20th Mar 2020 13:43
(Alliance News) - Hotel Chocolat Group PLC said Friday it saw strong demand for its placing, raising GBP2 million more than expected.
The chocolatier said the increased demand came from institutional investors. The company issued a total of 9.8 million shares at 225 pence each, raising GBP22 million.
Shares in Hotel Chocolat were 0.2% lower in London on Friday afternoon at 231.50 pence each.
Earlier Friday, the company said it was hoping to raise GBP20 million via the issue of 8.9 million shares.
The new shares, which represent about 8.5% of the company's issued share capital, will be admitted to London's AIM this Tuesday.
As part of the placing, Co-Founder & Chief Executive Angus Thirlwell and Co-Founder & Development Director Peter Harris both subscribed for 888,888 shares each. Non-Executive Chair Andrew Gerrie acquired 88,888 shares in the placing.
Thirlwell and Harris will both hold a 29.7% interest in Hotel Chocolat on admission of the new shares. Gerrie now holds a 0.4% interest.
Elsewhere, Hotel Chocolat said its trading since March has been hurt by spread of Covid-19, hence the need for the placing.
The chocolatier said its trading, both in the UK and in the US and Japan, had been "encouraging" up to the end of February with revenue having increased by 6% year-on-year in February.
However, in March-to-date Hotel Chocolat said its trading has "inevitably slowed". As a result, retail revenue is down 5% year on year.
"With the increasing possibility that the UK Government will impose further public health measures, the group anticipates the ongoing effect of Covid-19 and the continued reduction in high-street footfall is likely to result in some or all of the company's stores being closed for a period, which will impact company sales and profits. Mother's Day and Easter, two important trading periods for the company, typically contribute about 12% of the group's annual revenue," the company added.
Hotel Chocolat said it has many measures at its disposal, and maintains a "strong" relationship with its lending bank. The company also noted it is taking proactive measures to reduce costs, optimise working capital and preserve cash.
One such measure, is the placing announced Friday.
The company said the proceeds from the placing will be used to shore up its resilience and aid its growth plan.
"The Hotel Chocolat brand is strong and the company's longer-term growth plans and opportunities in the UK, the US and Japan remain unchanged. During these uncertain times the company continues to remain focused on protecting its staff and customers," the company said.
By Paul McGowan; [email protected]
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