Latest financial results for Cake Box has the egg-free cake specialist delivering robust growth in revenues and profits, driven by increased franchise store sales, new store openings, and enhanced efficiencies.
In its full year accounts for the 12 months ended 31 March 2024, the company reported that group revenue was up by 8.7% to £37.8m. Like-for-like sales rose by 4.4%, compared to 1% growth posted the previous financial year.
Cake Box added 20 shops to its estate over the 12-month period – including new openings in Liverpool, Cambridge, and Didsbury – to reach a total of 225 franchises. The number of multi-site franchisees also increased to 47.
The company described these results as a very positive outcome considering the continued challenging economic and tough consumer environment, with high inflation and interest rates impacting on consumer’s disposable income.
As predicted in its trading update, profits for the year were ahead of market expectations. Enhanced efficiencies in its production facilities and the stabilisation of raw material and freight costs helped lift adjusted profit before tax to £6m, an improvement of 10.6% on FY23.
Gross margin went up from 49.4% to 52.7%, although the company noted that this had been slightly inflated by the national marketing levy revenue in FY24, which puts associated costs into administrative expenses. Franchisees help co-fund an annual marketing budget for Cake Box.
The firm also reported a 16.1% growth in online sales to £16.1m, driven by strategic investments in a new website and CRM system. New products launched during the year included Premium Mango and Speculoos caramelised biscuit ranges, while branding at stores was also refreshed to its new purple text on pastel shades.
“It has been a successful year for Cake Box delivering robust growth across all areas of our business,” commented Cake Box CEO Sukh Chamdal. “We look forward to building on this momentum, continuing to expand our store estate, and further solidifying Cake Box as the go-to destination for fresh cream celebration cakes.”
Whilst expecting the trading environment for FY25 to be challenging with the continuing uncertain macro-economic conditions, the company said its sales performance remained robust with trading so far this year in line with management expectations.
In his first statement as non-executive chairman, Martin Blair said Cake Box was well-positioned to capitalise on anticipated market trends in the celebration cakes and sweet baked goods segments. “There are many exciting opportunities for growth ahead for the business and we are committed to continue to produce high quality products that resonate with our customers,” he added.
Blair also noted the firm remained steadfast in its commitment to growth, saying “our ambitious target of reaching 400 stores in the medium term underscores our confidence in the scalability and resilience of our business model”.
Cake Box retained its ninth position in the Top 75 out-of-home businesses listed in the Bakery Market Report 2024, but would need to add more than 100 new stores to catch up with eighth placed BP Wild Bean Cafe.
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