TIDMCBOX
RNS Number : 2987T
Cake Box Holdings PLC
14 November 2023
Cake Box Holdings plc
("Cake Box", "the Company" or "the Group")
Unaudited Half Year Results for the six months ended 30
September 2023
Increase in revenues, profits, dividends and cash
Confident outlook, supported by investments in future growth
platforms
Cake Box Holdings plc, the specialist retailer of fresh cream
cakes, today announces its half-year results for the six months
ended 30 September 2023.
Sukh Chamdal, Chief Executive Officer, commented
"We have performed well in the first half of the year,
generating strong growth across key financial metrics and making
further progress on our strategy. We achieved double digit
increases in profits, cash and dividends, as raw material and input
costs stabilised, and we started to benefit from the recent
investments we have made in the business to drive growth.
As outlined in our recent Capital Markets Event, our new website
has increased online sales and improved customer experience and
loyalty, while brand awareness continues to increase as a result of
the success of our marketing campaigns (including national radio)
and multi-channel expansion.
Our franchise proposition remains attractive with nine new
franchise stores opening over the period and a strong pipeline of
future openings. We continue to engage with property consultants to
identify target growth areas, which will help us reach our
400-store target over the medium term. We are also excited to
launch our new Cake Box identity in the second half of the year,
which will broaden the appeal of our brand to new customers and
demographics, amplifying the opportunity for new store
openings.
While we are mindful of the ongoing macro-economic uncertainty,
customer demand remains robust, demonstrating Cake Box's enduring
appeal. We enter the second half with momentum and are on track to
deliver full year performance in line with market expectations. The
Board remains confident in the Company's long-term prospects,
underpinned by our ambitious growth strategy, the attractiveness of
the brand and focused investment programme."
Financial Highlights
Half year Change*
ended Half year %
30 September ended
2023 30 September 2022
Revenue GBP18.0m GBP16.8m 6.8%
-------------- ------------------- --------
Gross profit GBP8.9m GBP8.0m 11.0%
-------------- ------------------- --------
EBITDA** GBP3.1m GBP2.8m 10.4%
-------------- ------------------- --------
Pre-tax profit GBP2.4m GBP2.0m 18.0%
-------------- ------------------- --------
Net cash GBP5.9m GBP4.2m 41.8%
-------------- ------------------- --------
Cash at Bank GBP7.1m GBP5.5m 30.6%
-------------- ------------------- --------
Earnings per share 4.45p 3.72p 19.6%
-------------- ------------------- --------
Interim dividend 2.90p 2.625p 10.5%
-------------- ------------------- --------
*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 6.8% to GBP18.0m (H1 FY23: GBP16.8m).
o Driven by increased volumes from 20 stores opened in the prior
year and 9 new stores opened in the six months to 30(th) September
2023
-- The trading momentum for franchise store sales improved from
the second half of the prior year, with like-for-like sales growth
of 6.2% for the six months ended 30 September 2023.
-- Gross margins increased to 49.6% (H1 FY23:47.7%) due to the
partial easing of input cost increases and enhanced yield benefits
achieved in the distribution centres.
-- Continued balance sheet strength with net cash increasing to GBP5.9m (H1 FY23: GBP4.2m).
-- Interim dividend up 10.5% to 2.9p per share reflecting the
Group's progressive dividend policy and continued strong cash
generation.
Operational highlights
-- Franchise stores in operation increased to 214 as at 30
September 2023 (30 September 2022: 196).
-- Nine new franchise stores added in the period (H1 FY23: 11
new franchise stores), entering new geographies such as Liverpool,
Cambridge and Cheadle.
-- Successful investments in growth platform, including:
o New website launched in June 2023
o Launch of our new CRM system in May 2023
o GBP2m co-funded annual marketing fund agreed with our
franchisees, to drive sales growth, raise brand awareness, broaden
the customer base and evolve the brand
-- Continued innovation for growth through new product development.
o Summer launch of new premium Mango range proved very
popular
-- Effectively managing cost pressures, particularly through established supplier relationships.
Franchise store highlights
-- Franchise store sales up 12.9% to GBP36.1m (H1 FY23 GBP31.8m).
-- Franchise total sales including kiosks up 10.7% to GBP38.5m (H1 FY23 GBP34.8m).
-- Franchisee online sales increased 15.1% to GBP7.7m (H1 FY23: GBP6.7m).
-- Number of multi-site franchisees increased to 46 (H1 FY23: 43).
Current trading and outlook
-- Trading has continued positively post the half year, with
total franchise sales 5.1% ahead in October 2023 compared with the
same period in the prior year and online sales increasing 12.8%
versus last year.
