For the first StockSlam of 2019 I took a quick look at Cake Box Holdings (LON:CBOX). Floated in June last year, at 108p, my hope is that this share might take away my unhappy memories Patisserie Valerie! Within two weeks of listing the shares hit their current level and have stayed there ever since - which makes sense given the lack of news-flow.

So Cake Box Holdings (LON:CBOX) are a specialist retailer. They do fresh cream cakes but with a specific twist; everything is egg-free. This is great for certain religions (such as Hinduism), lacto-vegetarians and anyone with an egg allergy. Browsing their website they have a wide range of cakes mainly based on sponge and cream. That’s attractive to a lot of people it appears although this style is not to my taste.

The reason I know that the cakes are popular is that the company started in 2008, with just one store, and has grown quickly to around 101 profitable franchise stores. The key word there is obviously franchise. They don’t own any stores, and they don’t operate any stores either, which reduces both capital costs and roll-out risk. Their aim is to go from 101 stores to 250. With roughly two new stores opening per month they’ve got a fairly long runway ahead and there's plenty of scope to expand outside the South-East (which is why they are opening a new warehouse facility in the north).

Now the half year results came out recently and the company managed 4.35p in earnings along with increased cash and a 1.2p dividend. With unchanged analyst forecasts sitting at 8.1p (less than twice 4.35p) there's a bit of a disconnect here given plans to open at least another 10 stores. Still with Cake Box Holdings (LON:CBOX) trading on a P/E ~20 you'd expect to see growth and perhaps forecasts being beaten.

At the franchise level the brand is doing well with total turnover up 29% to £14.1 million and online sales materially rising 86% to £1.99 million. Of course there are a number of new stores in there and at a like-for-like level sales growth was a much lower 4.4% (down from 9.0% in the…

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