
The Group sells its products online and through a network of locations in the UK and abroad. The Group has a cacao plantation and eco-hotel in Saint Lucia, offering complete cacao immersion through tree to bar experiences and wellness treatments
The Group also has a flagship restaurant and cacao roastery in London’s Borough Market: Rabot 1745. The Group was admitted to trading on AIM in 2016″