• Mark Watson-Mitchell

Hotel Chocolat (LON:HOTC) - we have had a very good turn so far

The shares of this iconic retailer and chocolatier might look frothy to some after the latest update news.

An 11% rise in sales for the 13 weeks to 29 December was impressive and driven by its in-home ‘Velvetiser’ ‘barista-grade’ hot chocolate machines selling very well.

It opened 14 new locations in the last six months, nine in the UK, two in the US and three in Japan.

The group is expanding globally and that is going to cost both working capital and drag margins somewhat.

Also, it appears that there are certain inefficiencies in the supply chain that are being attended to, that will cost.

So, is it time to establish profits, perhaps looking to come back in again at cheaper levels?

Readers who followed the Profile comment will have already had the chance to take some substantial profits earlier this month as the shares hit 527p, giving an over 50% hike since last March.

Brokers Peel Hunt retain their Buy rating aiming at 400p a share, while Liberum Capital suggest that the shares, now 394p, are a Hold looking for 440p.

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