TIDMCBOX
RNS Number : 2240G
Cake Box Holdings PLC
14 November 2022
Cake Box Holdings plc
("Cake Box", "the Company" or "the Group")
Unaudited Half Year Results for the six months ended 30
September 2022
Revenue growth against strong comparative period, continued
investment in infrastructure whilst maintaining a
strong cash position
Cake Box Holdings plc, the specialist retailer of fresh cream
cakes, today announces its half year results for the six months
ended 30 September 2022.
Sukh Chamdal, Chief Executive Officer, commented
"Although revenue increased, trading in the first half of the
period was against a very strong comparative period last year, and
was impacted by exceptionally hot weather which went on for a far
longer period than normal. In addition, higher levels of
international travel in July and August, were coupled with the
rising cost of living and inflation. Once the summer holiday period
finished, we began to see a recovery in our sales, alongside the
continued growth of our franchise store estate.
Encouragingly, the improvement in trading seen towards the end
of the half year has continued into October. Whilst the Board
remains cautious in light of the uncertain economic climate and the
unpredictability in consumer spending, the Group's current trading
is on track to achieve full year market expectations.
Longer term, the Board is confident in Cake Box's significant
potential, underpinned by its attractive customer and franchisee
proposition and bolstered by ongoing investment in the Group's
functions and capabilities, and a strengthened leadership
team."
Financial Highlights
Half year Half year Change(1)
ended ended
30 September 30 September
2022 2021
------------- ----------
Revenue GBP16.8m GBP16.5m 2.1%
------------- ------------- ----------
Gross profit GBP8.0m GBP7.6m 5.5%
------------- ------------- ----------
EBITDA* GBP2.8m GBP4.1m (32.4%)
------------- ------------- ----------
Pre-tax profit GBP2.0m GBP3.7m (45.1%)
------------- ------------- ----------
Net cash GBP4.2m GBP4.1m 1.2%
------------- ------------- ----------
Cash at Bank GBP5.5m GBP5.6m (2.0%)
------------- ------------- ----------
Earnings per share 3.72p 7.46p (50.0%)
------------- ------------- ----------
Interim dividend 2.625p 2.5p 5.0%
------------- ------------- ----------
(1) 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 revenues up 2.1% to GBP16.8m (H1 FY22: GBP16.5m)
o Sustained recovery in trading towards the end of the period
against a very strong comparative, with like-for-like(1) sales
growth of 3.6% in September
-- Gross margins increased to 47.7% (H1 FY22: 46.2%) despite input cost increases
-- Reduction in EBITDA and pre-tax profit, reflects the
previously reported challenging trading environment in H1, cost
pressures and increased investment in the business
-- Continued balance sheet strength with net cash increasing to GBP4.2m (H1 FY22: GBP4.1m)
-- Interim dividend up 5% at 2.625p reflecting the Group's
progressive dividend policy and continued cash generation despite
continued investment in infrastructure to underpin future
growth
Operational highlights
-- 196 franchise stores in operation at 30 September 2022 (30 September 2021: 174)
-- 11 new franchise stores added in the period (H1 FY22: 20 new franchise stores)
-- Significant investment in production and distribution assets to improve efficiency
-- Managing cost pressures, particularly though established supplier relationships
Franchise store highlights
-- Like-for-like sales slight decline of 1.1% in the period
against very strong comparative period
-- Franchisee store sales in the period, up 7.9% to GBP31.8m (H1 FY22: GBP29.5m)
-- Franchisee total sales including kiosks in the period up 9.9% to GBP34.7m (H1 FY22 GBP31.6m)
-- Despite the lifting of lockdown last year, Franchisee online
sales have been maintained at GBP6.7m (H1 FY22: GBP6.7m)
-- Number of kiosks at 30 September 2022 is 33, with an increase
in the number of supermarket kiosks to 20 (H1 FY22: 7 supermarket
kiosks and 15 supermarket kiosks at 31 March 2022)
-- Number of multi-site franchisees has increased to 43 (H1 FY22: 40)
Current trading and outlook
-- Trading has improved post summer, with franchise sales up
like-for-like 4.6% and online sales increasing 6.8% in October
versus last year
-- Whilst macro-economic challenges continue and consumer
spending is likely to remain unpredictable, the Group's current
trading is on track to achieve full year market expectations
-- Three new stores have opened since the period end, with a
strong pipeline for future openings (44 deposits held at period
end)
-- Further supermarket kiosk openings being negotiated
(1) Like-for-like: Stores trading for at least one full
financial year prior to 30 September 2022
There will be a virtual presentation for analysts and
institutional investors this morning at 9.30am. For details, please
contact cakebox@mhpc.com .
