TIDMCBOX
RNS Number : 5595D
Cake Box Holdings PLC
30 June 2021
30 June 2021
Cake Box Holdings plc
("Cake Box", "the Company" or "the Group")
Full Year Results for the twelve months ended 31 March 2021
Another period of strong growth in an unprecedented year
Full year Full year Change
ended ended
31-Mar-21 31-Mar-20
---------- ----------
Revenue GBP21.9m GBP18.7m 16.9%
---------- ---------- -------
Gross profit GBP10.9m GBP8.8m 23.8%
---------- ---------- -------
EBITDA* GBP4.9m GBP4.3m 14.6%
---------- ---------- -------
Pre-tax profit GBP4.2m GBP3.8m 11.8%
---------- ---------- -------
Adjusted Pre-tax profit** GBP4.7m GBP3.8m 24.8%
---------- ---------- -------
Cash at Bank GBP5.1m GBP3.7m 37.8%
---------- ---------- -------
Earnings per share 8.4p 7.8p 7.7%
---------- ---------- -------
Adjusted Earnings per
share** 9.6p 7.8p 23.1%
---------- ---------- -------
Final dividend declared 3.7p 0.0p -
---------- ---------- -------
*EBITDA is calculated as operating profit before
depreciation
** Calculated after adjusting for provision for GDPR breach of
GBP486k
Financial highlights
-- Another period of strong growth in an unprecedented year
-- Group revenue up 16.9% to GBP21.9m (2020: GBP18.7m)
-- Gross margin improved to 49.7% (2020: 46.7%)
-- Cash from operations of GBP5.2m (2020: GBP3.4m)
-- Strong balance sheet with GBP5.1m cash at period end (2020: GBP3.7m)
-- Dividend per share for the full year: 3.7 pence per share
(Interim dividend of 1.85 pence per share)
Operational highlights
-- 84% growth in online sales for the comparable period
-- Launch of own delivery platform to complement third party
delivery and click and collect offerings
-- 24 new franchise stores added in the year (2020: 20)
-- 157 franchise stores in operation as at 31 March 2021 (2020: 133)
-- Successful ongoing trial of five kiosks with a national
supermarket chain and four new shopping centre kiosks, taking total
number of kiosks to 21 (2020: 12)
-- New product launches including egg-free custard, and further vegan and gluten-free options
-- Commenced operations at new bakery and distribution centre in Coventry in April 2021
-- Exceptional provision of GBP486k made for fines and related
costs following a website data breach in 2020; customer remedial
action taken alongside significant steps to improve security
Franchisee store highlights
-- Franchisee total turnover up by 17% to GBP42.7m (2020: GBP36.5m)
-- Franchisee online sales up 71% to GBP9.4m (2020: GBP5.5m)
-- Like-for-like(1) sales growth of 14.7% in franchise stores
(2020: 5.1%) in the 40 week comparable period from 1(st) June 2020
to 7(th) March 2021(3)
Current trading(2) and outlook
-- Trading has remained strong post-period end
-- Nine new franchise stores opened in the first quarter of FY22
-- Targeting 18-24 new franchise store openings in FY22
underpinned by record number of deposits from prospective
franchisees
-- One supermarket kiosk opened post period end, six new sites
confirmed following successful initial trial.
-- Business opportunities for new and existing franchisees remains highly attractive
-- Confident of making continued progress in the years ahead
(1) Like-for-like: Stores trading for at least one full
financial year prior to 31 March 2021
(2) Current trading defined as average store turnover for last
12 weeks to week ended 27 June 2021
(3) Trading effected by COVID from mid-March to end of June
2020
Sukh Chamdal, Chief Executive Officer, commented:
"Looking back to what we've achieved over the last twelve
months, I am both incredibly proud of the Cake Box Family and
optimistic for the future. We have achieved record results during a
year which included a global pandemic and the temporary closure of
our entire store estate. We have ultimately emerged a bigger,
better business.
Trading has remained strong post-period end with nine new
franchise stores opened in the first quarter.
We have a record number of holding deposits for new franchise
stores wanting to start and grow their own businesses. This
underpins our confidence in meeting our ongoing target of 18-24
franchise store openings for FY22.
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.
In June 2020, amidst the onset of the pandemic, I wrote that
"there will still be birthdays, marriages and numerous other
occasions, large and small, to celebrate up and down the country"
and our performance this year has clearly shown this to be the case
As we cautiously emerge from the pandemic, I am thrilled that more
customers than ever will be celebrating reunions with friends,
family and colleagues over a slice of our delicious, egg-free
cake."
For further information, please contact:
Cake Box Holdings plc
Sukh Chamdal, CEO +44 (0) 20 8050
Pardip Dass, CFO 2026
Shore Capital
Stephane Auton +44 (0) 20 7408
Patrick Castle 4090
MHP Communications +44 (0) 20 3128
Oliver Hughes 8540
Simon Hockridge cakebox@mhpc.com
Charlie Barker
Pete Lambie
Chairman's Statement
It has been an extraordinary year for the Cake Box Family and
the country as a whole. There have been tough challenges for
everyone, both within the business and personally. What has struck
me most is the resilience, determination and compassion, which has
allowed us to continue serving customers whilst looking out for one
another.
Results
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.
I want to thank our customers for their ongoing support through
this extraordinary year and our staff and franchisees for their
enormous commitment and effort.
For the year as a whole, Cake Box delivered a 16.9% increase in
revenues, and a 24.8% increase in adjusted profit before tax. To
have achieved these figures during an ordinary year would have been
an achievement, but to deliver them during an undoubtedly
extraordinary year we have had is a result that gives me immense
pride in the whole Cake Box Family.
Website data breach
A malware attack occurred in 2020 which impacted our website
payment system and resulted in a website data breach. We have
contacted any customers whose personal information was potentially
exposed during the attack and provide them with support where
required. We have also informed the relevant authorities.
We take the security of our customers' personal information
extremely seriously and took appropriate action to secure the
website. We set up a dedicated team, available to impacted
customers by email, to provide help including a complimentary fraud
protection service and would like to apologise to customers for any
inconvenience this attack may have caused.
Our franchise platform
The platform founded by our entrepreneurial management team over
ten years ago has facilitated these record results, delivering for
all of our stakeholders and gives us a simple recipe for future
growth.
We have a franchisee proposition that supports entrepreneurship
and job creation across the UK, often in underserved communities.
Most of all we are delighted that we continue to attract many
female franchisees.
We have a unique and attractive customer proposition, which we
have made more accessible through strategic initiatives including
our kiosk trials, third party delivery platforms and, more
recently, our own online delivery channel.
We have an investment proposition which offers shareholders
access to the attractive growth and returns we generate through our
proven, capital light, cash generative franchise model.
Cake Box continues to serve our communities, whether that be
through the donations of over 100,000 cakes to key workers during
the pandemic, or simply through making sure that birthdays up and
down the country can still be celebrated with a delicious slice of
cake.
The Cake Box Family
At its core this business is a collection of extraordinary
entrepreneurs, united by the Cake Box brand. These results are not
just testament to the strength, resilience and adaptability of the
franchise platform, but to our franchisees and committed staff
across the UK, who have continued to serve and support their
communities through a global health crisis. On behalf of the Board,
I would like to thank them for their enthusiasm, dedication and
perseverance.
The Cake Box Family has continued to grow throughout the last
year, with the Group reaching the landmark achievement of opening
our 150(th) franchise store in Romford, Essex in February, as part
of the 24 new stores opened during the year.
To open a small business for the first time during a pandemic is
no mean feat, and I would like to welcome all our new franchisees
to the Cake Box Family - from Hove to Sunderland. We have also had
existing franchisees continue to expand their businesses during the
last year, and I would like to commend them for their tenacity.
These new store openings have allowed us to create more than 200
new roles, including 25 at our new and existing warehouse and
bakery sites.
Whilst there is much rhetoric (from financial institutions) of
supporting small businesses across the UK economy, some of our
franchisees have encountered significant challenges in obtaining
financing from our usual banking relationship to open their stores.
Therefore, we took the important decision to support several of
these individuals who weren't able to secure a commercial loan
during COVID-19, with a Franchisee Support Fund. The Franchisee
Support Fund has been put in place whilst COVID-19 affects the
availability of commercial loans to franchisees and matches the
terms of commercial loans that have historically been available
through the banks, some of which have been withdrawn during COVID
19 These loans typically amount to a GBP50k contribution to new
franchise store start-up costs and to date, Cake Box has loaned
c.GBP890k to 16 franchisees. The Board has set a limit of GBP1.5m
that can be provided in aggregate as loans to franchisees through
the Franchisee Support Fund. The expectation is that conditions
normalise, commercial loans will become readily available again to
new franchisees and we are in discussions to widen our banking
relationships for franchisees. I am immensely proud of the
management team for this initiative, which speaks to the passion
they have in allowing other entrepreneurs to grow their own
businesses.
Dividend
The Group reinstated its interim dividend in November, as well
as declaring a special dividend on 1 September 2020, following the
announcement in April 2020 that the Board did not feel it
appropriate to recommend a final dividend. The decision to pay a
special dividend and to reinstate the interim dividend reflected
the Board's confidence in the strength of the balance sheet, and
was taken only after we 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 and remain very
grateful for the support the government has offered.
