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RNS Number : 7937L Cake Box Holdings PLC 12 November 2024
12 November 2024
Cake Box Holdings plc
("Cake Box", "the Company" or "the Group")
Unaudited Half Year Results for the six months ended 30 September 2024
Increase in revenue, profit and dividend
Confident outlook, with positive trading momentum in franchise store sales,
increasing online sales, and expected to exceed store opening target for the
year
Cake Box Holdings plc, the UK's largest retailer of fresh cream celebration
cakes, today announces its half-year results for the six months ended 30
September 2024.
Financial Highlights
As restated -
Half year ended 30 September 2024 Half year ended 30 September 2023 Change*
Revenue £18.7m £18.0m 4.3%
Gross Profit £10.1m £9.0m 11.5%
EBITDA** £3.5m £3.1m 11.9%
Pre-tax profit £2.8m £2.4m 16.3%
Net cash £5.6m £5.9m (5.4%)
Cash at Bank £6.7m £7.1m (6.2%)
Basic earnings per share 5.18p 4.45p 16.4%
Interim dividend 3.40p 2.90p 17.2%
*Change % is calculated on the figures included in consolidated statement of
comprehensive income and consolidated statement of financial position
**EBITDA is calculated as operating profit before depreciation and
amortisation
· Group revenue up 4.3% to £18.7m (H1 FY24: £18.0m), driven by:
o Increased volumes from 20 stores opened in the prior year
o Seven new stores opened in the six months to 30 September 2024
· Positive trading momentum in franchise store sales, with
like-for-like* sales growth of 2.0% for the half-year, against strong
comparatives of 6.2% growth in the same period last year
· Gross margins increased to 53.8% (H1 FY24: 50.3%) due to:
o Continued efficiencies in production processes
o The change to accounting for the national marketing levy income in revenue
and marketing expenses in administrative expenses which was implemented in
August 2023
· Continued balance sheet strength with net cash of £5.6m (H1 FY24:
£5.9m), after the £0.7m purchase of land for the expansion of the Bradford
depot
· Interim dividend up 17.2% to 3.4p per share, reflecting the Group's
continued strong cash generation and the confidence in its growth prospects
Operational Highlights
· Franchise stores in operation increased to 232 as at 30 September
2024 (30 September 2023: 214)
· Seven new franchise stores added in the period (H1 FY24: nine new
franchise stores), entering new locations such as Crewe, Greenwich and
Lichfield
· Marketing initiatives delivering an increase in customers and
heightening brand awareness:
o Customer loyalty programme 'Cake Club' launched
o 2.2m website visits for the half, up 40% year on year
o Subscription database increased 40% to 517k since beginning of year
o SMS database grew to 269k, a 48% increase from the start of the year
o Online sales increased 16.6% year on year, with 120k new customers online
o Online sales accounted for 22.9% (H1 FY24: 21.3%) of franchise store sales
o Brand awareness increased by 8 percentage points to 48% year on year
· Continued innovation for growth through new product development
o Collaboration with Nutella to develop and launch five exclusive new
branded products
o Launched Lemony Layers collection
o 50 new product designs including new kids' cake collection
· Further £0.4m investment in the Cake Box Hub, the Company's
integrated IT platforms
· Effectively managing cost pressures, particularly through established
supplier relationships
Franchise Store Highlights
· Franchise store sales up 8.1% to £39.0m (H1 FY24: £36.1m)
· Franchise total sales including kiosks up 7.6% to £41.5m (H1 FY24:
£38.5m)
· Franchisee online sales increased 16.6% to £9.0m (H1 FY24: £7.7m)
· Number of multi-site franchisees increased to 47 (H1 FY24: 46)
Current Trading and Outlook
· Trading has continued positively since the half year end, with total
franchise sales 9.9% ahead in October 2024 and like-for-like sales up 4.0%,
compared with the same period in the prior year
· Seven new franchise stores opened since the period end taking the
total to 14 stores to date in the current financial year (10 by the same date
in FY24); confident in opening in excess of 25 new franchise stores by the
year end
· Online sales in October 2024 have increased 23.0% versus the prior
year, and accounted for 23.9% of franchise store sales (October 2023: 21.5%)
· On track to deliver a full year performance in line with market
expectations
*Like-for-like: Stores trading for at least one full financial year prior to
30 September 2024
Sukh Chamdal, Chief Executive Officer, commented:
"During the first half of the year, we delivered strong growth across key
financial metrics and expanded our customer base, resulting in double digit
increases in profits and dividends. We have seen continued growth in online
sales as well as brand awareness. Importantly, we increased our customer
database by 40% and launched our customer loyalty programme in the period.