For further information, please contact:
Cake Box Holdings plc Enquiries via MHP Communications
Sukh Chamdal, CEO
Martin Blair, Acting CFO
Shore Capital (Broker and NOMAD)
Stephane Auton
Patrick Castle
Rachel Goldstein
Fiona Conroy - Corporate Broking +44 (0) 20 7408 4090
Liberum (Joint Broker)
Clayton Bush
Edward Thomas +44 (0) 20 3100 2000
MHP Communications (Financial PR)
Simon Hockridge
Pete Lambie +44 (0) 20 3128 8570
Operational Review
Results overview
Last financial year was an exceptionally strong year for Cake
Box with many retailers shut because of the Covid-19 pandemic.
However, we were permitted to open and as a result trading was
strong, both in stores and online. Against this good performance,
we started the year with challenging comparatives; during the first
few months we were trading at or slightly below last year on a
like-for-like basis. We continued to open new stores and trading
was starting to improve in June. However, July and August were
exceptionally hot and sunny and, as we have found in the past, this
is not particularly conducive to cake sales. Sentiment around the
cost of living, inflation and utilities price rises also weighed on
the consumer. In addition, many customers took advantage of the
relaxation in travel restrictions to take holidays they had been
planning for the last two years, which also contributed to lower
sales. We were, however, encouraged to see our customers returning
in September with like-for-like franchisee sales up 3.6%.
Reflecting the wider inflationary environment, we have
inevitably seen significant increases in our raw material costs,
namely cake mix and fresh cream. We have absorbed some of these
costs, however, we have had to pass some of these onto our
franchisees and have made considered increases to our retail
prices, whilst ensuring the value proposition that Cake Box is
known for, remains. Customers have been accepting of these
increases, in line with the wider sector, and are still returning
to enjoy our cakes, albeit we keep our pricing strategy continually
under review.
Under the tough consumer-spending conditions it is encouraging
to see an increase in overall revenues to GBP16.8m from GBP16.5m
for the equivalent period last year and that we have achieved a
small increase in gross margin.
Continued investment for growth
We have continued investing for future growth in the business.
We had already enhanced our management team, bringing in a new
Chief Operating Officer and a Marketing Director, as well as
bolstering the production and food hygiene teams. In the last six
months, we have made a significant investment in our Enfield bakery
by bringing in new state-of-the-art production facilities for
cheesecakes, whilst also making other improvements to provide a
better environment for our baking and production staff . This
investment is reflected in the significantly higher admin costs in
the period of GBP5.9m compared to GBP3.9m last year.
We are also continuing to look at ways to improve our baking
process to reduce waste and the cost of ingredients. We have
invested in our delivery van fleet, replacing older vans, and
adding more refrigerated vehicles to reflect increased demand.
Planned van replacement last year was delayed into this year due to
unavailability of new vehicles in the market.
Online Sales and new website
Online sales were flat compared to H1 FY22 due to much stronger
trading conditions in the same period last year in the aftermath of
Covid. During H2, we are investing in digital advertising, and this
is now increasing online sales month by month. We expect this to
accelerate with a new website which is planned to launch next
month. The new site will give the customer a better user experience
and in doing so, increase conversion rate and customer loyalty. The
site will be data driven and automated to deliver bespoke marketing
campaigns to increase customer lifetime value.
Franchisees and new stores
We now have 96 franchisees with 43 of them owning more than one
store and between them managing 147 sites (out of the total 196
stores). Where we know franchisees are performing well, we are
actively encouraging them to take on additional sites so as to
harness their entrepreneurial skills.
The Group opened 11 new franchise stores in the period
(excluding kiosk openings), with the total number of stores at 30
September 2022 being 196 (H1 FY22: 174). New locations added in the
period include St. Neots, Gateshead, Nottingham, and Norwood
(London).
The appeal of the Group's franchise proposition is reflected in
the continuing strength of our pipeline of new potential
franchisees, with 44 deposits held at period end. Of these 44
deposits, 20 are from existing franchisees.
Balance Sheet and cashflow
The Group's balance sheet remains strong, underpinned by the
highly cash generative nature of our business model. Cash at period
end was GBP5.5m, down only 2% from the same point last year,
despite making significant investments in production and
distribution facilities and paying a higher dividend. The Group's
net cash position increased, by 1.2% to GBP4.2m (H1 FY22:
GBP4.1m).
Dividends
In line with our progressive dividend policy to reflect the cash
generation and earnings of the Group, today we are declaring an
interim dividend of 2.625 pence per share representing an increase
of 5.0% from last year.
