Cake Box reveals record annual sales on back of surging online franchisee demand and store openings
- Cake Box expects full-year pre-tax earnings to be in line with market forecasts
- The East London-based business added 31 more shops during the fiscal year
- Sukh Chamdal co-founded the company with his cousin Pradip Dass in 2008
Cake Box has hailed another record year of sales after significantly expanding its online trade and store estate.
The vegetarian-friendly cream cake maker said it expects to record adjusted pre-tax earnings in line with market forecasts alongside a hike in revenues of about half for the 12 months to the end of March.
Excluding the first two months of this period and the impact of the first nationwide Covid-19 lockdown in England two years ago, the company forecasts sales have jumped by around a third.
Strong results: The vegetarian-friendly cream cake maker said it expects to record adjusted pre-tax earnings in line with market forecasts for the 12 months to the end of March
Demand for the firm’s range of egg-free cakes and confectionery items has continued to be driven by high store trade and soaring online franchisee orders, which the group noted grew by about 41 per cent during the year.
While this has happened, the East London-based business has added 31 more shops, including 11 new franchise outlets over the last six months in cities such as Sunderland and Plymouth, meaning it now has 185 stores in total.
On top of this, Cake Box has 15 kiosks inside Asda establishments as part of a trial with the supermarket giant and another 20 kiosks across shopping centres, including Manchester’s Arndale and Trafford centres.
Cake Box said there is considerable demand for new stores amongst current and prospective franchisees, with 53 holding deposits as of the last month.
Sukh Chamdal, chief executive, said: ‘We have delivered another record performance for the year, demonstrating the continuing appeal of our customer and franchisee proposition. Our strategy to reach customers across the UK is starting to deliver.
He added that the group’s results were ‘thanks to the dedication, determination and commitment of the exceptional entrepreneurs in our Cake Box Family.’
Chamdal co-founded the firm with his cousin Pradip Dass during the height of the global financial crisis in 2008 after his daughter asked him for a cake that contained no eggs.
All of the group’s products remain free of eggs, alcohol and meat, making it very popular with vegetarians and those who follow strict dietary requirements for religious or ethical reasons.
After listing on the junior AIM exchange in 2018, its share price remained flat for a while before jumping in 2021 as the group’s cakes escalated in popularity.
But in late January this year, its share price took a massive tumble after a retail investor blogger discovered errors in the company’s annual report, such as a ‘phantom £2million’ in the cash flow statement.
The firm admitted there had been ‘some transcription errors’ in the report as well as ‘inconsistencies in prior period inventory reporting,’ and hired accountancy firm BDO to enhance its reporting practices.
Cake Box shares jumped 7.5 per cent to £2.07 in early trading this morning, making it one of the top 15 risers on the AIM All-Share Index, although their value has still declined by 46 per cent since the start of the year.