"Our store opening programme is gaining traction, with fourteen new franchise
stores opening in the year to date, compared to ten by the same date last
year. This has been achieved in collaboration with our external property
consultants, and this success gives us confidence in exceeding the store
opening target set for the year.
"We enter the second half with ongoing positive trading momentum and are on
track to deliver full year performance in line with market expectations. The
Board remains confident in the Company's long-term prospects, and we are
making strategic progress in building a larger and more profitable business
for our shareholders, franchise partners and colleagues."
Investor presentation
Cake Box will provide a live presentation relating to the Company's results
via the Investor Meet Company platform on Thursday, 14 November 2024 at 17.00
GMT. The presentation is open to all existing and potential shareholders and
registration can be completed via the following link:
https://www.investormeetcompany.com/cake-box-holdings-plc/register-investor
(https://www.investormeetcompany.com/cake-box-holdings-plc/register-investor)
For further information, please contact:
Cake Box Holdings plc
+44 (0) 20 4582 3500
Sukh Chamdal, CEO
Michael Botha, CFO
Shore Capital (Broker and
NOMAD)
+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
Operational and Financial Review
Robust first half performance
Trading momentum picked up during the first half, with challenging market
conditions being experienced across the retail sector. Group revenue growth of
4.3% and an increase in total franchise store sales of 8.1%, reflects the
continued customer demand for the Company's products. Franchise store
like-for-like sales were up 2.0% in the first half against a strong
comparative period (H1 FY24: up 6.2%) and compared to 2.6% in H2 FY24.
In June 2024, Cake Box launched a new loyalty programme, Cake Club, with the
opportunity for customers to get a free cupcake when signing up to the
programme. Since launching, 63,000 customers have signed up. Further purchases
unlock offers or discounts as the customers progress through the programme.
During the period, the Company completed the planned investment in its
marketing team, bringing graphic design and PPC ("Pay-Per-Click") in-house.
The website is delivering a consistent increase in online sales month on
month, with a 16.6% increase in franchise sales year on year and accounted for
22.9% (H1 FY24: 21.3%) of all franchise store sales.
The first half was extremely busy for new product development, which included
an exclusive collaboration with Nutella and the launch of five new products as
part of Nutella's 60(th) birthday celebrations. In addition, the Company
launched its Lemony Layers collection as well as 50 new product designs,
including a new kids' collection.
Continued strategic progress with marketing initiatives
During August 2023, Cake Box created a £2m co-funded annual national
marketing fund with the franchisees to drive brand awareness, broaden the
customer base and evolve the brand. A large proportion of the fund is
allocated to digital and social media marketing, and Cake Box made good
progress with its brand awareness further strengthening from 40% to 48% year
on year.
With customer data central to the Company's marketing strategy, Cake Box
experienced further strong growth with its marketing database growing by 40%
to 517k and SMS subscriptions increasing 48% to 269k, since the start of the
year.
H1 FY25 saw an increase of 40% in traffic to the website, driven mainly by
clicks from Google and Meta (Facebook and Instagram). The Company's conversion
rate remains industry leading and a 14% increase in conversions has resulted
in the increase in online sales year on year.
Expansion of the franchise store estate
Despite borrowing costs remaining at elevated levels, Cake Box franchisees
continue to open new stores, with a further seven stores opened during the
period. As a result, the total number of stores at 30 September 2024 rose to
232 (H1 FY24: 214). 47 of the Company's 98 franchisees are multi-store
franchisees, operating a total of 181 stores out of the total 232 stores.