The Group's balance sheet remains strong, underpinned by the
highly cash generative nature of the Group's business model. Net
cash at period end was GBP3.6m (FY20: GBP2.1m), up 71% on the prior
year. In line with our progressive dividend policy, the Board has
declared a dividend of 3.7p for the full year.
Looking ahead
As we cautiously emerge from the shadow of the COVID-19
pandemic, I can confidently say that I have never been more excited
about the Group's prospects.
We have not only continued to grow the business over the last
twelve months, we have also reinforced the foundations for our
future growth with the opening of our Coventry and Bradford
production facilities, and expanded the drivers of future growth
through several strategic initiatives.
All of this is underpinned by the Cake Box franchise platform
and the Cake Box Family, led by our founding executive management
team Under their stewardship, this model and these extraordinary
entrepreneurs have allowed us to thrive during an unprecedented
crisis despite the challenges encountered with the GDPR issue. I am
looking forward to Cake Box continuing to thrive and grow over the
next year and beyond.
Neil Sachdev MBE
Non-executive Chairman
Chief Executive's Review
I am very pleased with the progress we made over this
challenging year, marking our third consecutive year of
double-digit revenue growth against the most difficult of
backdrops.
In this climate, our first priority has remained the health,
safety and wellbeing of our customers, colleagues, franchisees and
their staff. I am immensely grateful that we successfully and
safely reopened our store estate at the end of the first lockdown
and continued to serve our customers through an incredibly
challenging time.
This has been made possible through our continued commitment of
backing our franchisees. Their dedication and that of everyone in
the Cake Box Family has meant that we have been able to emerge
stronger from a year marked by the global pandemic.
Sales
In the last 12 months the group achieved a total turnover up by
16.9% to GBP21.9m (2020: GBP18.7m), which has been driven by record
franchisee sales in the last 12 months despite being closed for the
first 6 weeks due to the pandemic. Pleasingly, when stores were
trading, we saw like-for-like sales growth of 14.7% in franchise
stores (2020: 5.1%) in the 40 week comparable period from 1st June
2020 to 7th March 2021.
A core driver of our sales is ensuring our differentiated
customer proposition remains relevant, and that we continue to grow
our product offering: keep the proposition fresh and to accommodate
new tastes and flavours. Accordingly, during the year we introduced
exciting new launches including an egg free custard to complement
products such as our new packaged loaf cakes. We also developed
further gluten free and vegan product options.
Store estate
Having started this business from a single shop in East London,
the landmark of our 150th franchise store opening in Romford, Essex
earlier this year was a significant moment for me both personally
and professionally and I was thrilled to be able to stand next to
the franchisee, Sharon, as her new store opened for trading.
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.
Strategic initiatives
We have continued to make significant progress on our strategic
initiatives to complement our franchise store estate growth,
allowing new and existing franchisees to grow their businesses
through new channels including kiosks and online delivery through
third party platforms as well as our own delivery platform.
There was further substantial growth in the number of orders
which were made online during the year, with online sales
increasing 71% year-on-year (up 84% on a like for like week basis),
making up 22% (2020: 14.9%) of total franchisee sales. Order
volumes placed through our own-brand delivery platform have been
encouraging since the launch.
Having successfully launched our shopping centre kiosk
proposition, we are trialling five Cake Box kiosks with a national
supermarket chain and the results so far have been very
encouraging. Despite the reliance of our shopping centre kiosks on
footfall, we are confident in the continued attractiveness of this
offering for existing franchisees. Trading at these locations has
resumed following the reopening of non-essential retail locations
on 12 April 2021.
Following investment to support the Group's continued expansion,
operations at Cake Box's new bakery and distribution centre in
Coventry commenced in April this year, complementing existing
facilities in Enfield and Bradford.
Bringing all of these initiatives together, we have both
reinforced the foundations of the Group's future growth with the
infrastructure to expand our franchise store growth, and we have
expanded the drivers of future growth by creating new channels to
make the Cake Box customer proposition more accessible across the
UK.
Looking ahead
As we continue to grow the business, a key priority for the
Board remains underpinning this growth with the appropriate level
of experience and expertise for the Group's central functions,
internal controls and processes. This includes the recruitment of
an IT Director, a Commercial/Managing Director with responsibility
for Group marketing and supply chain management, a Financial
Analyst and strengthening our internal audit function to ensure
that stronger ongoing controls are operated across the group
particularly in light of the data breach and increased online
sales.
Summary and Outlook
Looking back to what we've achieved over the last twelve months,
I am both incredibly proud of the Cake Box Family and incredibly
optimistic for the future. We have achieved record results during a
year which included a global pandemic and the temporary closure of
our entire store estate. We have ultimately emerged a bigger,
better business.
Trading has remained strong post-period end with nine new
franchise stores opened in the first quarter.
We have a record number of holding deposits for new franchise
stores wanting to start and grow their own businesses. This
underpins our confidence in meeting our ongoing target of 18-24
franchise store openings for FY22. Following a successful trial of
five supermarket kiosk locations, we have already opened a further
supermarket kiosk post period end and have had a further six new
locations confirmed.
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.
In June 2020, amidst the onset of the pandemic, I wrote that
"there will still be birthdays, marriages and numerous other
occasions, large and small, to celebrate up and down the country"
and our performance this year has clearly shown this to be the
case. As we cautiously emerge from the pandemic, I am thrilled that
more customers than ever will be celebrating reunions with friends,
family and colleagues over a slice of our delicious, egg-free
cake.
Sukh Chamdal
Chief Executive Officer
Financial Review
FY21 FY20
GBPm GBPm
------------------------ ----- -----
Revenue 21.9 18.7
Gross profit 10.9 8.8
Operating expenses 6.2 5.0
EBITDA 4.9 4.3
Exceptional Item 0.5 0.0
Depreciation 0.7 0.5
Share Based Payment 0.3 0.2
Operating profit 4.7 3.8
Profit before tax 4.2 3.8
Adjusted Profit before
tax* 4.7 3.8
Tax 0.8 0.6
------------------------ ----- -----
Profit for the period 3.4 3.1
Adjusted Profit for
the period* 3.9 3.1
------------------------ ----- -----
*Calculated after adjusting for provision for GDPR breach of
GBP486k
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%.
Revenue
Reported revenue for the year to 31 March 2021 was GBP21.9m.
Revenue increased by 16.9% compared to the previous financial year.
This was achieved through an increase in store like-for-like sales
and with the addition of 24 new stores around the UK in new
locations including Gloucester, Epsom, Newport, Ipswich and Hove
and 9 new kiosk openings in shopping centre.
Gross margin
Gross profit as a percentage of sales improved from 46.8% to
49.7% reflecting the combination of a volume increase and a price
efficiency in sponge and cake supplies amounting to a 250 basis
point saving.
EBITDA
EBITDA increased by 14.6% to GBP4.9m as a result of the strong
increase in sales and improved margins. Adjusted EBIDTA rose by
25.9% to GBP5.4m as a result of strong trading.
Exceptional items
Following the website data breach that occurred in 2020, the
Company was subsequently informed by its merchant services provider
that it would be fined EUR204k in relation to this. The Company has
made a total provision of GBP486k in FY21 allowing for additional
legal and professional fees and potential fine relating to the
breach. Given the one-off nature of the incident, this fine has
been categorised as an exceptional item in the Group's
accounts.
Balance sheet
Cake Box has a strong balance sheet with a cash balance at the
year-end of GBP5.1m (2020: GBP3.7m). The Group's only debt is a
mortgage of GBP1.5m secured by its freehold properties in Enfield,
Bradford and Coventry.
The Group operates a franchise model and therefore has a
relatively low and flexible cost base. The Board is therefore very
comfortable with the Group's cash levels and liquidity despite the
unprecedented events of 2020.
Taxation
The effective rate of taxation was 18.0% (2020: 16.9%). This is
in line with relief obtained in Research and Development costs,
being offset with corporation tax timing differences on capital
assets.
Earnings per share (EPS)
Un-adjusted earnings per share were 8.42p (2020: 7.82p).
Adjusted earnings per share was 9.63p (2020: 7.82p). An increase of
23% reflecting the increase in profitability of the Group. The
number of shares in issue was 40,000,000 and is unchanged since the
Company's IPO in June 2019.
Dividend
Having delivered a year of strong growth, the Board is pleased
to propose a final dividend of 3.7 pence per share (2020: 0.0p),
bringing the total dividend for the year to 5.55 pence per share
excluding a special dividend of 3.2 pence paid in October 2020.
If approved by the shareholders at the Company's AGM on 6(th)
August 2021, the final dividend of 3.7 pence per share will be paid
on 13(th) August 2021 to shareholders on the register on 16(th)
July 2021.
As previously stated, the Company intends that the total
dividend for each year will split into one third for the first six
months of the year to two thirds for the year end.
Cash position
The Group had GBP5.1m of cash at year end, an increase of
GBP1.5m. At the year end, the Group had a net cash position of
GBP3.6m which was up GBP1.6m from the previous year. I am pleased
to say that we have been able to increase our cash balance even
after loans of GBP0.9m were drawn by our franchisees from our
Franchisee Support Fund which we introduced this year to help with
funding new franchisee loans.