-- On track to deliver a full year performance in line with market expectations.
*Like-for-like: Stores trading for at least one full financial
year prior to 30 September 2023
Webcast recording
A recording of the results presentation webcast will be
available via the following link: https://brrmedia.news/CBOXHYR
For further information, please contact:
Cake Box Holdings plc Enquires via MHP
Sukh Chamdal, CEO
Michael Botha, CFO
Shore Capital (Broker and NOMAD) +44 (0) 20 7408 4090
Stephane Auton
Patrick Castle
Rachel Goldstein
Fiona Conroy (Corporate Broking)
Liberum (Joint Broker) +44 (0) 20 3100 2000
Edward Thomas
Dru Danford
MHP Communications (Financial PR) +44 (0) 7834 623818
Charlie Barker cakebox@mhpc.com
Robert Collett-Creedy
Hugo Harris
Operational and Financial Review
Strong first half performance
Our trading momentum continued through the first half of the
year, with revenue growth of 6.8% and an increase in total
franchise store sales of 12.9%, reflecting the strength of our
proposition and continued robust customer demand. Franchise store
like-for-like sales were up 6.2% (H1 FY23: down 1.6%) for the first
half of the new financial year, compared to 3.4% H2 FY23.
In June 2023, we launched our new website and at the same time
invested in expanding our marketing team, which has helped to
increase our online sales by 15.1% year on year. Our new website is
delivering a consistent increase in online sales month on month.
Our new site improves our position by giving our customers a better
user experience and in doing so, increases conversion rate and
customer loyalty. The site is data driven and automated to deliver
bespoke marketing campaigns to increase customer lifetime
value.
New product development once again played a vital role in our
strong trading performance, with the launch of our new premium
Mango range, proving very popular amongst our customers. The
release of new premium ranges continues to support our franchisee's
ability to grow their margins through pricing.
Strategic progress with franchisee funding and marketing
initiatives
During the period, we created a GBP2m co-funded annual marketing
fund with our franchisees to drive brand awareness, broaden the
customer base and evolve the brand. The fund will be utilised with
the aim of creating the leading multi-channel cake business in the
UK. A large proportion of the fund is being allocated for digital
and social media marketing, and we are making good progress as we
build on Cake Box's already strong 40% brand awareness. Both our
national radio advertising campaigns, which went live in September
2023, and our outdoor advertising have been favourably received by
our customers, driving increased demand.
Customer data is becoming central to our marketing strategy, and
we have experienced strong growth since launching our new CRM
system in May 2023. Our marketing database grew by 50%, from 200k
to 300k in the five months to 30 September 2023, while our new SMS
subscriptions went from zero to 80k in the same period. We expect
our database to significantly increase as the investments we have
made continue to deliver greater awareness and appeal.
Continued expansion in the franchise store estate
The confidence of our franchisees in our proposition continues
with the opening of a further nine franchise stores during the
period, despite the sharp rise in UK base interest rates. As a
result, the total number of stores at 30 September 2023 rose to 214
(H1 FY23: 196).
New locations added in the period include Liverpool, Cambridge
and Cheadle, where we have identified compelling growth
opportunities and anticipate strong customer demand.
We now have 95 franchisees with 46 of them owning more than one
store, with these multi store franchisees operating a total of 165
sites out of the total 214 stores. We continue to identify growth
franchisees who are performing well and are ambitious, harnessing
their entrepreneurial skills and supporting them in taking on
additional sites.
Demand for new stores remains high, with 44 deposits held at the
end of the period. Of these 44 deposits, 20 are from existing
franchisees. As outlined at our recent Capital Markets Event, we
continue to engage with our property consultants and franchisees as
we identify new attractive target geographies to enhance
growth.
Gross margin improvement
During the half-year, we saw a reduction and stabilisation of
certain input costs, most noticeably in fuel and utility prices,
which will benefit both franchisees and our Group profitability.
This, coupled with the actions we have taken to improve efficiency
in the business, supported a rise in our gross margin to 49.6% and
an 18.0% increase in profit before tax.
Although our pricing strategy remains continually under review,
we have been mindful to not increase pricing to our franchisees and
likewise to their customers and maintain the value proposition,
during the current period of heightened cost-of-living
challenges.
Invested for growth opportunities
Since our IPO we have invested GBP7.7m, primarily on expanding
and enhancing our production, warehousing and distribution
capabilities. During that time, we have also focused on enhancing
our IT and e-commerce to capitalise on our significant growth
opportunities.
In addition, we have strengthened our management team, as well
as bolstering the teams within the business, who will all be
integral in delivering our strategy. These changes implemented
across the 2023 financial year and the first half of the current
year, have resulted in a planned increase in administration costs
in the period to GBP6.4m (H1 FY23: GBP5.9m).