Since H1 FY24 the Company has been engaging with its property consultants to
identify new attractive target locations for Cake Box franchisees to enhance
their growth.
New locations added in the period include Crewe, Greenwich and Lichfield,
where the Company identified compelling growth opportunities and anticipate
strong customer demand.
Gross margin improvement
Gross margin increased to 53.8% (H1 FY24: 50.3%), for the period.
The national marketing levy revenue is included in the total revenue within
the profit and loss; however, the national marketing expenses are included in
administration expenses. The underlying gross margin excluding the national
marketing levy revenue, was 52.4% (H1 FY24: 50.0%) for the period.
Input costs were, overall, stable throughout the half, with improvements in
fuel and utility costs benefiting both franchisees and the Group's
profitability. These cost impacts, together with efficiency improvements in
production processes, increased underlying gross margin to 52.4% and profit
before tax by 16.3%.
Cake Box reviews its pricing strategy regularly and remains mindful to limit
the increasing of prices to the franchisees and likewise to their customers,
to maintain the Company's value proposition during the continued
cost-of-living challenges.
Investment for growth opportunities
As stated in the FY24 results, Cake Box identified an opportunity to purchase
the land adjacent to its Bradford depot, in order to support new store growth
in the north of England and Scotland. During H1 FY25, Cake Box completed the
purchase of the land at a cost of £0.7m.
During the half, Cake Box also focused on enhancing its IT and e-commerce
capabilities to capitalise on its significant growth opportunities, with a
total capex spend of £0.4m.
In addition, a further £0.5m was spent on capex for the depots during the
period.
Balance Sheet and cashflow
The highly cash generative nature of the Company's business model has ensured
that the balance sheet remains strong, with cash at period end of £6.7m (H1
FY24: £7.1m), which is post paying a final dividend of £2.4m in August 2024
and the purchase of the land in Bradford. The Group's net cash position was
£5.6m (H1 FY24: £5.9m).
Dividend
The Group's progressive dividend policy reflects its cash generation, earnings
progression and confidence in the Company's outlook. In line with this, Cake
Box is declaring an interim dividend of 3.4 pence per share representing an
increase of 17.2% from last year. The interim dividend will be paid on 12
December 2024 to those shareholders on the register at the close of business
on 22 November 2024. The ex-dividend date is therefore 21 November 2024.
Board update
Adam Batty, Senior Independent Director, will step down from the Board
following the interim results. The Board would like to thank Adam for his
invaluable insights and commercial guidance that he has brought to the Board
since IPO.
Alison Green will step down from the Board at the end of the calendar year.
Alison has had a huge impact in her role as Chair of the ESG Committee, as
well as contributing to the growth within the marketing and online strategy of
the Group.
The Board has initiated a process to recruit replacements for both Adam Batty
and Alison Green.
Outlook
Cake Box continues to invest in the business, driving brand awareness and
online sales growth. Trading momentum has continued into H2 2025, with total
franchise sales 9.9% ahead in October 2024.
The Company's new store rollout programme is gaining momentum with 14 stores
opened as at the date of the interim results' announcement, compared with 10
for the same period in the prior year, and management is confident of opening
in excess of 25 stores for the full financial year.
The Company's ongoing new product development and the continued rollout of its
new brand identity will ensure a broadening appeal and awareness of the Cake
Box brand.
Whilst it is still a challenging retail environment, the Group remains on
track to deliver full year results in line with market expectations and is
confident in its long-term prospects, as strategic progress continues to be
made in building a larger and more profitable business for the Company's
shareholders, franchise partners and colleagues.
