Cake Box bucks challenging environment: ‘There are still countless moments to celebrate’
Cake Box is a UK producer of individually-crafted and customised egg-free cream cakes, growing from its first concept store opened in East London in 2008 to a franchise estate of 185 stores by the end of 2021, with 15 supermarket kiosks and another 20 in shopping malls.
For the 52 weeks ending 31 March 2022, gross profit was up 45% to £15.8m, while revenue rose 50.7% to £33m, from $21.9m a year earlier. Pre-tax profits grew by 83.3% to £7.7m, compared to £4.2m for fiscal 2021. The baker also improved its cash position to £6.6m from £5.1m.
The London-listed company accredited the healthy growth to the addition of 31 new franchise stores around the UK, along with a 41% rise in online sales. A new warehouse was also opened in Enfield in December to support ongoing expansion.
It raised its final dividend to 5.1p from 3.7p, lifting the total payout for the year to 7.6p from 5.55p the year before, however, the Board “remains mindful of an increasingly challenging economic and trading environment”.
Proven resilience and commitment
Added CEO Sukh Chamdal, “These are difficult times for everyone, but as we’ve seen before, the Group’s unique customer and franchisee proposition remains both exciting and enticing.
“Despite a challenging economic and trading environment, we have delivered yet another strong set of results and continue to trade robustly post period end.
“Our people have proven their resilience and commitment through tough times and now is the time for the Cake Box Family of extraordinary entrepreneurs to shine, with support from a bigger, better and more experienced group function.”
He added, “As I said at the height of the Covid pandemic, there will still be birthdays, marriages and countless moments in our lives to celebrate with a slice of our delicious cake.”
In a statement, the company said it will continue to invest in further store openings, marketing and digital capabilities. Additionally, it said it will invest in senior leadership to improve governance and processes to support a larger franchise estate.
Walid Koudmani, chief market analyst at financial brokerage XTB, told BakeryandSnacks, “Cake Box Holdings plc posted strong results and robust current trading as the company remains confident of further progress.
“While it continues to increase its geographic presence with a strong store opening programme to drive future growth, it remains cautious as the overall economic situation continues to be troubling with high inflation and supply issues presenting potential threats.”