The interim dividend will be paid on 9th December 2022 to those
shareholders on the register at the close of business on 18th
November 2022. The ex-dividend date is therefore 17th November
2022.
Outlook
The improvement in trading towards the end of H1 has continued
into H2 with October like-for-like franchisee sales up 4.6%.and
total franchisee sales in the six weeks to 6 November 2022 up
12.9%.
The Group's franchise store estate has continued to grow, with
three new stores opened since the period end and a further 11
expected to open in the second half.
While the Board remains cognisant of the current economic
climate and the unpredictability in consumer spending, the Group's
current trading is on track to achieve full year market
expectations .
Longer term, the Board is confident in Cake Box's significant
potential, underpinned by its attractive customer and franchisee
proposition and bolstered by ongoing investment in the Group's
functions and capabilities, and a stronger leadership team.
CAKE BOX HOLDINGS PLC
UNAUDITED CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
FOR THE SIX MONTHSED 30 SEPTEMBER 2022
6 months 6 months 12 months
to 30 September to 30 September to 31 March
2022 2021 2022
(unaudited) (unaudited) (audited)
Note GBP GBP GBP
Revenue 2 16,822,209 16,471,577 32,964,846
Cost of sales (8,791,924) (8,863,477) (17,133,685)
----------------- ----------------- -------------
Gross profit 8,030,285 7,608,100 15,831,161
Administrative expenses (5,933,111) (3,889,519) (8,012,448)
Operating profit 2,097,174 3,718,581 7,818,713
Net finance costs (67,128) (19,202) (81,388)
----------------- ----------------- -------------
Profit before income tax 2,030,046 3,699,379 7,737,325
Income tax expense (541,563) (717,333) (1,425,709)
----------------- ----------------- -------------
PROFIT AFTER INCOME TAX 1,488,483 2,982,046 6,311,616
OTHER COMPREHENSIVE INCOME
FOR THE PERIOD
Items that will not be reclassified
to profit and loss, net of
tax
Revaluation of freehold property - - 1,250,175
Deferred tax on revaluation
of freehold property - - (237,533)
----------------- ----------------- -------------
TOTAL COMPREHENSIVE INCOME
FOR THE PERIOD 1,488,483 2,982,046 7,324,258
================= ================= =============
EARNINGS PER SHARE
Basic 4 3.72p 7.46p 15.78p
Diluted 4 3.72p 7.46p 15.78p
CAKE BOX HOLDINGS PLC
UNAUDITED CONSOLIDATED STATEMENT OF FINANCIAL POSITION
AS AT 30 SEPTEMBER 2022
30 September 30 September 31 March
2021
2022 (unaudited) 2022
(unaudited) (audited)
Note GBP GBP GBP
ASSETS
Non-current assets
Property, plant and equipment 10,750,275 8.707,374 10,029,209
Right-of-use assets 2,724,460 - 2,874,430
Other financial assets 595,314 564,194 710,059
Deferred tax asset - 95,447 -
-------------- ------------- -----------
14,070,049 9,367,015 13,613,698
-------------- ------------- -----------
Current assets
Inventories 2,577,643 2,111,194 2,468,921
Trade and other receivables 2,962,332 2,861,845 2,553,209
Other financial assets 252,488 237,994 357,548
Cash and cash equivalents 5,464,364 5,565,501 6,571,558
11,256,827 10,776,534 11,951,236
-------------- ------------- -----------
TOTAL ASSETS 25,326,876 20,143,549 25,564,934
============== ============= ===========
EQUITY AND LIABILITIES
Share capital and reserves
Issued share capital 4 400,000 400,000 400,000
Capital redemption reserve 40 40 40
Revaluation reserve 3,616,383 2,622,092 3,634,734
Share option reserve - 488,596 -
Retained earnings 11,941,865 10,145,461 12,475,031
-------------- ------------- -----------
TOTAL EQUITY 15,958,288 13,656,189 16,509,805
-------------- ------------- -----------
Current liabilities
Trade and other payables 2,996,742 3,313,081 2,661,372
Lease liabilities 213,963 - 260,191
Short-term borrowings 167,754 167,754 167,754
Current tax payable 749,834 740,415 837,946
Provisions 243,100 243,100 243,100
-------------- ------------- -----------
4,371,393 4,464,350 4,170,363
Non-current liabilities
Lease liabilities 2,617,568 - 2,699,958
Borrowings 1,101,223 1,252,336 1,185,978
Deferred tax liabilities 1,278,404 770,674 998,830
-------------- ------------- -----------
4,997,195 2,023,010 4,884,766
TOTAL LIABILITES 9,368,588 6,487,360 9,055,129
-------------- ------------- -----------
TOTAL EQUITY & LIABILITIES 25,326,876 20,143,549 25,564,934
============== ============= ===========
.
