Cake Box CEO Sukh Chamdal expressed pride and optimism after the company posted double-digit revenue growth for the third year running.
Full year results for the egg-free cake business showed group revenue grew 16.9% to £21.9m in the 12 months up to 31 March 2021. Gross profit was £10.9m, up 23.8% from 2020, and the company’s balance sheet showed £5.1m cash in the bank, representing a year-on-year rise of 37.8%.
“Looking back to what we’ve achieved over the last 12 months, I am both incredibly proud of the Cake Box Family and optimistic for the future,” said Chamdal.
“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,” he added.
The 12-month trading period saw several significant developments at Cake Box, including the opening of 24 new franchise stores as well as operations kicking off at a new bakery and distribution centre in Coventry.
The company unveiled new products including egg-free custard and additions to its vegan and gluten-free options. It also launched its own delivery platform to complement third-party delivery and click-and-collect offerings.
Online sales grew 84% during the year but the company was hit by a malware attack on its website in 2020, impacting the payment system and resulting in a data breach. Following this, exceptional provision of £486,000 was made for GDPR fines and related costs. Once this was taken into consideration, adjusted pre-tax profit stood at £4.7m, up 24.8% on the previous year.
“We take the security of our customers’ personal information extremely seriously and took appropriate action to secure the website,” said Neil Sachdev, Cake Box chairman.
“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,” he added.
Cake Box had 157 franchise stores in operation at the end of the trading period. Franchisee total turnover was up by 17% to £42.7m, while franchisee online sales grew 71% to £9.4m. While stores were closed for six weeks at the start of the pandemic, they reopened after the first lockdown and have continued to serve customers since then.
The company has set up a franchisee support loan fund while Covid-19 affects the availability of commercial loans, Sachdev explained.
“These loans typically amount to a £50,000 contribution to new franchise store start-up costs and to date, Cake Box has loaned around £890,000 to 16 franchisees,” he said. “The board has set a limit of £1.5m that can be provided in aggregate as loans to franchisees through the franchisee support fund.”
Sachdev added that he had “never been more excited by the group’s prospects”. Chamdal, who earlier this year discussed Cake Box’s origins and operations in an interview with British Baker, also struck a positive tone, commenting that “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”.