Cake Box Holdi. Regulatory News (CBOX)

12 April 2021

Cake Box Holdings plc

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

Full Year Trading Update

Strong recovery in trading sustained through H2

Cake Box Holdings plc, the specialist retailer of fresh cream cakes, today announces a trading update for the full year period ended 31 March 2021 ("FY21").

Another period of strong growth in an unprecedented year

Despite the ongoing impact of the Government's lockdown restrictions throughout the year, the Group delivered a strong performance, with a sustained recovery in trading as shops began to reopen after the first UK lockdown in May last year. In the 40 weeks from 1 June 2020 to 7 March 2021*, like-for-like sales in franchise stores grew by 14.7%.

As a result, the Company expects to report record revenue for the year up c.16% compared to the same period last year with adjusted profit before tax in line with market expectations.

Continued growth in the Group's store estate

The Group delivered a very strong opening programme in the second half, opening 17 new stores including Gloucester, Epsom, Newport, Ipswich and Hove, as UK store footprint expansion continued. Overall, there were 24 store openings during the year, taking the total number of franchise stores in the Cake Box estate to 157 at the period end.

The Group's pipeline of new stores remains very strong, with the Group currently holding franchisee deposits for 52 sites across the country. The Group is also trialling five Cake Box kiosks with a national supermarket chain and the results so far have been very encouraging.

Ongoing progress on strategic initiatives

The Group also continued to make progress on several strategic initiatives over the period. This included accelerating its delivery capabilities through the launch of its own-brand delivery platform, with pleasing early results. This complements existing Click & Collect and third-party delivery offerings. There was further very substantial growth in the number of orders which were made online during the year. Online sales were up 84% year on year.

Following investment to support the Group's continued expansion, operations at Cake Box's new bakery and distribution centre in Coventry commenced in March this year, complementing existing facilities in Enfield and Bradford.

Continuing to refresh our core celebration cake range to reflect the latest trends remains the bedrock of the Group's differentiated offer and during the year we introduced exciting new launches such as an egg free custard to complement products such as our new packaged loaf cakes. We also developed further gluten free and vegan product options for our customers during the year. 

Strong balance sheet

The Group's balance sheet remains strong, underpinned by the highly cash generative nature of the Company's business model. Net cash at period end was c.£3.6m (FY20: £2.1m), up 70% on the prior year.

Reflecting the Board's confidence in the strength of the balance sheet, the Group reinstated its interim dividend at the half year in November, as well as declaring a special dividend on 1 September 2020, having repaid all government monies received for the furloughing of Group level employees who were unable to work as a result of the immediate impact of COVID-19. The Group has taken no further Government support in the second half.

Notice of results

The Group expects to report its results for the year ended 31 March 2021 in June 2021 and will confirm the date in due course.

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

"I am very pleased with the strong trading momentum in the second half, continuing the recovery we saw as our shops began to reopen from May last year. Customer appetite for our products has continued to grow, with good traction across our expanded online and delivery services.

Our tested recipe of backing our franchisees has helped us deliver another year of growth, and it is thanks to the dedication of them and everyone in the Cake Box family that we have been able to emerge stronger from a year marked by the global pandemic.

Our franchisees are job creators with the genuine entrepreneurial spirit that will be needed to accelerate our economic recovery as a nation out of lockdown. We welcomed 15 new franchisees into the Cake Box family as part of the 24 new stores opened during the year.

Despite continued uncertainty in the operating environment, our unique proposition for customers and new and existing franchisees remains highly attractive and we are confident of making continued progress in the years ahead."

*Post-7th March 2020 business performance significantly impacted by UK lockdown as shops shut, which skewed LFL 2021 comparisons. In the period1 June 2020 to 31 March 2021* like-for-like sales in franchise stores grew by 19.7%. LFL calculated from stores trading for a full year.

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