CAKE BOX HOLDINGS PLC
UNAUDITED CO NS OLIDATED S TAT E M ENT OF CHANGES IN EQUITY
FO R THE SIX M ONTHSED 30 SEPTEMBER 2022
Share Capital Share Revaluation Retained Total
capital redemption option reserve earnings
reserve reserve
GBP GBP GBP GBP GBP GBP
B a la n c e at 1 April
2 0 21 400,000 40 488,596 1,609,592 8,643,415 11,141,643
T o ta l c omp r e h
e nsi ve income - - - - 2,982,046 2,982,046
Dividends paid - - - - (1,480,000) (1,480,000)
B a la n c e at 30 September
2 021 (as previously
stated) 400,000 40 488,596 1,609,592 10,145,461 12,643,689
-------- ----------- --------- ----------- ----------- -----------
Revaluation of freehold
property (1) 1,250,000 1,250,000
Deferred tax on revaluation
of freehold properties
(1) (237,500) (237,500)
-------- ----------- --------- ----------- ----------- -----------
Restated b a la n c
e at 30 September 2 021
(as restated) 400,000 40 488,596 2,622,092 10,145,461 13,656,189
-------- ----------- --------- ----------- ----------- -----------
T o ta l c omp r e h
e nsi ve income - - - - 3,329,570 3,329,570
Share based payments - - (486,368) - - (486,368)
Deferred tax on share
based payments - - (2,228) - - (2,228)
Revaluation of freehold
property - - - 1,250,175 - 1,250,175
Deferred tax on revaluation
of freehold properties - - - (237,533) - (237,533)
Dividends paid - - - - (1,000,000) (1,000,000)
-------- ----------- --------- ----------- ----------- -----------
B a la n c e at 31 March
2 0 22 400,000 40 - 3,634,734 12,475,031 16,509,805
-------- ----------- --------- ----------- ----------- -----------
T o ta l c omp r e h
e nsi ve income - - - - 1,488,483 1,488,483
Dividends paid - - - - (2,040,000) (2,040,000)
Transfer of excess depreciation
on revalued assets - - - (18,351) 18,351 -
B a la n c e at 30 September
2 022 400,000 40 - 3,616,383 11,941,865 15,958,288
======== =========== ========= =========== =========== ===========
(1) During the year to 31 March 2022 it was discovered that an
uplift to value of freehold properties was not properly reflected
in the financial statements in the prior year. This was reflected
in the financial statements to 31 March 2022
CAKE BOX HOLDINGS PLC
UNAUDITED CONSOLIDATED CASH FLOW STATEMENT
FOR THE SIX MONTHSED 30 SEPTEMBER 2022
6 months to 6 months to 12 months
to
30 September 30 September 31 March
2022 2021 2022
(unaudited) (unaudited) (audited)
GBP GBP GBP
Cash from operating activities:
Profit before income tax 2,030,046 3,699,379 7,737,325
Adjusted for:
Depreciation 546,344 425,833 853,633
Amortisation of right-of-use
assets 149,970 - 124,975
Profit on disposal of tangible
fixed assets (34,204) (13,515) (13,154)
(Increase) in inventories (108,722) (209,023) (566,749)
(Increase) in trade and other
receivables (409,123) (371,630) (82,993)
(Increase) in other financial
assets 219,804 236,626 (28,794)
Increase / (decrease) in trade
and other payables 335,371 (283,886) (915,596)
Share based payment provision - - (486,368)
Finance income (6,711) (1,021) (1,802)
Finance costs 73,839 20,223 83,190
--------------- -------------- --------------
Cash generated by operations 2,796,614 3,502,986 6,703,667
Taxation paid (350,100) (880,387) (1,407,391)
Net cash inflow
from operating
activities 2,446,514 2,622,599 5,296,276
--------------- -------------- --------------
Cash flows from investing activities
Proceeds from sale of property,
plant and equipment 34,204 16,375 16,014
Purchase of property, plant
and equipment (1,267,412) (634,466) (1,133,926)
Interest received 6,711 1,021 1,802
Net cash flows
used in
investing
activities (1,226,497) (617,070) (1,116,110)
--------------- -------------- --------------
Cash flows from financing activities:
Repayment of finance leases (128,618) - (39,255)
Repayment of borrowings (84,754) (65,669) (132,027)
Dividends paid (2,040,000) (1,480,000) (2,480,000)
Interest paid (73,839) (20,223) (83,190)
--------------- -------------- --------------
Net cash flows used in financing
activities (2,327,211) (1,565,892) (2,734,472)
Net increase in cash and cash
equivalents (1,107,194) 439,637 1,445,694
Cash and cash equivalents brought
