BT Problems, Hotel Chocolat and Multibaggers Report

BT has managed to disable my business “landline” number of 020-8295-0378. Major network problem apparently which won’t be fixed until at least 24/11/2023. Even though this is the line used for my broadband service that is still working so anyone wanting to contact me should use this contact form to get in touch:

Will I be buying shares in BT? Absolutely not when the service is so poor.

Despite my previous recent blog post on the dangers of the attractions of luxury food products (see ) it has not deterred Mars from bidding for Hotel Chocolat (HOTC). They have offered to pay 160% of the previous market price which is a prospective p/e of over 190. This seems a wildly optimistic valuation for a retailer with no consistent record of profits.  

Stockopedia ran a webinar on “multibaggers” which I missed as the timing clashed with my usual dinner time. But they have produced a report on their research of UK stocks which you can obtain from their web site.

I hold two of the top ten winners over the last ten years which have certainly contributed to my portfolio performance and it is well worth reading their report.

We seem to be back in a political mess after Suella Braverman got fired and the Supreme Court rejected the Rwanda plan for migrants. That was always going to be legally and politically difficult without a very firm hand on the tiller which Rishi Sunak seems unable to provide. Moving illegal immigrants to a foreign country was never going to be easy. But Rwanda is surely not the best choice of location. How about St. Helena or Ascension or one of the remote Scottish islands instead?

As regards the bust-up in the Conservative Party as a result, as someone who has some experience of such events in membership organisations my advice to Suella is to act quickly. Removing Sunak would not be easy so best to form a new platform for like-minded right wingers.   

Roger Lawson (Twitter  )

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Hotel Chocolat and Luxury Products

I am writing this while awaiting a phone call from the local hospital to see if they have a bed for me – needed to support a non-critical procedure. They have already cancelled two appointments previously due to lack of a bed which rather shows how the NHS is falling apart and simply does not have enough hospital beds.

To fill in the time I listened to Paul Scott’s latest podcast. He put the boot into Hotel Chocolat (HOTC) and I have to agree with him on it. I avoid all luxury food producers – chocolate, ice cream, wine etc. The words cause investors to salivate and to act irrationally. The word “gold” has a similar impact on some investors. These are “trigger” words that cause a pavlovian response – a subconscious desire to get involved and a sure way to lose money.

I have no opinion on the merits of what Hotel Chocolat sells although Paul said he did not like the taste. But any examination of the past record of the company should be enough to put anyone off investing in it.

Roger Lawson (Twitter  )

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Chocolat Melting, Fevertree Losing Fizz, Paypoint Results and PM Choice

The share price of Hotel Chocolat (HOTC) collapsed yesterday after posting a trading update. It was not that chocolate sales had fallen in the heat wave as one might expect. The temperature nudged 40 degrees C in the leafy Chislehurst suburbs yesterday and I cancelled a trip into the City which was probably a wise move.

HOTC said “While the Board anticipates underlying FY22 profit before tax will be in line with market consensus, statutory reported profit for FY22 is
expected to be a loss, being affected by the outcomes of an internal business review, predominantly as a result of non-cash impairment provisions and costs arising from discontinued activities including the closure of retail stores in the USA”. It’s a loss however you look at it.

The share price of HOTC peaked at about 530p last November and it’s now about 130p. Investors who signed up for the placing at 355p last July must be kicking themselves.

I must admit to a certain scepticism about “comfort” food sellers particularly those targeting the luxury end of the market. The history of chocolate and ice cream sellers is very poor and I would extend that to premium alcohol brands such as gin and wine. Likewise premium mixer seller Fevertree (FEVR) whose shares fell by 30% last Friday after warning on margin erosion due to higher glass and freight costs combined with labour shortages. These kinds of companies depend on aggressive marketing to grow sales but their products and marketing can be imitated. When consumers become price sensitive they may quickly switch to cheaper brands.

Needless to say, I do not hold the stocks mentioned above.

One share I do hold is Paypoint (PAY) who issued a positive trading statement this morning. It included this statement:

“Q1 Progress: Good progress against our ESG programme, including commitment to ensure all employees are paid a minimum of the Real Living Wage delivered in July 2022; and Inaugural Pride Month programme launched in June 2022, as part of our ‘Welcoming Everyone’ activities, providing educational content, further meetings of our LBGTQ+ network and events to bring colleagues together, building on our commitments to diversity, equity and inclusion and supporting our vision to create a dynamic place to work”.

They have clearly become enamoured of the need to support lesbian, gay, bisexual and transgender (LGBT) individuals but I am not personally convinced that this is an area in which companies should be interfering. Next thing we know they’ll be promoting religion and holding prayer meetings.

One of the last three candidates for Prime Minister, Penny Mordaunt, has been criticised for calling that old TV series of “It Ain’t Half Hot Mum” as being misogynistic and homophobic. It certainly was but it was also comic as the characters were true of their era. Likewise in Dad’s Army written by the same authors which could also be criticised for being prejudiced. But as my father served in the Home Guard and kept a diary during the war years, I think it was a good representation of reality. He skived off a lot apparently and considered it a waste of his time.

Will Penny Mordaunt beat Liz Truss to make the final poll? I hope so as I don’t think Truss could win a General Election for the Conservatives. Simply not enough charisma.  I still think Rishi Sunak is the best candidate.

Roger Lawson (Twitter:  )

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