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 GBP7.1m, up 30.6% from the same point last year, which is
post paying a final dividend of GBP2.2m in August 2023. The Group's
net cash position increased, by 41.8% to GBP5.9m (H1 FY23:
GBP4.2m).
Dividends
In line with our progressive dividend policy which reflects our
cash generation, earnings progression and confidence in our
outlook, today we are declaring an interim dividend of 2.9 pence
per share representing an increase of 10.5% from last year. The
interim dividend will be paid on 15 December 2023 to those
shareholders on the register at the close of business on 24
November 2023. The ex-dividend date is therefore 23 November
2023.
Board update
On 30 October 2023, the Board was delighted to announce the
appointment of independent Non-Executive Director, Martin Blair as
Non-Executive Chairman of the Company. He replaced Nilesh ("Neil")
Sachdev who, after more than five years in the role, stepped down
from the Board on 31 October 2023 to concentrate on his growing
commitments outside of Cake Box.
Martin has a deep knowledge of Cake Box and its strategy, having
sat on the Board as an Independent Non-Executive Director and chair
of the Audit Committee, since the Company was admitted to trading
on the AIM market of the London Stock Exchange in June 2018.
As announced at the same time, another of the Company's
independent Non-Executive Directors, Adam Batty, was appointed to
the role of Senior Independent Director. The Board has initiated a
process to recruit a new independent Non-Executive Director to
chair the Audit Committee. A further announcement will be made in
this regard in due course. Until such time, Martin will continue to
chair the Audit Committee.
Outlook
The investments made in our business continue to make a positive
impact, with our marketing campaigns and improvements in digital,
increasing brand awareness and driving online sales growth. This
has supported ongoing trading momentum into H2 2024, with total
franchise sales 5.1% ahead in October 2023.
Our engagement with property consultants and franchisees to
identify target growth areas for new openings is progressing well
and we are confident of reaching our medium-term store estate
targets.
Cake Box's proposition continues to evolve, with an exciting
range of new products in development and the launch of our new
brand identity set for the second half, which will broaden the
appeal of the Cake Box brand.
Whilst we remain mindful of the ongoing macro-economic
challenges, consumer demand remains robust, and the Group's is on
track to deliver a full year performance in line with market
expectations. The Board remains confident in Cake Box's long term
growth potential, underpinned by its attractive customer and
franchisee proposition, strong balance sheet and ongoing investment
in the business.
CAKE BOX HOLDINGS PLC
UNAUDITED CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME FOR THE
SIX MONTHSED 30 SEPTEMBER 2023
-------------------------------------------------------------------------------------------
6 months to 6 months to 12 months to
30 September 30 September 31 March
2023 2022 2023
(unaudited) (unaudited) (audited)
----- --------------- --------------- --------------
Note GBP GBP GBP
----- --------------- --------------- --------------
Revenue 2 17,960,580 16,822,209 34,800,941
Cost of Sales (9,047,974) (8,791,924) (17,626,671)
--------------- --------------- --------------
Gross profit 8,912,606 8,030,285 17,174,270
Administrative Expenses (6,454,032) (5,933,111) (11,595,228)
--------------- --------------- --------------
Operating Profit 2,458,574 2,097,174 5,579,042
Finance income 44,130 6,711 25,019
Finance expenses (107,593) (73,839) (160,494)
--------------- --------------- --------------
Profit before income tax 2,395,111 2,030,046 5,443,567
Income tax expense (615,344) (541,563) (1,206,896)
PROFIT AFTER INCOME TAX 1,779,767 1,488,483 4,236,671
OTHER COMPREHENSIVE INCOME
FOR THE PERIOD
Items that will not subsequently
be classified to profit or
loss
- Revaluation of freehold
property - - 187,665