forward 6,571,558 5,125,864 5,125,864
--------------- -------------- --------------
Cash and cash equivalents carried
forward 5,464,364 5,565,501 6,571,558
=============== ============== ==============
For the purposes of the cash flow statement, cash and cash
equivalents comprise the following:
Cash at bank and in hand 5,464,364 5,565,501 6,571,558
========== ========== ==========
CAKE BOX HOLDINGS PLC
NOTES TO THE INTERIM ACCOUNTS
FOR THE SIX MONTHS ENDED 30 SEPTEMBER 2022
1. Notes to the Interim Report
B a s is of preparation
T h e co ns olidated half-yearly fin a ncial state men t s do n
ot con stit ute s tatuto ry accou n ts wit h in t he meaning of
Section 434 of t he C o m p a nies Act 2006. T he statuto ry accou
nts f or t he year en ded 31 March 2022 have been filed with t he
Regis t rar of Co m panies at C o m panies Hou se. T he au ditor's
report on t he statuto ry accou n ts f or the year en ded 31 March
2022 was u n q ualified, did not include any matters to which the
auditor drew attention by way of emphasis and did n ot co ntain a
ny state men ts un der Section 498 (2) or ( 3) of the C o m panies
Act 2006.
The published financial statements for the year ended 31 March
2022 were prepared in accordance with the recognition and
measurement principles of UK adopted International Financial
Reporting Standards ("UK adopted IFRS") that are expected to be
applied in the preparation of the next annual report.
T h e co ns olidated annual fin a ncial state men t s of Cake
Box Holdings Plc f or the year en ded 31 March 2023 w ill be prepar
ed in accordance w ith I F RS. Accordin g l y, these inter im f i
nan cial state ments h a ve been prepared us i ng accou nti ng
policies con siste nt with t h o se w hich will be adopted by t he
Gro up in t he f i nancial statements for the year ended 31 March
2023, but do not contain all the information necessary for full
compliance with IFRS.
The co ns olidated half-yearly fin a ncial state men t s for the
six months to 30 September 2022 have not been audited or reviewed
by auditors, pursuant to the Auditing Practices Board guidance on
Review of Interim Financial Information.
The consolidated half-yearly financial statements have been
prepared under the going concern assumption and historical cost
convention as modified by fair value for property, plant and
equipment.
B a s is of cons olidation
The Group consolidated half-yearly financial statements
consolidates the company and its subsidiaries. All intra-group
transactions, balances, income and expenses are eliminated on
consolidation.
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 6 months to 12 months to
to
30 September 30 September 31 March
2022
(unaudited) 2021 2022
(unaudited) (audited)
GBP GBP GBP
Sales of sponge 6,170,612 5,991,526 12,301,051
Sales of food 2,930,966 2,717,955 5,479,076
Sales of fresh cream 1,761,069 1,707,951 3,442,619
Sales of other goods 3,686,104 3,309,034 7,023,665
Online sales commission 487,168 453,379 937,640
Franchise packages 1,786,290 2,291,732 3,780,795
16,822,209 16,471,577 32,964,846
--------------- ------------- ------------
CAKE BOX HOLDINGS PLC
NOTES TO THE INTERIM ACCOUNTS (cont'd)
FOR THE SIX MONTHS ENDED 30 SEPTEMBER 2022
3. Dividends
6 months 6 months 12 months
to 30 September to 30 September to 31 March
2022 2021 2022
(unaudited) (unaudited) (audited)
GBP GBP GBP
Dividends paid 2,040,000 1,480,000 2,480,000
================= ================= ===================
4. Share Capital
6 months 6 months 12 months
to 30 September to 30 September to 31 March
2022 2021 2022
(unaudited) (unaudited) (audited)
GBP GBP GBP
40,000,000 Ordinary Shares
of GBP0.01 each 400,000 400,000 400,000
================= ================= ===================
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 6 months 12 months
to 30 September to 30 September to
2022 2021 31 March
2022
(unaudited) (unaudited) (audited)
GBP GBP GBP
Basic earnings per share 3.72p 7.46p 15.78p
Diluted earnings per share 3.72p 7.46p 15.78p
================= ================= ===================
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