Trade and other receivables
The Group had GBP3.35m of trade and other receivables (including
other financial assets) at 31 March 2021, an increase on the prior
year. The majority of this balance relates to trade receivables
which have increased by GBP2.0m partly as result of not only the
increase in turnover but also due to GBP0.9m being utilised by the
Franchisee Support Fund mentioned earlier. Trading debts relating
to purchases of products by franchisees remain low in comparison as
credit terms have a defined seven day payment terms.
Trade and other payables
The Group had GBP3.35m of trade and other payables at the year
end, an increase of GBP1.8m on the prior year. The Group actively
sources cost effective suppliers without compromising on the
quality of the products. Other payables are paid according to terms
specified.
Pardip Dass
Chief Financial Officer
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
FOR THE YEARED 31 MARCH 2021
2021 2020
Note GBP GBP
Revenue 3 21,910,862 18,742,175
Cost of sales (10,978,993) (9,978,675)
------------- ------------
Gross profit 10,931,869 8,763,500
Administrative expenses before
exceptional items (6,198,981) (4,971,999)
Exceptional items 11 (486,319) -
----------------------------------- ----- ------------- ------------
Administrative expenses 4 (6,685,300) (4,971,999)
Other operating income 5 - 8,800
------------- ------------
Operating profit 6 4,246,569 3,800,301
Net finance costs 7 (37,299) (36,357)
------------- ------------
Profit before income tax 4,209,270 3,763,944
Income tax expense 12 (842,362) (635,349)
Profit after income tax 3,366,908 3,128,595
Other comprehensive income for
the year
Revaluation of freehold property 14 24,901 1,400,000
Deferred tax on revaluation of
freehold property 13 (4,731) (266,000)
------------- ------------
Total other comprehensive income
for the year 20,170 1,134,000
Total comprehensive income for
the year 3,387,078 4,262,595
============= ============
Attributable to:
Equity holders of the parent 3,387,078 4,262,595
Earnings per share
Basic 33 8.42p 7.82p
Diluted 33 8.42p 7.82p*
============= ============
*The prior year diluted earnings per share has been corrected to
reflect that performance conditions on share options have not been
met at the balance sheet date
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
AS AT 31 MARCH 2021
2021 2020
Note GBP GBP
Assets
Non-current assets
Property, plant and equipment 14 7,251,602 7,199,549
Other financial assets 17 656,005 10,000
Deferred tax asset 13 95,447 37,690
----------- -----------
8,003,053 7,247,239
----------- -----------
Current assets
Inventories 15 1,902,171 1,396,235
Trade and other receivables 16 2,490,217 1,453,232
Other financial assets 17 382,808 -
Cash and cash equivalents 5,125,864 3,676,042
9,901,060 6,525,509
----------- -----------
Total Assets 17,904,113 13,772,748
=========== ===========
Equity and liabilities
Equity
Issued share capital 18 400,000 400,000
Capital redemption reserve 19 40 40
Share option reserve 19 488,596 198,368
Revaluation reserve 19 1,609,592 1,589,422
Retained earnings 19 8,643,415 7,296,507
----------- -----------
Equity attributable to the owners
of the Parent company 11,141,643 9,484,337
----------- -----------
Current liabilities
Trade and other payables 22 3,353,749 1,493,352
Short-term borrowings 20 167,754 167,754
Current tax payable 903,469 648,522
Provisions 23 486,319 -
----------- -----------
4,911,291 2,309,628
----------- -----------
Non-current liabilities
Borrowings 21 1,318,005 1,446,288
Deferred tax liabilities 13 533,174 532,495
1,851,179 1,978,783
----------- -----------
Total Equity and Liabilities 17,904,113 13,772,748
=========== ===========
CONSOLIDATED CASH FLOW STATEMENT
FOR THE YEARED 31 MARCH 2021
Note 2021 2020*
GBP GBP
Cash flows from operating activities
Profit before income tax 4,209,270 3,763,944
Adjusted for:
Depreciation 670,333 491,630
Exceptional items 486,319
Profit on disposal of tangible fixed
assets (18,972) (5,608)
Increase in inventories (505,936) (486,519)
(Increase)/decrease in trade and other
receivables (1,172,047) 119,818
Increase/(decrease) in trade and other
payables 1,860,396 (38,537)
Share based payment charge 288,000 198,368
Finance income (4,087) (17,872)
------------ ------------
Cash generated from operations 5,813,276 4,025,224
Finance costs 41,386 54,229
Taxation paid (646,995) (727,898)
Net cash inflow from operating activities 5,207,667 3,351,555
------------ ------------
Cash flows from investing activities
Sale of investment properties - 650,000
Purchases of property, plant and equipment (704,959) (1,266,242)
Proceeds from sale of property, plant
and equipment 26,446 28,462
Interest received 4,087 17,872
Issue of loans to franchisees (1,016,813) (124,005)
Repayment of franchisee loans 123,063 126,303
------------ ------------
Net cash outflow from in investing
activities (1,568,176) (567,610)
------------ ------------
Cash flows from financing activities
Repayment of borrowings (128,283) (535,718)
Dividends paid 9 (2,020,000) (1,600,000)
Interest paid (41,586) (54,229)
------------ ------------
Net cash outflow from financing activities (2,189,869) (2,189,947)
Net increase in cash and cash equivalents 1,449,822 593,998
Cash and cash equivalents brought
forward 3,676,042 3,082,044
------------ ------------
Cash and cash equivalents carried
forward 31 5,125,864 3,676,042
============ ============
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
FOR THE YEARED 31 MARCH 2021
Attributable to the owners of the Parent Company
Share Capital Share Revaluation Retained
capital redemption option reserve earnings Total
GBP reserve reserveGBP GBP GBP GBP
GBP
At 31 March
2019 400,000 40 - 455,422 5,767,912 6,623,374
Profit for the
year - - - - 3,128,595 3,128,595
Revaluation of
freehold
property - - - 1,400,000 - 1,400,000
Deferred tax
on
revaluation
of freehold
property - - - (266,000) - (266,000)
-------------- -------------- -------------- -------------- ------------------------ ------------------------
Total
comprehensive
income for
the
year - - - 1,134,000 3,128,595 4,262,595
Transactions
with owners
in
their
capacity
as owners
Share-based
payments - - 198,368 - - 198,368
Dividends paid - - - - (1,600,000) (1,600,000)
--------------
At 31 March
2020 400,000 40 198,368 1,589,422 7,296,507 9,484,337
============== ============== ============== ============== ======================== ========================
Profit for the
year - - - - 3,366,908 3,366,908
Revaluation of
freehold
property - - - 24,901 - 24,901
Deferred tax
on
revaluation
of freehold
property - - - (4,731) - (4,731)
-------------- -------------- -------------- -------------- ------------------------ ------------------------
Total
comprehensive
income for
the
year - - - 20,170 3,366,908 3,387,078
Transactions
with owners in
their capacity
as owners
Share-based
payments - - 288,000 - - 288,000
Deferred tax
on
share-based
payments - - 2,228 - - 2,228
Dividends paid - - - - (2,020,000) (2,020,000)
-------------- -------------- -------------- -------------- ------------------------ ------------------------
At 31 March
2021 400,000 40 488,596 1,609,592 8,643,415 11,141,643
============== ============== ============== ============== ======================== ========================
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEARED 31 MARCH 2021
1. General information
Cake Box Holdings Plc is a listed company limited by shares,
incorporated and domiciled in England and Wales. Its registered
office is 20 - 22 Jute Lane, Enfield, Middlesex, EN3 7PJ.
The financial statements cover Cake Box Holdings Plc ('Company')
and the entities it controlled at the end of, or during, the
financial year (referred to as the 'Group').
The principal activity of the Group continues to be the
specialist retailer of fresh cream cakes.
2. Accounting policies
2.1 Basis of preparation of financial statements
While the information included in this preliminary announcement
has been prepared on a going concern basis, under historical cost
convention other than certain classes of property, plant and
equipment, and equity settled share-based payments in scope of IFRS
2, which are measured at fair value, and in accordance with
International Accounting Standards in conformity with the
requirements of the Companies Act 2006, the above audited financial
information does not constitute statutory financial statements as
defined in section 434 of the Companies Act 2006. The above figures
for the period ended 31 March 2021 have been extracted from the
Group's financial statements which have been reported on by the
Group's auditors and received an audit opinion which was
unqualified. The Company's statutory financial statements for the
year ended 31 March 2020 have been lodged with the Registrar of
Companies. These financial statements received an audit report
which was unqualified and did not include any reference to matters
to which the auditors drew attention by way of emphasis without
qualifying their report or a statement under section 498(2) or
section 498(3) of the Companies Act 2006. The financial statements
for the year ended 31 March 2021 will be dispatched to the
shareholders and filed with the Registrar of Companies. The
preliminary announcement was approved by the Board and authorised
for issue on 29 June 2021.