CAKE BOX HOLDINGS PLC
UNAUDITED CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME FOR THE SIX MONTHS
ENDED 30 SEPTEMBER 2024
6 months to As restated - 6 months to 12 months to
30 September
30 September
31 March
2024
2023
2024
(unaudited)
(unaudited)
(audited)
Note £ £ £
Revenue 2 18,734,746 17,960,580 37,844,963
Cost of sales (8,656,803) (8,923,454) (17,905,058)
Gross profit 10,077,943 9,037,126 19,939,905
Administrative expenses before exceptional items (7,267,596) (6,578,552) (13,947,694)
Impairment of receivables - writeback - - 187,856
Exceptional items - - 243,100
Administrative expenses (7,267,596) (6,578,552) (13,516,738)
Operating profit 2,810,347 2,458,574 6,423,167
Finance income 105,356 44,130 153,145
Finance expense (129,395) (107,593) (310,885)
Profit before income tax 2,786,308 2,395,111 6,265,427
Income tax expense (714,510) (615,344) (1,606,742)
Profit after income tax 2,071,798 1,779,767 4,658,685
Other comprehensive income for the period
Items that will not subsequently be classified to profit or loss:
- Revaluation of freehold property - - 223,178
- Deferred tax on revaluation of freehold property - - (55,795)
Total other comprehensive income for the period - - 167,383
Total comprehensive income for the period 2,071,798 1,779,767 4,826,068
Earnings per share - pence
Basic 5 5.18 4.45 11.65
Diluted 5 5.04 4.45 11.44
CAKE BOX HOLDINGS PLC
UNAUDITED CONSOLIDATED STATEMENT OF FINANCIAL POSITION AS AT 30 SEPTEMBER 2024
6 months to As restated - 6 months to 12 months to
30 September
30 September
31 March
2024
2023
2024
(unaudited)
(unaudited)
(audited)
Note £ £ £
Assets
Non-current assets
Intangible assets 1,074,451 480,924 727,783
Property, plant and equipment 12,220,280 11,095,006 11,480,193
Right-of-use assets 2,124,580 2,424,520 2,274,550
Other financial assets 615,563 562,931 564,535
16,034,874 14,563,381 15,047,061
Current assets
Inventories 2,681,393 2,426,905 2,592,838
Trade and other receivables 3,506,332 2,188,484 4,154,184
Other financial assets 760,818 364,412 487,652
Cash and cash equivalents 6,696,417 7,135,660 8,454,265
13,644,960 12,115,461 15,688,939
Total Assets 29,679,834 26,678,842 30,736,000
Equity and liabilities
Equity
Issued share capital 4 400,000 400,000 400,000
Capital redemption reserve 40 40 40
Share option reserve 172,829 - 95,266
Revaluation reserve 3,617,038 3,449,655 3,617,038
Retained earnings 14,820,143 13,469,427 15,188,345
Equity attributable to the owners of the parent company 19,010,050 17,319,122 19,300,689
Current liabilities
Trade and other payables 3,907,739 3,116,419 4,892,228
Lease liabilities 285,724 275,224 280,425
Short-term borrowings 180,019 96,295 146,544
Current tax payable 1,364,190 401,736 948,523
Provisions - 243,100 -
5,737,672 4,132,774 6,267,720
Non-current liabilities
Lease liabilities 2,005,214 2,290,940 2,149,413
Borrowings 888,134 1,092,082 997,050
Deferred tax liabilities 2,038,764 1,843,924 2,021,128
4,932,112 5,226,946 5,167,591
Total Equity & Liabilities 29,679,834 26,678,842 30,736,000
CAKE BOX HOLDINGS PLC
UNAUDITED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY FOR THE SIX MONTHS ENDED
30 SEPTEMBER 2024
Share Capital Share option reserve As restated - revaluation As restated - retained Total
capital
redemption
reserve
earnings
reserve
£ £ £ £ £ £
At 1 April 2023 400,000 40 - 3,449,655 13,889,660 17,739,355
Total comprehensive income for the period - - - - 1,779,767 1,779,767
Transactions with the owners in their capacity as owners
Dividends paid - - - - (2,200,000) (2,200,000)
At 30 September 2023 400,000 40 - 3,449,655 13,469,427 17,319,122
Profit for the period - - - - 2,878,918 2,878,918
Revaluation of freehold property - - - 223,178 - 223,178
Deferred tax on revaluation of freehold property - - - (55,795) - (55,795)
Total comprehensive income for the period - - - 167,383 2,878,918 3,046,301
Transactions with the owners in their capacity as owners
Share-based payments - - 93,445 - - 93,445
