Luxury chocolate maker Hotel Chocolat Group PLC (LON:HOTC) shares gained as it reported full-year results that were slightly ahead of its expectations.
In the year to July 1, pre-tax profit increased 13% to £12.7mln from £11.2mln last year as strong cost control led to improved margins.
Revenue grew 11% to £116.3mln from £105.2mln, support by its store expansion programme. The company opened 15 new stores in the UK and the Republic of Ireland during the period, contributing 6% to group sales.
Hotel Chocolat also has 30 combined shop and café stores now open to lure in customers.
The dividend for the year was raised to 1.7p from 1.6p last year.
In the new financial year, the company has launched three new international ventures, including franchise development agreements in Scandinavia and Japan along with a lease to open a new store in New York.
READ: Hotel Chocolat hands over Denmark stores to Retail Brands, signs development deal
"We are increasingly confident that international expansion presents a growth opportunity, and will be adopting a cautious 'test, learn, grow' approach to our new partnership in Scandinavia and our new ventures in the US and Japan, where we intend to open our first stores this winter,” said Angus Thirlwell, co-founder and chief executive.
The group said it remains well positioned for the future with a strong pipeline of opportunities despite the challenges and uncertainties in the wider economy. Trading since the end of the full year is in line with management’s expectations.
Shares were up 3.2% to 348.5p in morning trading.
Liberum maintained a 'buy' rating on the stock, saying the results were 4.5% ahead of expectations.
"The bigger news is the announcement of global expansion into the US and Japan following on recently from the development agreement for Scandinavia," the broker said.
"Hotel Chocolat's affordable luxury, 'more cocoa, less sugar' offer and broad, unique ranges position it well to disrupt the incumbents in new markets.
"Vertical integration underpins a c.16% EBITDA margin which supports a competitive advantage in a material price advantage over competitors. A growing number of catalysts exist to support future growth."