-Deferred tax on revaluation
of freehold property - - (35,656)
Total other comprehensive
income for the period - - 152,009
TOTAL COMPREHENSIVE INCOME
FOR THE PERIOD 1,779,767 1,488,483 4,388,680
EARNINGS PER SHARE - pence
Basic 5 4.45 3.72 10.59
Diluted 5 4.45 3.72 10.59
----- --------------- --------------- --------------
CAKE BOX HOLDINGS PLC
UNAUDITED CONSOLIDATED STATEMENT OF FINANCIAL POSITION AS AT
30 SEPTEMBER 2023
6 months 6 months 12 months
to to to
30 September 30 September 31 March
2022 -
2023 as restated 2023
(unaudited) (unaudited) (audited)
Note GBP GBP GBP
----- -------------------- -------------------- ------------------
ASSETS
Non-current assets
Intangible assets 480,924 107,273 399,186
Property, plant and equipment 11,095,006 10,973,813 11,267,783
Right-of-use assets 2,424,520 2,724,460 2,574,490
Other financial assets 562,931 595,314 508,532
14,563,381 14,400,860 14,749,991
Current Assets
Inventories 2,426,905 2,577,643 2,790,724
Trade and other receivables 2,188,484 2,962,332 2,683,621
Other financial assets 364,412 252,488 245,880
Cash and cash equivalents 7,135,660 5,464,364 7,353,583
12,115,461 11,256,827 13,073,808
TOTAL ASSETS 26,678,842 25,657,687 27,823,799
-------------------- -------------------- ------------------
EQUITY AND LIABILITIES
EQUITY
Issued share capital 4 400,000 400,000 400,000
Capital redemption reserve 40 40 40
Revaluation reserve 3,786,743 3,616,383 3,786,743
Retained earnings 13,132,338 12,209,822 13,552,572
EQUITY attributable to the owners
of the parent company 17,319,121 16,226,245 17,739,355
Current liabilities
Trade and other payables 3,116,420 2,996,742 3,766,413
Lease liabilities 275,224 213,963 270,117
Short-term borrowings 96,295 167,754 104,498
Current tax payable 401,736 749,834 294,262
Provisions 243,100 243,100 243,100
-------------------- -------------------- ------------------
4,132,775 4,371,393 4,678,390
-------------------- -------------------- ------------------
Non-current liabilities
Lease liabilities 2,290,940 2,617,568 2,429,838
Borrowings 1,092,082 1,101,223 1,132,292
Deferred tax liabilities 1,843,924 1,341,258 1,843,924
-------------------- -------------------- ------------------
5,226,946 5,060,049 5,406,054
-------------------- -------------------- ------------------
TOTAL LIABILITIES 9,359,721 9,431,442 10,084,444
-------------------- -------------------- ------------------
TOTAL EQUITY & LIABILITIES 26,678,842 25,657,687 27,823,799
-------------------- -------------------- ------------------
CAKE BOX
HOLDINGS PLC
UNAUDITED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY FOR THE SIX MONTHSED
30 SEPTEMBER 2023
Capital As restated
Share redemption Revaluation - Retained
capital reserve reserve earnings Total
GBP GBP GBP GBP GBP
---------------
At 1 April
2022 400,000 40 3,634,734 12,475,030 16,509,804
Adjustment to
asset lives* - - - 330,812 330,812
Deferred tax
on adjustment
to
asset lives - - - (62,854) (62,854)
At 1 April
2022 - as
restated 400,000 40 3,634,734 12,742,988 16,777,762
Total
comprehensive
income for
the period - - - 1,488,483 1,488,483
Transfer of
excess
depreciation
on revalued
assets - - (18,351) 18,351 -
Dividends paid - - - (2,040,000) (2,040,000)
At 30
September
2022 400,000 40 3,616,383 12,209,822 16,226,245
Total
comprehensive
income - - - 2,748,188 2,748,188
Revaluation of
freehold
property - - 187,665 - 187,665
Deferred tax
on
revaluation
of
freehold
property - - (35,656) - (35,656)
Tax rate
changes - - - (337,088) (337,088)
Transfer of
excess
depreciation
on revalued
assets - - 18,351 (18,351) -
Dividends paid - - - (1,050,000) (1,050,000)
At 31 March
2023 400,000 40 3,786,743 13,552,571 17,739,354
Total
comprehensive
income - - - 1,779,767 1,779,767
Dividends paid - - - (2,200,000) (2,200,000)
At 30
September
2023 400,000 40 3,786,743 13,132,338 17,319,121
---------------
* During the prior financial year, the Directors reviewed the fixed assets
category and made adjustments to change the asset lives of various assets
and determined that some assets were still being used by the business
despite being almost fully depreciated.
