REG - Cake Box Holdings - Trading Update

Cake Box HoldingsAnnouncement

31/08/2022 07:00

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RNS Number : 6685X  Cake Box Holdings PLC  31 August 2022

THIS ANNOUNCEMENT CONTAINS INSIDE INFORMATION FOR THE PURPOSES OF ARTICLE 7 OF
THE MARKET ABUSE REGULATION (596/2014/EU) AS THE SAME HAS BEEN RETAINED IN UK
LAW AS AMENDED BY THE MARKET ABUSE (AMENDMENT) (EU EXIT) REGULATIONS (SI
2019/310) ("UK MAR").

31 August 2022

 

Cake Box Holdings plc

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

 

Trading Update

 

Cake Box Holdings plc, the specialist retailer of fresh cream cakes, announces
an update on current trading and outlook.

 

In the Group's Full Year Results on 27 June 2022, it noted that while current
trading was robust against a very strong comparative trading period in H1
2022, the Board remained mindful of an increasingly challenging economic and
trading environment.

 

Since then, the trading environment has become significantly more challenging.
Inflationary cost pressures across the Group have increased above levels
previously anticipated and the Board does not see these easing before the end
of the financial year. While the Group has passed some of the cost increases
onto franchisees with a recent price increase, the full year gross margin will
be impacted. We remain mindful of significant inflationary pressures on our
franchisees and customers across the country.

 

In addition, the Group has seen weaker than anticipated sales at the franchise
level during July and August which has resulted in franchisee Like for Like*
sales declining 2.8% in the first half to date. The Group believes the summer
performance has been exacerbated by the recent heatwave which has impacted
store footfall.

 

Accordingly, due to the worsening outlook and increasing cost of living
pressures on the consumer, the Group now expects full year profitability to be
significantly below current market forecasts.

 

The Group is taking proactive action to mitigate the impact of increased input
and administrative costs and to protect levels of profitability, including
implementing supply price increases. The Group continues to have a strong
balance sheet and had cash as at close of business on 30 August 2022 of
£6.7m, prior to paying the proposed dividend of £2.0m in September.

 

Cake Box continues to increase its geographic presence, with a strong pipeline
of potential new franchisees and deposits for sites.

 

Looking further ahead, the Board remains confident in the Cake Box's future
growth prospects, underpinned by the increased investment in professionalising
the Group's functions and the pipeline of new store openings across the
country, with levels of franchisee deposits remaining at good levels.

 

For further information, please contact:

 

 Cake Box Holdings plc  Enquiries via MHP Communications

 Sukh Chamdal, CEO

 David Forth, CFO

 Shore Capital          +44 (0) 20 7408 4090

 Stephane Auton

 Patrick Castle

 MHP Communications     +44 (0) 20 3128 8570

 Simon Hockridge        cakebox@mhpc.com

 Pete Lambie

 *Like-for-like: Stores trading for at least twelve months prior to 28 August
2022.

 

The person responsible for arranging for the release of this announcement on
behalf of Cake Box is David Forth, Interim CFO.

 

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