Sources of estimation uncertainty
The preparation of financial statements under IFRS requires
management to make judgements, estimates and assumptions that
affect the application of accounting policies and reported amounts
of assets, liabilities, income and expenses. The estimates and
associated assumptions are based on historical experience and
factors that are believed to be reasonable under the circumstances,
the results of which form the basis of making judgements about
carrying values of assets and liabilities that are not readily
apparent from other sources. Actual results may differ from these
estimates. Estimates and assumptions are reviewed on an ongoing
basis and any revision to estimates or assumptions are recognised
in the period in which they are revised and in future periods
affected.
Significant judgements and estimates
The material areas in which estimates, and judgements are
applied are as follows:
Provisions - Judgement and Estimate
The Group has recognised provisions following a data breach
which impacted the Group's website payment system as further set
out in Note 24. The provision relates to the fine received by the
merchant service provider, and estimated costs associated including
potential fines from the ICO in respect to GDPR breaches and
associated legal and professional fees. Management use judgement in
respect of potential fees and fines and estimates to calculate the
quantum of costs which equate to GBP304,176 of the total
provision.
Freehold property - Judgement
Freehold properties are held at valuation. Depreciation has not
been provided as there is no difference between the carrying value
and expected residual value.
One property held at valuation has been revalued by an
independent valuer during the year. The directors consider that the
value of the freehold property is representative of the current
market value after consideration to similar properties in the
surrounding area based upon extensive research at the balance sheet
date. See note 14 for further information.
Share-based payment - Estimate
Share based payments have been measured using the Black-Scholes
valuation model which requires a range of input factors which are
estimates based on historical data, expected data, benchmarking and
consideration of non-market based performance conditions. Full
details of these factors are detailed in note 20.
2.2 Functional and presentation currency
The currency of the primary economic environment in which the
Group operates (the functional currency) is Pound Sterling ("GBP or
GBP") which is also the presentation currency.
2.3 Basis of consolidation
The Group financial statements consolidate the financial
statements of the Company and all its subsidiaries. Subsidiaries
include all entities over which the Group has the power to govern
financial and operating policies. The existence and effect of
potential voting rights that are currently exercisable or
convertible are considered when assessing whether the Group
controls another entity. Subsidiaries are consolidated from the
date on which control commences until the date that control ceases.
Intra-group transactions are eliminated in preparing the
Consolidated Financial Statements.
A list of the significant investments in subsidiaries, including
the name, country of incorporation and proportion of ownership
interest is given in note 5 to the Company's separate financial
statements.
2.4 Application of New and Revised IFRS's
As a result of the UK leaving the EU the group has early adopted
the UK-adopted IFRS's. At the balance sheet date there were no
material differences as a result of the adoption.
In the current year, the Group has applied a number of other
amendments to Standards and Interpretations issued by the IASB that
are effective for an annual period that begins on or after 1
January 2020. This has not had any material impact on the amounts
reported for the current and prior years. These include:
Effective
Date
IAS 1 Definition of material 1 January
& 8 2020
IFRS 3 Definition of a business 1 January
2020
IFRS 9, IBOR (Inter-Bank Offered Rates) Reforms Phase 1 January
IAS 39 1 Amendment 2020
& IFRS
7
Conceptual Amendments References to the Conceptual Framework 1 January
Framework in IFRS standards 2020
At the date of authorisation of these financial statements the
following Standards and Interpretations which have not been applied
in these financial statements were in issue but not yet effective
and are not expected to have a material impact on the Group:
Effective
Date
IFRS 9, IBOR (Inter-Bank Offered Rates) Reforms Phase 1 January
IAS 39 2 Amendment 2021
& IFRS
7
IFRS 3 'Amendments References to the Conceptual Framework 1 January
in IFRS standards 2022
IAS 16 Amendments prohibiting a company from deducting
from the cost of property, plant and equipment
amounts received from selling items produced
while the company is preparing the asset for
its intended use
IAS 37 Amendments regarding the costs to include
when assessing whether a contract is onerous
IAS 1 Amendments regarding the disclosure of accounting 1 January
& IAS policies and amendments regarding the definition 2023
8 of accounting estimates
2.5 Segment reporting
Operating segments are reported in a manner consistent with the
internal reporting provided to the chief operating decision-maker.
The chief operating decision-maker, who is responsible for
allocating resources and assessing performance of the operating
segments, has been identified as the executive directors that make
strategic decisions. Whilst the Group trading has numerous
components, the chief operating decision maker (CODM) is of the
opinion that there is only one operating segment. This is in line
with internal reporting provided to the executive directors.
2.6 Going concern
The directors pay careful attention to the cost base of the
Group ensuring not only that it is kept at a level to satisfy the
commercial requirements but also that it remains appropriate to the
level of activity of the Group and the financial resources
available to it.
The COVID-19 pandemic has been unprecedented in scale and impact
and the directors have taken swift and decisive action to protect
customers, colleagues, franchisees, and the communities in which
the Group operates, by implementing the necessary steps to
safeguard business through the crisis, in line with UK Government
guidelines.
There remains much uncertainty about the virus and how long it
will continue to impact the Group, customers, and the wider public
and economy but the directors are confident that the Group has the
financial and operational resilience such that no material
uncertainty exists.
Based on the current working capital forecast, the Group is
unlikely to need additional funds within twelve months of the date
of approval of these financial statements in order to maintain its
proposed work levels and to continue successfully managing its cash
resources. After making enquiries and considering the assumptions
upon which the forecasts have been based, the directors have a
reasonable expectation that the Group has adequate resources to
continue in operational existence for the period of at least twelve
months from the date of approval of these financial statements. For
these reasons, they continue to adopt the going concern basis of
accounting in preparing the annual financial statements.
2.7 Revenue recognition
Revenue is recognised to the extent that it is probable that the
economic benefits will flow to the Group and the revenue can be
reliably measured. Revenue is measured as the fair value of the
consideration received or receivable, excluding discounts, rebates,
value added tax and other sales taxes. The following criteria must
also be met before revenue is recognised:
Sale of goods
Turnover from the sale of goods is recognised when all of the
following conditions are satisfied:
-- the Group has transferred the significant risks and rewards
of ownership to the buyer;
-- the Group retains neither continuing managerial involvement
to the degree usually associated with the ownership nor effective
control over the goods sold;
-- the amount of turnover can be measured reliably;
-- it is probable that the Group will receive the consideration
due under the transaction; and
-- the costs incurred or to be incurred in respect of the
transaction can be measured reliably.
Fees
Fees receivable from the franchisee for branding, equipment,
training and initial support are recognised on delivery of the
equipment and rendering of the services enabling the franchisee to
operate at which time the Group has performed its obligations under
the franchise agreement in respect of the fees.
Online sales
Online sales which include click and collect sales where the
franchisee has the primary responsibility for the fulfillment of
the order and the Group is collecting consideration on behalf of
the franchisee as agent are not recognised as revenue of the Group.
Only the net commission amount is recognised.
2.8 Current and deferred taxation
Current tax liabilities
Current tax for the current and prior periods is, to the extent
unpaid, recognised as a liability. If the amount already paid in
respect of the current and prior periods exceeds the amount due for
those periods, the excess is recognised as an asset, limited to the
extent that it is probable that taxable profits will be available
against which those deductible temporary differences can be
utilised.
Deferred Tax
Deferred tax is recognised on differences between the carrying
amounts of assets and liabilities in the financial statements and
their corresponding tax bases (known as temporary differences).
Deferred tax liabilities are recognised for all temporary
differences that are expected to increase taxable profit in the
future. Deferred tax assets are recognised for all temporary
differences that are expected to reduce taxable profit in the
future, and any unused tax losses or unused tax credits, limited to
the extent that it is probable that taxable profits will be
available against which those deductible temporary differences can
be utilised.
The net carrying amount of deferred tax assets is reviewed at
each reporting date and is adjusted to reflect the current
assessment of future taxable profits. Any adjustments are
recognised in the statement of comprehensive income. Deferred tax
is calculated at the tax rates that are expected to apply to the
taxable profit (tax loss) of the periods in which it expects the
deferred tax asset to be realised or the deferred tax liability to
be settled, on the basis of tax rates that have been enacted or
substantively enacted by the end of the reporting period.
Tax Expense
Income tax expense represents the sum of the tax currently
payable and deferred tax movement for the current period. The tax
currently payable is based on taxable profit for the year.
2.9 Tangible fixed assets - held at cost
Property, plant & equipment, other than investment and
freehold properties, are stated at historical cost less accumulated
depreciation and any accumulated impairment losses. Historical cost
includes expenditure that is directly attributable to bringing the
asset to the location and condition necessary for it to be capable
of operating in the manner intended by management.
Land is not depreciated. Depreciation on other assets is charged
to allocate the cost of assets less their residual value over their
estimated useful lives, using the straight--line method.
Depreciation is provided on the following annual basis:
Plant & machinery - 25% Straight-line
method
Motor vehicles - 25% Straight-line
method
Fixtures & fittings - 25% Straight-line
method
Assets under construction - Not depreciated
Assets under the course of construction are carried at cost less
any recognised impairment loss. Depreciation of these assets
commences when the assets are ready for their intended use.
The assets' residual values, useful lives and depreciation
methods are reviewed, and adjusted prospectively if appropriate, or
if there is an indication of a significant change since the last
reporting date.
