Cake Box Holdings (CBOX ) has reported “another strong performance” its half-year results for the six months to 30 September 2021, as revenue and profits rose by 92% and 117%, respectively. In line with its progressive dividend policy to reflect the cash generation and earnings of the Group, it has declared an interim dividend of 2.5p per share, a rise of 35.1% from last year.
The fresh cream cake retailer said the set of results demonstrates “the continued appeal of its offering. Strong trading across the group’s store estate and online delivery channels translated into strong growth across key financial metrics, with revenues up 92% to £16.4m (1H21: £8.6m) and pre-tax profits more than doubling to £3.70m from £1.7m in 1H21.
During the four month period to 30 September 2021, which the Group said excludes the impact of the March 2020 lockdown and associated store closures, revenues were up over 50% at £11.2m (4 months 1H21: £7.4m) while pre-tax profits up 56.7% to £2.6m over the same period. Total franchise sales up 13.3% on a like-for-like* basis to £19.4m, it reported.
Over the period, the company opened 20 new franchise stores in total (excluding kiosk openings), with the total number of stores at 30 September 2021 being 174 (1H20: 139).
The Group said its balance sheet remains strong, ‘underpinned by the highly cash generative nature of its business model’, it said. Cash at period end was £5.6m, 4.3% higher than at the same point last year. Net cash position also increased, by 9.2% to £4.15m (1H21: £3.80m).
The Company said trading momentum has continued during the first five weeks of 1H22, with three new franchise stores opened across various UK locations in London and the Midlands.
The franchise store estate traded well throughout October, with like-for-like sales increasing by 14.4% and online sales continuing to grow strongly, up 46.6% in the five weeks since the end of September versus the same period last year, the Company noted to its shareholders.
Addressing investors, it said: “’The Group’s supply chain remains robust, with several months of ingredients on hand and no disruption to supply to date. With more deposits for new franchise stores held than ever before and 23 new franchise stores already opened during the financial year to date, we are now targeting up to 32 franchise stores openings for FY22.”
Alongside this, the Company highlighted that it has partnered with Asda supermarket and, following the successful trial of 7 kiosks, it has added a further 4 kiosks since 30 September 2021 and has the intention to roll out more kiosks in Asda during the remainder of FY22.
Despite continued uncertainty in the operating environment, Cake Box believes its proposition for customers and new and existing franchisees remains “highly attractive.” The Board said it is confident of making further progress in the second half and meeting full year expectations.
Sukh Chamdal, Chief Executive Officer of the Group said: “Our proven franchisee model continues to deliver and we now plan to open up to 32 new franchise stores this year, helping more entrepreneurs than ever build their own businesses and serve their local communities,
Despite continued uncertainty in the wider environment, it’s clear that our unique customer proposition remains highly attractive as more customers choose our delicious, egg-free cakes to celebrate important occasions or simply satisfy their appetites for a tasty treat.”
View from Vox
Today’s set of results exhibits continued strong trading for Cake Box holdings which last month said it was confident of making further progress over 2H21 and of meeting full year expectations as a result of the company’s strong trading performance reported to date.
In particular, the Company said it has continued to see strong growth from its own online delivery channels via third party platforms including UberEats, Just Eat and Deliveroo, with franchisee online sales increasing 68% to £6.7m during the period from £4.0m in 1H20.
The Company told investors that the appeal of its franchise proposition is reflected in the current pipeline of new potential franchisees, with 62 holding deposits held at period end.
The ongoing trial of kiosks with a major supermarket chain has also expanded, with two new kiosks opened, taking the total number of supermarket kiosks to seven, it told shareholders.
Continuing to refresh its core celebration cake range remains an important element of the Group’s differentiated product offering, the Group outlined, with new launches during the period including the “naked cake” collection, which it said ’customers have ‘responded well to.’
In June, Cake Box said it had delivered on its promise to report a set of “record results” for the full year period ended 31 March 2021 in spite of the UK Government’s lockdown restrictions.
In its results for the year ended 31 March 2021, the Company hailed another period of strong growth which it said at the time had, in turn, created “a bigger, better business.” As a result, and in line with its dividend policy, the Board declared a dividend of 3.7p for the full year.
The cake manufacturer hailed what it described as ‘another period of strong growth in an unprecedented year’ after revenue improved by 16.9% to £21.9m (2020: £18.7m) while the Group saw a 24.8% increase in adjusted profit before tax to £4.7m from £3.8m in FY20.
In line with its ‘progressive’ dividend policy, the Board declared a dividend of 3.7p for FY21.
Back in April 2021, the Company informed investors that it had witnessed ‘a sustained recovery’ in trading since shops reopened after the first UK lockdown in May last year.
Addressing investors in June, the Group said it had ‘not only continued to grow the business over the last twelve months,’ but it has also ‘reinforced the foundations for its future growth.’
Follow News & Updates from Cake Box Holdings here: