Cake Box Holdings  (CBOX ) has reported continued trading momentum after experiencing strong sales growth and record store expansion during the six months to September 2021.

As a result of its strong trading performance reported this morning, the Group said it is confident of making further progress over 2H21 and of meeting full year expectations. 

The UK retailer of fresh cream cakes said customers have continued to respond well to the company’s core Cake Box product proposition and its brand marketing through social media. 

Trading in 1H21 has been strong across Cake Box’s store estate and online delivery channels with total revenues for the period coming to £16.4m, an increase of 91% from £8.6m in 1H20. The Group said its balance sheet remains strong, with net cash of £4.2m at period end. 

The Group reported revenues for the four months to 30 September 2021 at £11.1m compared to £7.4m in the four months of 1H20, a rise of 50% compared to the same four months last year which excludes the impact of the March 2020 lockdown and associated store closures. 

Cake Box said total franchise sales had also increased by 13.3% on a like-for-like basis.  On a four-month basis, franchisee online sales increased by 35% to £4.6m from £3.4m in 1H20.

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.

Over the period, the Group opened 20 new franchise stores in the period (excluding kiosk openings), with the total number of stores at 30 September 2021 being 174 (1H20: 139).

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.

Alongside growth in the franchise store estate, it has continued the roll out of its kiosk offer from existing franchise stores, with a net three new shopping centre kiosks opened in the period, including in the Arndale and Trafford centres in Manchester, taking the total to 19. 

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.’

Sukh Chamdal, Co-founder and Chief Executive Officer, said: “Our performance during the last six months demonstrates the ongoing appeal of our unique cake offering. With strong sales growth accompanied by record expansion of our store estate, the Board is confident of making further progress in the second half and meeting full year expectations.”

He commented, “In light of this ongoing growth, we have continued to invest in our operations, including expanding our IT capabilities, laying the foundations for the next phase of expansion, which is underpinned by a pipeline of 62 holding deposits for new franchise stores.

Describing Cake Box’s supply chain as “robust”, Chamdal concluded: “In light of this ongoing growth, we have continued to invest in our operations, including expanding our IT capabilities, laying the foundations for the next phase of expansion, which is underpinned by a pipeline of 62 holding deposits for new franchise stores. In short, more customers are enjoying our delicious egg-free cakes, and more of our fantastic franchisees are selling it to them.”

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.’

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