It was a "sweet" day for investors in London, says City AM. Luxury chocolate maker Hotel Chocolat has raised £55m in an initial public offering (IPO), with its shares jumping by nearly a third on its first day of trading.The deal was timed to fit into the "chocolate calendar", says co-founder Angus Thirlwell coming just after Easter, but leaving a few months to prepare for Christmas.
The UK chocolate market is massive, estimated at $6.4bn, but investors have been starved of chocolate stocks. Thorntons was bought last year by Italy's Ferrero Rocher, while Cadbury was swallowed by Kraft in 2010. Hotel Chocolat already outsells Thorntons, with more than 80 shops in the UK, but keeps its products off supermarket shelves, to preserve their cachet.
The business, however, has been through several different incarnations. It began as a mail order company, before opening its first shop in London in 2004. It has also traded under several different names, including Geneva Chocolates and Choc Express, a telltale sign that it operates in a faddish market, vulnerable to fast-changing tastes. Many of its hit products, including an Eton Mess slab and salted caramel vodka, also have a whiff of "here today" about them.That need not matter, providing Thirlwell has his finger on the pulse. He's branded himself as a hippy, rebuffing private-equity interest and citing David Bowie as an inspiration. "More cocoa, less sugar" is a policy of the firm, which has also issued "chocolate bonds", yielding 7.3% (paid in chocolate bars), to retail investors.
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Looking beyond his shoulder-length hair, Thirlwell is in fact deeply commercial. The bonds raised £6.9m. Thirlwell and co-founder Peter Harris have pocketed £43m from the IPO, while holding onto two-thirds of the stock. Hotel Chocolat runs a hotel on its plantation in St Lucia, popular with Cabinet ministers, but it's no vanity project, selling two-week breaks for £10,000. Thirlwell's father, meanwhile, was the brains behind Mr Whippy, a mass-market ice cream made of emulsifiers and pig fat.
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