Egg-free cake specialist Cake Box Holdings has said relatively low levels of rent and overheads will help its franchisee businesses recover from the impact of coronavirus.
In a trading update for the full year ended 31 March 2020, Cake Box reported 5.1% sales growth through its franchised stores in the period to 8 March.
However, the impact of government social distancing measures – resulting in Cake Box closing its franchise stores to protect staff, franchisees and customers – meant sales through stores rose 2% for the full year to 31 March.
The company said it expected to report £18.7m revenue for the year, up around 10% year on year despite the disruption from coronavirus. Adjusted profit before tax was expected to be between £4.1m and £4.3m, up slightly on the £4m reported in 2019.
Cake Box said it was “exploring all possible routes” to support franchisees during the coronavirus crisis. It is helping them apply for the government’s Retail, Hospitality and Leisure Grant, and giving advice and assistance on furloughing staff while providing payment flexibility where appropriate.
“As a result of the above, noting that our franchise stores have relatively low levels of rent and overheads, we are very confident our franchisees will be able to navigate this unprecedented period,” stated the company.
Cake Box added it is had good stock levels and was well placed to support the reopening of its franchise stores as soon as government advice allowed.
The business has furloughed some head office, warehouse and bakery staff and is also taking other cost-saving measures.
"Our first priority remains the health, safety and wellbeing of our colleagues, franchisees, customers and the communities in which we operate across the country,” said Cake Box CEO Sukh Chamdal.
“While this is an uncertain and difficult time for the country, we are incredibly proud of the efforts of our franchisees, who have been sending thousands of our cakes to front-line workers to give them a slice of comfort during these challenging times.
"While the current closure of our franchise stores has and will continue to have an impact on performance, we are confident that our unique customer offer will continue to resonate over the long term. Life is somewhat on hold for now, but when we emerge from this, we will still have birthdays, marriages and numerous other occasions – small and large – to celebrate up and down the country.”
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