CBOX Cake Box Holdings Plc

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:

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