REG - Cake Box Holdings - Full Year Trading Update

Cake Box HoldingsAnnouncement

08/04/2024 07:00

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RNS Number : 5890J  Cake Box Holdings PLC  08 April 2024

 

This announcement contains inside information for the purposes of Article 7 of
Regulation (EU) No 596/2014 which is part of UK law by virtue of
the European Union (Withdrawal) Act 2018.

 

8 April 2024

 

Cake Box Holdings plc

("Cake Box" or the "Company" or the "Group")

 

Full Year Trading Update

 

Strong growth across the business resulting in full year profits slightly
ahead of market expectations

 

Cake Box Holdings plc, UK's largest retailer of fresh cream celebration cakes,
is pleased to provide a trading update for the 12-month period ended 31 March
2024.

 

Further growth in H2 to deliver year-on-year increase in revenues and profits

 

As announced in the interim results, Cake Box entered the second half with
increasing momentum as the Group continued to deliver on its stated strategy.
This momentum continued for the rest of the year with further new store
openings, positive sales growth from the enhanced marketing campaigns, higher
online sales including the increasingly popular "click and collect" feature
and new innovative products being launched. As a result, the Group expects to
report revenues for the year up c9.0% year on year (FY 2023: £34.8m).

 

The Group continues to balance cost control whilst investing in its growth
areas. We have benefited from the continued stabilisation in the cost of raw
materials during the year and have seen further efficiency benefits from
previous investment in the business. Consequently, this combined with the
increase in revenues means the Group expects to report adjusted profits
slightly ahead of market expectations.

 

The Group's brand awareness, customer experience and loyalty are growing
strongly with the success of its enhanced marketing strategy and capability.
Cake Box launched a new CRM system, e-commerce website, and a brand identity
refresh in the second half of the year.  Nine stores now carry the new
branding, which has been well received by customers. Cake Box's marketing
effectiveness has also increased with a focus on digital performance
marketing, facilitated by the co-funded national advertising fund recently
established with the Group's franchisees. These initiatives are helping to
deliver an improved customer experience, higher retention and the continuous
attraction of new customers to the Cake Box brand.

 

As a result of the continuing challenging economic climate facing UK
consumers, the Group's pricing strategy continues to be kept under regular
review to ensure that the demand for Cake Box's offering remains high.

 

Franchisee stores continue to perform well with like-for-like* sales expected
to show an increase year-on-year of c4.4%.

 

Continued growth in store estate

 

The demand for new stores remains strong among the Group's existing franchisee
base as well as new enquiries from prospective franchisees. The engagement
with external property consultants, appointed to develop a strategy for Cake
Box to reach its 400-store long term target, has progressed well and target
areas for new stores have been identified.

 

During the year, the Group added 20 new stores in line with its roll out
plan (H2 2024: 11), thereby increasing the total number of Cake Box stores
across the estate to 225 (FY 2023: 205).

 

Improving balance sheet

 

The Group's balance sheet strengthened further, with a significant increase in
the Group's net cash position, which stood at £7.3m at the period end (FY
2023: £6.3m).

 

The Company will provide further detailed information in its full year results
announcement which is expected in June 2024.

 

 

Sukh Chamdal, Co-founder and Chief Executive Officer, said:

 

"We are delighted to have delivered a year of solid growth in all our key
performance areas and full year profits slightly above expectations despite
the backdrop of uncertain macroeconomic conditions. We expect to report an
increase in all key financial metrics, an uptick in sales of products online
including our 'click and collect' offer as well as in-store sales and an
increased number of franchise stores. We are very pleased with the feedback
from the launch of the new Cake Box brand identity from our customers, which
will continue to bring new customers to experience our wonderful products.

 

I am confident that with our strengthened senior management team and
investment in our operations and processes, as well as our dedicated and
determined franchisees, we will continue to grow the Cake Box customer base
and brand."

 

 

 

For further information, please contact:

 

 Cake Box Holdings plc              At +44 (0) 20 4582 3500 on the day and thereafter

 Sukh Chamdal, CEO

 Michael Botha, CFO

 Shore Capital                      +44 (0) 20 7408 4090

 Stephane Auton

 Patrick Castle

 Rachel Goldstein

 Fiona Conroy - Corporate Broking

 Gracechurch Group                  +44 (0) 20 4582 3500

 Harry Chathli                      cakebox@gracechurchpr.com

 Alexis Gore

 *Like-for-like: Stores trading for at least one full financial year prior to
31 March 2023.

 

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