Deferred tax on share-based payments - - 1,821 - - 1,821
Dividends paid - - - - (1,160,000) (1,160,000)
At 31 March 2024 400,000 40 95,266 3,617,038 15,188,345 19,300,689
Total comprehensive income for the period - - - - 2,071,798 2,071,798
Transactions with the owners in their capacity as owners
Share-based payments - - 59,927 - - 59,927
Deferred tax on share-based payments - - 17,636 - - 17,636
Dividends paid - - - - (2,440,000) (2,440,000)
At 29 September 2024 400,000 40 172,829 3,617,038 14,820,143 19,010,050
CAKE BOX HOLDINGS PLC
UNAUDITED CONSOLIDATED CASH FLOW STATEMENT FOR THE SIX MONTHS ENDED 30
SEPTEMBER 2024
6 months to 6 months to 12 months to
30 September
30 September
31 March
2024
2023
2024
(unaudited)
(unaudited)
(audited)
£ £ £
Cash flows from operating activities
Profit before income tax 2,786,308 2,395,111 6,265,427
Adjusted for:
Depreciation of property, plant, and equipment 447,691 421,366 856,282
Depreciation of right-of-use assets 149,970 149,970 299,940
Amortisation of intangible assets 42,361 53,504 106,810
(Profit)/loss on disposal of tangible fixed assets (1,150) - 13,606
Share-based payment expense 77,566 - 93,445
Finance income (105,356) (44,130) (153,145)
Finance expense 129,395 107,593 310,885
(Increase)/decrease in inventories (88,555) 363,819 197,886
Decrease/(increase) in trade and other receivables 647,852 495,137 (1,470,563)
Increase in other financial assets (324,195) (172,932) (297,775)
(Decrease)/increase in trade and other payables (984,489) (649,993) 1,125,815
Decrease in provisions - - (243,100)
Cash generated from operations 2,777,398 3,119,445 7,105,513
Taxation paid (281,208) (507,876) (829,251)
Net cash inflow from operating activities 2,496,190 2,611,569 6,276,262
Cash flows from investing activities
Proceeds from sale of property, plant and equipment 1,150 - 51,620
Purchase of property, plant and equipment (501,413) (383,825) (892,226)
Purchase of assets under construction (686,365) - -
Additions to intangible assets (389,029) - (453,920)
Finance income 105,356 44,130 153,145
Net cash outflow from investing activities (1,470,301) (339,695) (1,141,381)
Cash flows from financing activities
Repayment of finance leases (138,900) (133,792) (270,118)
Repayment of borrowings (75,442) (48,412) (93,196)
Dividends paid (2,440,000) (2,200,000) (3,360,000)
Finance expense (129,395) (107,593) (310,885)
Net cash outflow from financing activities (2,783,737) (2,489,797) (4,034,199)
Net (decrease)/increase in cash and cash equivalents (1,757,848) (217,923) 1,100,682
Cash and cash equivalents brought forward 8,454,265 7,353,583 7,353,583
Cash and cash equivalents carried forward 6,696,417 7,135,660 8,454,265
CAKE BOX HOLDINGS PLC
NOTES TO THE INTERIM ACCOUNTS
FOR THE SIX MONTHS ENDED 30 SEPTEMBER 2024
1.Notes to the Interim Report
Basis of preparation
The consolidated half-yearly financial statements do not constitute statutory
accounts within the meaning of Section 434 of the Companies Act 2006. The
statutory accounts for the year ended 31 March 2024 have been filed with the
Registrar of Companies at Companies House. The auditor's report on the
statutory accounts for the year ended 31 March 2024 was unqualified, did not
include any matters to which the auditor drew attention by way of emphasis and
did not contain any statements under Section 498 (2) or (3) of the Companies
Act 2006.
The published financial statements for the year ended 31 March 2024 were
prepared in accordance with UK adopted International Financial Reporting
Standards ("UK adopted IFRS").
The consolidated annual financial statements of Cake Box Holdings Plc for the
year ended 31 March 2025 will also be prepared in accordance with UK adopted
IFRS. Accordingly, these interim financial statements have been prepared using
accounting policies consistent with those which will be adopted by the Group
in the financial statements for the year ended 31 March 2025, but do not
contain all the information necessary for full compliance with UK adopted
IFRS.