Gains and losses on disposals are determined by comparing the
proceeds with the carrying amount and are recognised in the
Statement of Comprehensive Income.
2.10 Tangible fixed assets - held at valuation
Individual freehold properties are carried at fair value at the
date of the revaluation less any subsequent accumulated impairment
losses. Revaluations are undertaken with sufficient regularity to
ensure the carrying amount does not differ materially from that
which would be determined using fair value at each Consolidated
Statement of Financial Position date.
Fair values are determined by an independent valuer and updated
by the directors from market-based evidence.
Revaluation gains and losses are recognised in Other
Comprehensive Income unless losses exceed the previously recognised
gains or reflect a clear consumption of economic benefits, in which
case the excess losses are recognised in the Statement of
Comprehensive Income.
2.11 Inventories
Inventories are stated at the lower of cost and net realisable
value, being the estimated selling price less costs to complete and
sell. Cost is based on the cost of purchase on a first in, first
out basis.
2.12 Financial instruments
Recognition of Financial Instruments
Financial assets and financial liabilities are recognised when
the Group becomes party to the contractual provisions of the
instrument.
Trade and other receivables
Trade and other receivables are initially measured at fair value
and subsequently at amortised cost. All sales are made on the basis
of normal credit terms, and the receivables do not bear interest.
Where credit is extended beyond normal credit terms, receivables
are measured at amortised cost using the effective interest method.
At the end of each reporting period, the carrying amounts of trade
and other receivables are reviewed. Impairment provisions for
current and non-current trade receivables are recognised based on
the simplified approach within IFRS 9 using a provision matrix in
the determination of the lifetime expected credit losses. During
this process the probability of the non-payment of the trade
receivables is assessed. This probability is then multiplied by the
amount of the expected loss arising from default to determine the
lifetime expected credit loss for the trade receivables. For trade
receivables, which are reported net, such provisions are recorded
in a separate provision account with the loss being recognised
within cost of sales in the consolidated statement of comprehensive
income. On confirmation that the trade receivable will not be
collectable, the gross carrying value of the asset is written off
against the associated provision.
Other financial assets
Other financial assets are initially measured at fair value and
subsequently at amortised cost. At the end of each reporting period
the carrying amount of these assets are reviewed on an individual
balance basis and appropriate impairment is made if required.
Trade and other payables
Trade and other payables are initially measured at fair value
and subsequently at amortised cost. Trade payables are obligations
on the basis of normal credit terms and do not bear interest. Trade
payables denominated in a foreign currency are translated into
Sterling using the exchange rate at the reporting date. Foreign
exchange gains or losses are included in other income or other
expenses.
Bank loans and overdrafts
All borrowings are initially recorded at the amount of proceeds
received, net of transaction costs. Borrowings are subsequently
carried at amortised cost, with the difference between the
proceeds, net of transaction costs, and the amount due on
redemption being recognised as a charge to the income statement
over the period of the relevant borrowing.
Interest expenses are recognised on the basis of the effective
interest method and are included in finance costs.
Borrowings are classified as current liabilities unless the
Group has an unconditional right to defer settlement of the
liability for at least 12 months after the reporting date.
2.13 Finance costs
Finance costs are charged to the Consolidated Statement of
Comprehensive Income over the term of the debt using the effective
interest method so that the amount charged is at a constant rate on
the carrying amount. Issue costs are initially recognised as a
reduction in the proceeds of the associated capital instrument.
2.14 Cash and cash equivalents
Cash and cash equivalents comprise cash on hand and call
deposits, and other short-term highly liquid investments that are
readily convertible to a known amount of cash and are subject to an
insignificant risk of changes in value.
2.15 Dividends
Equity dividends are recognised when they become legally
payable. Interim equity dividends are recognised when paid. Final
equity dividends are recognised when approved by the shareholders
at an Annual General Meeting.
2.16 Leases
Leases would have been recognised under IFRS16 but as the leases
have less than twelve months until expiry, they have been
recognised on a straight line basis.
2.17 Employee benefits
Short Term Employee Benefits
The cost of short-term employee benefits, (those payable within
12 months after the service is rendered, such as leave pay and sick
leave, bonuses, and non-monetary benefits such as medical care),
are recognised in the period in which the service is rendered and
are not discounted.
Defined contribution pension plan
The Group operates a defined contribution plan for its
employees. A defined contribution plan is a pension plan under
which the Group pays fixed contributions into a separate entity.
Once the contributions have been paid the Group has no further
payment obligations.
The contributions are recognised as an expense in the
Consolidated Statement of Comprehensive Income when they fall due.
Amounts not paid are shown in accruals as a liability in the
Consolidated Statement of Financial Position. The assets of the
plan are held separately from the Group in independently
administered funds.
Termination benefits
The entity recognises the expense and corresponding liability
for termination benefits when it is demonstrably committed to
either of the following scenarios:
a. The termination of the employment of an employee or group of
employees before the normal retirement age, or
b. The provision of termination benefits in relation to an offer
made to encourage voluntary redundancy.
The value of such benefit is measured at the best estimate of
the expenditure required to settle the obligation at the reporting
date.
2.18 Provisions and contingencies
Provisions are recognised when the Group has an obligation at
the reporting date as a result of a past event; it is probable that
the Group will be required to transfer economic benefits in
settlement; and the amount of the obligation can be estimated
reliably.
Provisions are measured at the present value of the amount
expected to be required to settle the obligation using a pre-tax
rate that reflects current market assessments of the time value of
money and the risks to a specific obligation. The increase in the
provision due to the passage of time is recognised as interest
expense.
Provisions are not recognised for future operating losses.
Contingent assets and contingent liabilities are not
recognised.
2.19 Share capital
Ordinary shares are classified as equity. Equity instruments are
measured at the fair value of the cash or other resources received
or receivable, net of the direct costs of issuing the equity
instruments. If payment is deferred and the time value of money is
material, the initial measurement is on a present value basis.
2.20 Research and development
Research and development expenditure is charged to the
Consolidated Statement of Comprehensive Income in the year in which
it is incurred. The expenditure does not meet the definition of
'Development' under IAS 38.
2.21 Fair value measurement
When an asset or liability, financial or non-financial, is
measured at fair value for recognition or disclosure purposes, the
fair value is based on the price that would be received to sell an
asset or paid to transfer a liability in an orderly transaction
between market participants at the measurement date; and assumes
that the transaction will take place either: in the principal
market; or in the absence of a principal market, in the most
advantageous market.
Fair value is measured using the assumptions that market
participants would use when pricing the asset or liability,
assuming they act in their economic best interests. For
non-financial assets, the fair value measurement is based on its
highest and best use. Valuation techniques that are appropriate in
the circumstances and for which sufficient data are available to
measure fair value, are used, maximising the use of relevant
observable inputs and minimising the use of unobservable
inputs.
Assets and liabilities measured at fair value are classified
into three levels, using a fair value hierarchy that reflects the
significance of the inputs used in making the measurements.
Classifications are reviewed at each reporting date and transfers
between levels are determined based on a reassessment of the lowest
level of input that is significant to the fair value
measurement.
For recurring and non-recurring fair value measurements,
external valuers may be used when internal expertise is either not
available or when the valuation is deemed to be significant.
External valuers are selected based on market knowledge and
reputation. Where there is a significant change in fair value of an
asset or liability from one period to another, an analysis is
undertaken, which includes a verification of the major inputs
applied in the latest valuation and a comparison, where applicable,
with external sources of data.
2.22 Share based payment
Where share options are awarded to employees, the fair value of
the options (measured using the Black-Scholes model) at the date of
grant is charged to the Statement of Comprehensive Income over the
vesting period. Non-market vesting conditions are taken into
account by adjusting the number of equity instruments expected to
vest at each Statement of Financial Position date so that,
ultimately, the cumulative amount recognised over the vesting
period is based on the number of options that eventually vest.
Market vesting conditions are factored into the fair value of the
options granted. The cumulative expense is not adjusted for failure
to achieve a market vesting condition.
The fair value of the award also takes into account non-vesting
conditions. These are either factors beyond the control of either
party or factors which are within the control of one or other of
the parties. Where the terms and conditions of options are modified
before they vest, the increase in the fair value of the options,
measured immediately before and after the modification, is also
charged to Statement of Comprehensive Income over the remaining
vesting period.
2.23 Exceptional items
Exceptional items are transactions that fall within the ordinary
activities of the Group but are presented separately due to their
size or incidence.
3. Segment reporting
Components reported to the chief operating decision maker (CODM)
are not separately identifiable and as such consider there to be
one reporting segment. The Group makes varied sales to its
customers but none are a separately identifiable component. The
following information is disclosed:
2021 2020
GBP GBP
Sale of goods 19,213,915 16,580,555
Sale of services 2,696,947 2,161,620
21,910,862 18,742,175
========== ==========
All revenue occurred in the United Kingdom for both financial
years.
The operating segment information is the same information as
provided throughout the consolidated financial statements and is
therefore not duplicated.
The Group was not reliant upon any major customer during 2021 or
2020.