--------------------------------------------------------------------------------------------------------------------------- --------------------------
CAKE BOX HOLDINGS PLC
UNAUDITED CONSOLIDATED CASH FLOW STATEMENT FOR THE SIX MONTHSED 30 SEPTEMBER 2023
6 months 6 months 12 months
to to to
30 September 30 September 31 March
2023 2022 2023
(unaudited) (unaudited) (audited)
GBP GBP GBP
--------------- ------------
Cash flows from operating activities
Profit before income tax 2,395,111 2,030,046 5,443,567
Adjusted for:
Depreciation 421,366 520,309 777,571
Depreciation of right-of-use assets 149,970 149,970 299,940
Amortisation of intangible assets 53,504 26,035 54,110
Profit on disposal of tangible fixed
assets - (34,204) (50,733)
Decrease/(Increase) in inventories 363,819 (108,722) (321,803)
Decrease/(Increase) in trade and other
receivables 495,137 (409,123) (360,950)
(Increase)/decrease in other financial
assets (172,932) 219,804 263,307
(Decrease)/Increase in trade and other
payables (649,993) 335,371 1,105,042
Increase in provision - - 280,425
Share based payment provision - - -
Finance income (44,130) (6,711) (25,019)
Finance expense 151,723 73,839 160,494
--------------- ------------
Cash generated from operations 3,163,575 2,796,614 7,625,951
Taxation paid (507,876) (350,100) (1,341,087)
--------------- ------------
Net cash inflow from operating activities 2,655,699 2,446,514 6,284,864
Cash flows from investing activities
Proceeds from sale of property, plant
and equipment - 34,204 61,003
Purchase of property, plant and equipment (383,825) (1,267,412) (1,961,233)
Finance income 44,130 6,711 25,019
--------------- ------------
Net cash flows from investing activities (339,695) (1,226,497) (1,875,211)
--------------- ------------
Cash flows from financing activities
Repayment of finance leases (133,792) (128,618) (260,192)
Repayment of borrowings (48,412) (84,754) (116,942)
Dividends paid (2,200,000) (2,040,000) (3,090,000)
Finance expense (151,723) (73,839) (160,494)
--------------- ------------
Net cash flows from financing activities (2,533,927) (2,327,211) (3,627,628)
--------------- ------------
Net increase in cash and cash equivalents (217,923) (1,107,194) 782,025
Cash and cash equivalents brought forward 7,353,583 6,571,558 6,571,558
--------------- ------------
Cash and cash equivalents carried forward 7,135,660 5,464,364 7,353,583
=============== =============== ============
CAKE BOX HOLDINGS PLC
NOTES TO THE INTERIM ACCOUNTS
FOR THE SIX MONTHS ENDED 30 SEPTEMBER 2023
1.Notes to the Interim Report
Basis of preparation
The consolidated half-yearly financial statements do not
constitute statutory accounts within the meaning of Section 434 of
the Companies Act 2006. The statutory accounts for the year ended
31 March 2023 have been filed with the Registrar of Companies at
Companies House. The auditor's report on the statutory accounts for
the year ended 31 March 2023 was unqualified, did not include any
matters to which the auditor drew attention by way of emphasis and
did not contain any statements under Section 498 (2) or (3) of the
Companies Act 2006.
The published financial statements for the year ended 31 March
2023 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.
The consolidated annual financial statements of Cake Box
Holdings Plc for the year ended 31 March 2024 will be prepared in
accordance with IFRS. Accordingly, these interim financial
statements have been prepared using accounting policies consistent
with those which will be adopted by the Group in the financial
statements for the year ended 31 March 2024, but do not contain all
the information necessary for full compliance with IFRS.
The consolidated half-yearly financial statements for the six
months to 30 September 2023 have not been audited or reviewed by
auditors.
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.
Basis of consolidation
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 12 months
to to to
30 September 30 September 31 March
2023 2022 2023
(unaudited) (unaudited) (audited)
GBP GBP GBP
------------------------- ------------------------
Sales of sponge 7,385,751 6,170,612 13,631,930
Sales of food 3,151,169 2,930,966 5,870,607
Sales of fresh cream 2,083,960 1,761,069 3,976,694
Sales of other goods 3,700,104 3,686,104 7,454,354
Online sales commission 546,021 487,168 1,001,192
Franchise packages 969,055 1,786,290 2,866,164
Marketing Levy 124,520 - -
17,960,580 16,822,209 34,800,941
3.Dividends
6 months to 6 months to 12 months to
30 September 30 September 31 March
2023 2022 2023
(unaudited) (unaudited) (audited)
GBP GBP GBP
--------------- --------------
Dividends paid 2,200,000 2,040,000 3,090,000
--------------- --------------
4.Share Capital
6 months 12 months
to 6 months to to
30 September 30 September 31 March
2023 2022 2023
(unaudited) (unaudited) (audited)
GBP GBP GBP
-------------------------------- -----------------------
40,000,000 Ordinary Shares
of GBP0.01 400,000 400,000 400,000
-------------------------------- -----------------------
5.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 12 months
to 6 months to to
30 September 30 September 31 March
2023 2022 2023
(unaudited) (unaudited) (audited)
Pence Pence Pence
------------------------------------ --------------------------
Basic earnings
per share 4.45 3.72 10.59
Diluted earnings
per
share 4.45 3.72 10.59
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