The consolidated interim financial statements for the six months to 30
September 2024 have not been audited.
Going concern
The consolidated interim financial statements have been prepared under the
going concern assumption and historical cost convention as modified by fair
value for property, plant and equipment.
This is considered appropriate, given the financial resources of the Group
including the current position of £6.7m of cash and cash equivalents,
together with long term contracts with its franchisees and long-standing
relationships with its key suppliers.
The Directors of the Group have performed an assessment of the overall
position and future forecasts (including the 12-month period from the date of
this report) for the purpose of going concern. The overall Group has seen a
pleasing performance in the first half of the financial year.
Basis of consolidation
The Group consolidated interim financial statements consolidates the company
and its subsidiaries. All intra-group transactions, balances, income and
expenses are eliminated on consolidation.
CAKE BOX HOLDINGS PLC
NOTES TO THE INTERIM ACCOUNTS
FOR THE SIX MONTHS ENDED 30 SEPTEMBER 2024
Changes to comparative period financial information
The following changes have been made to the comparative period presented
within these financial statements:
· National Marketing Levy expenses were reclassified from 'Cost of
sales' to 'Administrative expenses before exceptional items. This resulted in
a reduction of 'Cost of sales' of £124,520 and an increase in 'Administrative
expenses before exceptional items' of £124,520. There is no impact on the net
profit before income tax, net cash flows or basic and diluted earnings per
share for the period.
· Tax rate changes on revaluation of property, plant and equipment have
been recognised separately under 'Other comprehensive income for the year', as
required by IAS 12 'Income Taxes'. This has resulted in a restatement of the
Consolidated Statement of Comprehensive Income. The Consolidated Statement of
Changes in Equity was also restated to reclassify £337,088 from retained
earnings to the revaluation reserve. There is no impact on net cash flows or
basic and diluted earnings per share for the period.
The above changes were reported in the Company's 2024 Annual Report and
Accounts.
2.Segment reporting
Components reported to the chief operating decision maker, the board of
directors, are not separately identifiable. The Group makes varied sales to
its customers, but none are a separately identifiable component. The following
information is disclosed:
6 months to 6 months to 12 months to
30 September
30 September
31 March
2024
2023
2024
(unaudited)
(unaudited)
(audited)
£ £ £
Sales of sponge 7,495,650 7,385,751 14,983,166
Sales of other food 3,357,468 3,151,169 6,700,487
Sales of fresh cream 2,049,968 2,083,960 4,082,584
Sales of other goods 3,790,335 3,700,104 7,824,308
Online sales commission 585,760 546,021 1,100,711
Franchise packages 912,713 969,055 2,484,043
National marketing Levy 542,852 124,520 669,664
18,734,746 17,960,580 37,844,963
CAKE BOX HOLDINGS PLC
NOTES TO THE INTERIM ACCOUNTS
FOR THE SIX MONTHS ENDED 30 SEPTEMBER 2024
3.Dividends
6 months to 6 months to 12 months to
30 September
30 September
31 March
2024
2023
2024
(unaudited)
(unaudited)
(audited)
£ £ £
Dividends paid 2,440,000 2,200,000 3,360,000
4.Share Capital
6 months to 6 months to 12 months to
30 September
30 September
31 March
2024
2023
2024
(unaudited)
(unaudited)
(audited)
£ £ £
40,000,000 Ordinary Shares of £0.01 400,000 400,000 400,000
5.Earnings per share
The basic earnings per share is calculated by dividing the earnings
attributable to equity shareholders by the weighted average number of shares
in issue. In calculating the diluted earnings per share, share options
outstanding have been taken into account where the impact of these is
dilutive.
6 months to 6 months to 12 months to
30 September
30 September
31 March
2024
2023
2024
(unaudited)
(unaudited)
(audited)
Pence Pence Pence
Basic earnings per share 5.18 4.45 11.65
Diluted earnings per share 5.04 4.45 11.44
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