4. Expenses by nature
The Administrative expenses have been arrived at after
charging:
2021 2020
GBP GBP
Wages and salaries 3,702,499 2,821,761
Travel and entertaining costs 210,587 389,781
Supplies costs 233,258 99,254
Professional costs 538,533 433,513
Depreciation costs 670,333 491,630
Rates and utilities costs 294,292 291,626
Property maintenance costs 193,607 148,910
Advertising costs 317,154 231,013
Other costs 38,718 64,511
Exceptional items 486,319 -
6,685,300 4,971,999
========= =========
5. Other operating income
2021 2020
GBP GBP
Rent receivable - 8,800
- 8,800
====== ======
6. Operating profit
The operating profit is stated after charging/(crediting):
2021 2020
GBP GBP
Depreciation of tangible fixed assets 670,333 491,630
Stock recognised as an expense 8,768,319 8,839,732
Profit on disposal of property, plant & equipment (18,972) (5,608)
Research and development charged as an expense 215,555 254,053
Lease expense - 45,000
Fees payable to the Group's auditor and its
associates for the audit of the Group's annual
financial statements 87,000 60,000
Fees payable to the Group's auditor and its
associates for the audit of the Group's interim
financial statements 7,500 7,000
Share based payment charge 288,000 198,368
7. Net finance costs
2021 2020
GBP GBP
Finance expenses
Bank loan interest 35,771 54,229
Interest on overdue tax 5,615 -
Finance income
Bank interest received (4,087) (17,872)
37,299 36,357
======= ========
8. Staff costs
Staff costs, including directors' remuneration, were as
follows:
2021 2020
GBP GBP
Wages and salaries 3,055,008 2,341,395
Social security costs 287,875 221,297
Pension costs 42,080 32,780
Private health 29,536 27,921
Share based payment expense 288,000 198,368
3,702,499 2,821,761
========= =========
The average monthly number of employees, including directors,
for the year was 107 (2020 - 81).
9. Dividends
2021 2020
GBP GBP
Interim dividend of 1.6p per ordinary share - 640,000
Final dividend of 2.4p per ordinary share proposed
and paid during the year relating to the previous
year's results - 960,000
Interim dividend of 1.85 per ordinary share 740,000 -
Final dividend of 3.2p per ordinary share proposed
and paid during the year relating to the previous
year's results 1,280,000 -
2,020,000 1,600,000
--------- =========
On 10 August 2020 the directors declared a final dividend for
the year ended 31 March 2020 of 3.2p per ordinary share, which was
paid on 23 October 2020.
Since the year end the Directors proposed the payment of a final
dividend of 3.7 pence (2020 - 3.2 pence) per share totaling
1,480,000 (2020 - GBP1,280,000) for the year ended 31 March
2021.
10. Directors' remuneration and key management personnel
The Directors' remuneration is disclosed within the Directors'
Remuneration Report. The Executive Directors are considered key
management personnel. Employers NIC paid on Directors' remuneration
in the year was GBP62,287 (2020 - GBP51,970).
11. Exceptional items
2021 2020
GBP GBP
Website data breach 486,319 -
486,319 -
======== ====
Please see note 24 for further information.
12. Taxation
2021 2020
GBP GBP
Corporation tax
Current tax on profits for the year 900,406 648,521
Adjustments in respect of previous periods 1,536 (19,574)
Deferred tax
Arising from origination and reversal of
temporary differences (59,580) 6,402
Taxation on profit on ordinary activities 842,362 635,349
========== ==========
Factors affecting tax charge for the year
The tax assessed for the year is lower than (2020 - lower than)
the standard rate of corporation tax in the UK of 19% (2020
- 19%). The differences are explained below:
2021 2020
GBP GBP
Profit on ordinary activities before tax 4,209,270 3,763,944
Profit on ordinary activities multiplied
by standard rate of corporation tax in
the UK of 19% (2020 - 19%) 799,761 715,149
Effects of:
Expenses not deductible for tax purposes,
other than goodwill amortisation and impairment 95,115 50,795
Adjustment in research and development
tax credit leading to a decrease in the
tax charge (53,242) (111,021)
Difference in tax rates used within share-based
payments (808) -
Adjustments to tax charge in respect of
prior periods 1,536 (19,574)
Total tax charge for the year 842,362 635,349
========== ==========
Factors that may affect future tax charge
At the Budget 2021 on 3 March 2021, the Government announced
that the Corporation Tax rate will increase to 25% for companies
with profits above GBP250,000 with effect from 1 April 2023, as
well as announcing a number of other changes to allowances and
treatment of losses. These changes are not yet substantively
enacted, and the Company has not yet undertaken a full analysis of
the impact of the changes.
13. Deferred taxation
2021 2020
GBP GBP
Balance brought forward 494,805 222,403
Charged to other comprehensive income:
Deferred tax on revalued freehold property 4,731 266,000
Charged directly to reserves:
Employee benefits (including share-based payments) (2,228) -
Charged to profit and loss:
Deferred tax on revalued investment properties - (78,169)
Accelerated capital allowances (3,715) 122,261
Employee benefits (including share-based payments) (55,529) (37,690)
Other short-term timing differences (337) -
Balance carried forward 437,727 494,805
======== ========
2021 2020
GBP GBP
Deferred tax liabilities
Accelerated capital allowances 197,261 200,976
Other short-term timing differences (1,751) (1,414)
Property revaluations (including indexation) 337,664 332,933
-------- --------
533,174 532,495
Deferred tax assets
Employee benefits (including share-based payments) (95,447) (37,690)
437,727 494,805
======== ========
Movements in deferred tax in direct relation to freehold
property revaluation are recognised immediately against the
revaluation reserve.
14. Property, plant and equipment
Assets under Freehold Plant & Motor Fixtures
construction property machinery vehicles & fittings Total
GBP GBP GBP GBP GBP GBP
Cost or valuation
At 1 April
2019 1,570,793 2,500,000 1,103,652 392,310 1,002,422 6,569,177
Additions 306,927 - 120,348 253,837 585,130 1,266,242
Disposals - - - (49,142) - (49,142)
Transfer between
classes (839,543) 724,851 (207,972) 4,025 318,639 -
Assets written
off - - (30,579) - (86,701) (117,280)
Revaluations - 1,400,000 - - - 1,400,000
At 31 March
2020 1,038,177 4,624,851 985,449 601,030 1,819,490 9,068,997
--------------- ---------- ------------ ---------- ------------ ----------
Depreciation
At 1 April
2019 - - 624,893 204,296 692,197 1,521,386
Charge for
the year - - 93,359 122,321 275,950 491,630
Disposals - - - (26,288) - (26,288)
Transfer between
classes - - (39,640) 2,934 36,706 -
Assets written
off - - (30,579) - (86,701) (117,280)
--------------- ---------- ------------ ---------- ------------ ----------
At 31 March
2020 - - 648,033 303,263 918,152 1,869,448
--------------- ---------- ------------ ---------- ------------ ----------
Net book value
--------------- ---------- ------------ ---------- ------------ ----------
At 31 March
2020 1,038,177 4,624,851 337,416 297,767 901,338 7,199,549
=============== ========== ============ ========== ============ ==========
Assets under Freehold Plant & Motor Fixtures
construction property machinery vehicles & fittings Total
GBP GBP GBP GBP GBP GBP
Cost or valuation
At 1 April
2020 1,038,177 4,624,851 985,449 601,030 1,819,490 9,068,997
Additions 82,396 - 88,295 146,005 388,263 704,959
Disposals - - - (44,165) - (44,165)
Revaluations - 24,901 - - - 24,901
At 31 March
2021 1,120,573 4,649,752 1,073,744 702,870 2,207,753 9,754,692
--------------- ---------- ------------ ---------- ------------ ----------
Depreciation
At 1 April
2020 - - 648,033 303,263 918,152 1,869,448
Charge for
the year - - 138,766 132,471 399,096 670,333
Disposals - - - (36,691) - (36,691)
At 31 March
2021 - - 786,799 399,043 1,317,248 2,503,090
--------------- ---------- ------------ ---------- ------------ ----------
Net book value
--------------- ---------- ------------ ---------- ------------ ----------
At 31 March
2021 1,120,573 4,649,752 286,945 303,827 890,505 7,251,602
=============== ========== ============ ========== ============ ==========
The valuation at the balance sheet date has been made by the
directors based upon costs incurred during the construction
phase.
On 24 February 2021 existing freehold property was revalued by
an independent qualified valuer, in accordance with the RICS
Valuation - Global Standards 2017 (the Red Book). This valuation
was maintained by the directors after consideration to similar
properties in the surrounding area based upon extensive research at
the balance sheet date.
The directors have judged previous third party and internal
valuations, made on the same basis as above, on other freehold
property as a true measure of value for at the balance sheet
date.
The fair value of freehold property is categorised as a level 3
recurring fair value measurement.
If the Freehold properties had been accounted for under the historic
cost accounting rules, the properties would have been measured
as follows:
2021 2020
GBP GBP
Historic cost 2,817,188 2,817,188
2,817,188 2,817,188
==================== ===================
15. Inventories
2021 2020
GBP GBP
Finished goods and goods
for resale 1,902,171 1,396,235
========== ==========
Inventories are charged to cost of sales in the Consolidated
Statement of Comprehensive Income.
