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Cake Box expects to report record revenue for FY21 following strong recovery

10:45, 12th April 2021
Francesca Morgan
Vox Newswire
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Cake Box Holdings (CBOX FOLLOW) said it has delivered “a strong performance” for the full year period ended 31 March 2021 in spite of the UK Government's lockdown restrictions.

The Company, which operates as a specialist retailer of fresh cream cakes, released a FY21 trading update this morning in which it stated that the business had witnessed ‘a sustained recovery’ in trading as shops began to reopen after the first UK lockdown in May last year.

Cake Box said like-for-like sales across its franchise stores had grown by 14.7% during the 40 week period from 1 June 2020 to 7 March 2021 while the company welcomed 15 new franchisees into the Cake Box family as part of the 24 new stores opened during the year.

The Group said it now expects to report record revenue for the year up c.16% compared to the same period last year with adjusted profit before tax in line with market expectations.

It said its balance sheet ‘remains strong, underpinned by the highly cash generative nature of its business model’ with net cash at period end at c.£3.6m, up 70% from £2.1m in FY20.

As a result of the Board’s confidence in its balance sheet, the Group reinstated its interim dividend at the half year in November and declared a special dividend on 1 September 2020.
It added that it has taken no further Government support throughout its second half.

Cake Box cited a ‘very strong opening programme’ in 1H21, with 17 new stores opening in several new locations as the company moved to expand its UK store footprint further.

Overall, the Company highlighted that there were 24 store openings during the year, taking the total number of franchise stores in the Cake Box estate to 157 at the period end.

Shares in Cake Box Holdings have increased by over 20% in value since the beginning of 2021. The stock was trading 1.57% higher this morning at 258p following its trading update.

CBOX price chart

Cake Box said its pipeline of new stores remains ‘very strong’, with it currently holding franchisee deposits for 52 sites across the UK. The Group is also trialling five Cake Box kiosks with a national supermarket chain and the results so far have been ‘very encouraging.’

Cake Box said it also continued to make progress on several strategic initiatives over the period including accelerating its delivery capabilities through the launch of its own-brand delivery platform. The company said it has already seen ‘pleasing early results’ from this.

The Group said there was also further ‘very substantial growth’ in the number of orders which were made online during the year with online sales increasing by 84% year-on-year.

"I am very pleased with the strong trading momentum in the second half, continuing the recovery we saw as our shops began to reopen from May last year. Customer appetite for our products has continued to grow, with good traction across our expanded online and delivery services,” commented Sukh Chamdal, Co-founder and Chief Executive of Cake Box.

He added, “Our tested recipe of backing our franchisees has helped us deliver another year of growth, and it is thanks to the dedication of them and everyone in the Cake Box family that we have been able to emerge stronger from a year marked by the global pandemic.

Despite continued uncertainty in the operating environment, our unique proposition for customers and new and existing franchisees remains highly attractive and we are confident of making continued progress in the years ahead."

The Group expects to report its results for the year ended 31 March 2021 in June 2021.

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