16. Trade and other receivables
2021 2020
GBP GBP
Trade receivables 2,041,673 934,763
Other receivables 17,147 179,236
Prepayments 431,397 204,170
2,490,217 1,318,169
========== ==========
Non-current - -
Current 2,490,217 1,453,232
2,490,217 1,463,232
========== ==========
The fair value of those trade and other receivables classified
as financial assets at amortised cost are disclosed in the
financial instruments. (Note 27).
The Group's exposure to credit and market risks, including
impairments and allowances for credit losses, relating to trade and
other receivables is disclosed in the financial risk management and
impairment of financial assets note.
17. Other financial assets
2021 2020
GBP GBP
Other financial assets 1,038,812 145,063
1,038,812 145,063
========== ========
Non-current 656,004 10,000
Current 382,808 135,063
1,038,812 145,063
========== ========
All non-current assets are due within five years of the
statement of financial position date. The loans are interest free
and payable in equal monthly instalments.
18. Share capital
2021 2020
GBP GBP
40,000,000 Ordinary shares of GBP0.01
each 400,000 400,000
-------- --------
400,000 400,000
======== ========
All shares rank equally in all respects.
19. Reserves
The following describes the nature and purpose of each reserve
within equity:
Capital redemption reserve
Amounts transferred from share capital on redemption of issued
shares.
Revaluation reserve
Gain/(losses) arising on the revaluation of the Group's property
(other than investment property).
Retained earnings
All other net gains and losses and transactions with owners
(e.g. dividends, fair value movements of investment property) not
recognised elsewhere.
Share option reserve
Gains/losses arising on amounts in respect of equity-settled
share options outstanding. See note 20 for more information.
20. Share-Based Payments
The Group operates two equity-settled share-based remuneration
schemes for certain employees at management and Executive Director
level: A United Kingdom tax authority approved scheme for senior
managers and an executive director and an unapproved scheme for
executive directors. The main vesting condition for senior managers
is EBITDA reaching GBP19 million by the third anniversary of the
date of the grant. The main vesting condition for the executive
director is Earnings Per Share reaching a minimum of 36.41p by the
third anniversary of the date of the grant on which 30% will be
exercisable. This increases by 0.0963% for every penny over the
minimum level. The individuals must remain employees of the Group
over the 3 or 4 year period. Under the unapproved scheme, options
vest on the same basis as the approved scheme for the executive
director. In addition, the options will lapse 10 years after the
grant date.
2021 2021 2020 2020
Weighted Weighted
average average
exercise exercise
price price
(pence) Number (pence) Number
Outstanding as at 1 April 64 688,400 - -
Granted during the year - - 64 688,400
Forfeited during the year - - - -
Exercised during the year - - - -
Lapsed during the year - - - -
Outstanding as at 31 March 64 688,400 64 688,400
======== ========
The exercise price of options outstanding at 31 March 2021
ranged between 1 penny and 165 pence which represented the grant of
the unapproved and approved options respectively. Their weighted
average remaining contractual life of these options at the year end
date was 520 days (2020 - 885 days)
Of the total number of options outstanding at 31 March 2021,
none had vested nor were any exercisable. No options were exercised
during the year.
2021 2020
GBP GBP
Option pricing model used Black-Scholes Black-Scholes
Share price at date of grant (pence) 181 181
Contractual life (days) 1096 - 1461 1096 - 1461
Exercise price (pence) 1-165 1-165
Volatility 20% 20%
Risk free interest rate 0.71% 0.71%
The volatility assumption, measured at the standard deviation of
expected share price returns, is based on a statistical analysis of
share prices of similar listed entities over the recent years.
The share based payment expense of GBP288,000 (2020 -
GBP198,368) is included in notes 6 and 8. This is calculated on the
above assumptions over the relevant period and that the attrition
rate is 100%.
The Group did not enter into any share-based payment
transactions with parties other than employees during the current
or previous years.
21. Borrowings
2021 2020
GBP GBP
Non-current borrowings
Bank loans 1,318,005 1,446,288
1,318,005 1,446,288
========== ==========
Current borrowings
Bank loans 167,754 167,754
167,754 167,754
========== ==========
Bank loans have fixed charges over the properties to which they
relate and interest of 2.15% - 2.23% above Bank of England base
rate are charged on the loans. The loans are repayable in monthly
instalments with final payments due between March 2024 and November
2025.
22. Leases
Operating Leases - Lessee
The Group leased a building under non-cancellable operating
lease agreements. There are no lease commitments at the year-end
date
The total future value of minimum lease payments is as
follows:
2021 2020
GBP GBP
Land and buildings
Not later than 1 year - 23,671
Later than 1 year and not later than 5
years - -
Total - 23,671
======= =======
Operating Leases - Lessor
One leased property was sub-leased. The total future value of
minimum lease payments receivable is due as follows:
2021 2020
GBP GBP
Not later than 1 year - 46,288
Later than 1 year and not later than 5
years - -
Total - 46,288
======= =======
23. Trade and other payables
2021 2020
GBP GBP
Trade payables 2,495,741 684,767
Other taxation and social security 242,473 207,336
Other payables 21,099 142,250
Accruals and deferred income 594,436 458,999
3,353,749 1,493,352
========== ==========
The fair value of the trade and other payables classified as
financial instruments are disclosed in the financial instruments
(Note 27).
The Group's exposure to market and liquidity risks related to
trade and other payables is disclosed in the financial risk
management and impairment of financial assets note. The Group pays
its trade payables on terms and as such trade payables are not yet
due at the statement of financial position dates.
24. Provisions
2021 2020
GBP GBP
Website data breach 486,319 -
======== =====
Website data breach
A malware attack occurred in 2020 which impacted our website
payment system. The company has made a total provision of
GBP486,319, which represents the fine issued by the merchant
services provider totalling EUR204k. This amount is expected to be
settled in the next financial year. In addition, further provisions
represent the potential fines from the Information Commissioner's
Office ("ICO") in respect to breach of General Data Protection
Regulation ("GDPR) and other associated legal and professional
fees. The amount provided for is based on independent legal advice
and timing of settlement is uncertain.
Given the one-off nature of the incident, this fine has been
categorised as an exceptional item in the Group's accounts.
Website
data breach
GBP
Carrying amount at the start
of the year -
Additional amounts recognised 486,319
Carrying amounts at the end of
the year 486,319
=============
25. Pension commitments
The Group operates a defined contributions pension scheme. The
assets of the scheme are held separately from those of the Group in
an independently administered fund. The pension cost charge
represents contributions payable by the Group to the fund and
amounted to GBP42,080 (2020 - GBP32,780). Contributions totaling
GBP10,089 (2020 - GBP10,652) were payable to the fund at the
statement of financial position date.
26. Related party transactions
Transactions between the Company and its subsidiaries, which are
related parties, have been eliminated on consolidation. Related
party transactions are considered to be at arms-length.
Details of amounts paid to key management personnel which
includes executive and non-executive directors are included within
note 10 and the Directors Remuneration Report.
Key management personnel had an interest in dividends as
follows:
2021 2020
GBP GBP
Mr Sukh Chamdal 645,790 661,517
Mr Pardip Dass 196,719 146,817
Mr Jaswir Singh 28,079 21,867
Mr Neil Sachdev 935 741
871,523 830,942
======== =========
During the year the Group made sales to companies under the
control of the directors. All sales were made on an arms-length
basis. These are detailed as follows with director shareholding %
shown in brackets:
Mr Sukh Chamdal * 2021 2020
GBP GBP GBP GBP
Sales Balance Sales Balance
Cake Box (Crawley) Limited (0%) 111,825 2,639 132,092 13,708
Cake Box CT Limited (0%) 222,752 20,157 126,110 -
Cake Box (Strood) Limited (0%) 147,985 3,361 123,298 6,197
Cake Box (Gravesend) Limited (0%) 123,162 (1,021) 116,814 19,060
605,724 25,136 498,314 38,965
======== ======== ======== ========
Mr Pardip Dass 2021 2020
GBP GBP GBP GBP
Sales Balance Sales Balance
Eggfree Cake Box Barking Limited (30%) 242,150 2,840 206,152 6,075
242,150 2,840 206,152 6,075
======== ======== ======== ========
Dr Jaswir Singh 2021 2020
GBP GBP GBP GBP
Sales Balance Sales Balance
Luton Cake Box Limited
(10%) 361,150 7,563 315,243 (996)
Peterborough Cake Box Limited
(30%) 219,363 10,227 187,136 -
Cream Cake Limited (30%) 171,051 6,107 319,432 -
MK Cakes Limited (0%)** 218,676 (3,578) 185,575 -
Bedford Cake Box Limited
(0%)** 145,883 1,432 134,251 -
Chaz Cakes Limited (50%) 161,371 1,231 - -
Eggless Cake Company (50%) 165,623 2,698 - -
1,443,117 25,680 1,141,637 (996)
---------- -------- ---------- --------
* 100% Owned by Mr. Chamdal's daughter
** 100% Owned by Dr Singh's son/daughter
27. Financial instruments
In common with other businesses, the Group is exposed to risks
that arise from its use of financial instruments. This note
describes the Group's objectives, policies and processes for
managing those risks and the methods used to measure them. Further
quantitative information in respect of these risks is presented
throughout these financial statements.
The significant accounting policies regarding financial
instruments are disclosed in note 2.
There have been no substantive changes in the Group's exposure
to financial instrument risks, its objectives, policies and
processes for managing those risks or the methods used to measure
them from previous years unless otherwise stated in this (See Note
28)
The principal financial instruments used by the Group, from
which financial instrument risk arises, are as follows:
Financial Assets
Held at amortised cost
2021 2020
GBP GBP
Cash and cash equivalents 5,125,864 3,676,042
Trade and other receivables 2,058,820 1,113,999
Other financial assets 1,038,812 145,063
8,223,496 4,935,104
------------ -----------
Financial Liabilities
Held at amortised cost
2021 2020
GBP GBP
Trade and other payables 3,111,275 1,286,016
Secured Borrowings 1,485,759 1,614,042
4,597,034 2,900,058
------------ -----------
28. Financial risk management
The Board has overall responsibility for the determination of
the Group's risk management objectives and policies and, while
retaining ultimate responsibility for them, it has delegated the
authority for designing and operating processes that ensure the
effective implementation of the objectives and policies to the
Group's finance function. The board receives regular reports from
the Chief Financial Officer through which it reviews the
effectiveness of processes put in place and the appropriateness of
the objectives and policies it sets.
The overall objective of the Board is to set policies that seek
to reduce risk as far as possible without unduly affecting the
Group's competitiveness and flexibility. Further details regarding
these policies are set out below:
Credit risk and impairment
Credit risk arises principally from the Group's trade and other
receivables. It is the risk that the counter party fails to
discharge its obligation in respect of the instrument. The maximum
exposure to credit risk equals the carrying value of these items in
the financial statements as the group has the power to stop
supplying the customer until payment is received in full.
Definition of default
The loss allowance on all financial assets is measured by
considering the probability of default.
Receivables are considered to be in default when the principal
or any interest is more than 90 days past due, based on an
assessment of past payment practices and the likelihood of such
overdue amounts being recovered.
Determination of credit-impaired financial assets
The Group considers financial assets to be 'credit-impaired'
when the following events, or combinations of several events, have
occurred before the year-end:
-- significant financial difficulty of the counterparty arising
from significant downturns in operating results and/or significant
unavoidable cash requirements when the counterparty has
insufficient finance from internal working capital resources,
external funding and/or group support;
-- a breach of contract, including receipts being more than 240 days past due;
-- it becoming probable that the counterparty will enter bankruptcy or liquidation.
Write-off policy
Receivables are written off by the Company when there is no
reasonable expectation of recovery, such as when the counterparty
is known to be going bankrupt, or into liquidation or
administration. Receivables will also be written off when the
amount is more than 300 days past due and is not covered by
security over the assets of the counterparty or a guarantee.
Impairment of trade receivables and other financial assets
The Group calculates lifetime expected credit losses for trade
receivables and other financial assets using a portfolio approach.
All items are grouped based on the credit terms offered and the
type of product sold. The probability of default is determined at
the year-end based on the aging of the receivables and historical
data about default rates on the same basis. That data is adjusted
if the Group determines that historical data is not reflective of
expected future conditions due changes in the nature of its
customers and how they are affected by external factors such as
economic and market conditions.
In accordance with IFRS 9, the Group performed a year end
impairment exercise to determine whether any write down in amounts
receivable was required, using an expected credit loss model. The
expected loss rate for receivables less than 90 days old is 0% on
the basis of the group's history of bad debt write offs and above
90 days has not been considered on the basis of immateriality.
As at 31 March 2021, the total loss allowances against the
Group's financial assets were immaterial and no charge to the
income statement was recognised.
Liquidity risk
The Group's policy is to ensure that it will always have
sufficient cash to allow it to meet its liabilities when they
become due.
The Board receives cash flow projections on a regular basis
which are monitored regularly. The Board will not commit to
material expenditure in respect of its ongoing development
programme prior to being satisfied that sufficient funding is
available to the Group to finance the planned programmes.
The following table sets out the contractual maturities
(representing undiscounted contractual cash-flows) of financial
liabilities:
Borrowings
2021 2020
GBP GBP
Borrowings - Due within one year 167,754 167,754
Borrowings - Due between one to five years 1,318,005 1,446,288
1,485,759 1,614,042
========== ==========
Trade and other payables
2021 2020
GBP GBP
0 to 30 Days 2,364,512 1,105,254
30 to 60 Days 447,476 45,509
60 to 90 Days 41,348 475
90 to 120 Days 40,300 119,278
120 Days to 1 year 217,639 15,500
3,111,275 1,286,016
========== ==========
Interest rate risk
The Group is exposed to interest rate risk because entities in
the Group borrow funds at both fixed and floating interest rates.
The risk is managed by the Group by maintaining good relationships
with banks and other lending providers and by ensuring cash
reserves are high enough to cover the debt. Where possible fixed
terms of interest will be sought.
The Group analyses the interest rate exposure on a regular
basis. A sensitivity analysis is performed by applying a simulation
technique to the liabilities that represent major interest-bearing
positions. Various scenarios are run taking into consideration
refinancing, renewal of the existing positions, alternative
financing and hedging. Based on the simulations performed, the
impact on profit or loss and net assets of a 25 basis-point shift
(being the maximum reasonable expectation of changes in interest
rates) would be a change of GBP3,714 (2019 - GBP4,035).
Capital risk management
The Group considers its capital to comprise its ordinary share
capital and retained profits as its equity capital. In managing its
capital, the Group's primary objective is to provide return for its
equity shareholders through capital growth and future dividend
income. The Group's policy is to seek to maintain a gearing ratio
that balances risks and returns at an acceptable level and also to
maintain a sufficient funding base to enable the Group to meet its
working capital and strategic investment needs. In making decisions
to adjust its capital structure to achieve these aims, either
through new share issues or the issue of debt, the Group considers
not only its short-term position but also its long-term operational
and strategic objectives.
Details of the Group's capital are disclosed in the Statement of
Changes in Equity.
There have been no other significant changes to the Group's
management objectives, policies and procedures in the year nor has
there been any change in what the Group considers to be
capital.
Currency risk
The Group is not exposed to any significant currency risk. The
Group also manages its currency exposure by retaining its cash
balances in Sterling.
29. Post statement of financial position events
Post year end the Group has declared a final dividend of 3.7p
(2020 - 3.2p per share).
The assets under construction, being the new warehouse in
Coventry, became fully operational in April 2021.
As noted in Note 11 and Note 24, the Group suffered a website
data breach during 2020. Subsequent to the year-end, the Group
notified customers who were potentially impacted and informed the
Information Commissioners Office (ICO) of the breach. We have
recognised a provision of expected fines and associated costs in
respect to this matter.
30. Subsidiary undertakings
The following were subsidiary undertakings of the Company
included in the Group results:
Country of Class
Name incorporation of shares Holding Principal activity
Eggfree Cake Box Franchisor of specialist
Ltd United Kingdom Ordinary 100% cake store
Chaz Ltd United Kingdom Ordinary 100% Property rental company
The above subsidiaries have the same registered office address
as Cake Box Holdings Plc.
31. Notes supporting statement of cashflows
Cash and cash equivalents for the purposes of the statement of
cashflows comprise of:
2021 2020
GBP GBP
Cash at bank available on demand 5,123,796 3,675,981
Cash on hand 2,068 61
5,125,864 3,676,042
========== ==========
There were no significant non-cash transactions from financing
activities (2020 - none).
Non-cash transactions from financing activities are shown in the
reconciliation of liabilities from financing transactions
below:
Non-current Current Total
borrowings borrowings GBP
GBP GBP
As at 1 April 2019 1,937,577 212,183 2,149,760
Cash flows
Repayments (349,494) (186,224) (535,718)
Non-Cash flows:
Non-current loans becoming
current during the year (141,795) 141,795 -
------------ ------------ ----------
As at 31 March 2020 1,446,288 167,754 1,614,042
Cash flows
Repayments - (167,754) (167,754)
Non-Cash flows:
Interest 39,471 - 39,471
Non-current loans becoming
current during the year (167,754) 167,754 -
As at 31 March 2021 1,318,005 167,754 1,485,759
============ ============ ==========
32. Ultimate controlling party
The Group considers there is no ultimate controlling party.
33. Earnings per share
2021 2020
GBP GBP
Profit after tax attributable to the owners
of Cake Box Holdings Plc 3,366,908 3,128,595
=========== ===========
Number Number
Weighted average number of ordinary shares
used in calculating basic earnings per share 40,000,000 40,000,000
=========== ===========
Weighted average number of ordinary shares
used in calculating diluted earnings per
share 40,000,000 40,000,000
=========== ===========
Pence Pence
Basic earnings per share 8.42 7.82
Diluted earnings per share 8.42 7.82*
=========== ===========
*The prior year diluted earnings per share has been corrected to
reflect that performance conditions on share options which have not
been met at the balance sheet date
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END
FR FFFSIRLIAFIL
(END) Dow Jones Newswires
June 30, 2021 02:00 ET (06:00 GMT)
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