Cake Box

Source: Cake Box

Cake Box is predicting its full year profits to be ‘slightly ahead of market expectations’ due to an enhanced marketing strategy and further estate expansion.

In its full-year trading update for the 12 months ended 31 March 2024, the egg-free cake specialist said it was expecting to report revenues up by around 9% compared to the £34.8m from FY23.

After reporting 6.8% sales growth for the first half of its financial year, Cake Box revealed it had continued this ‘increasing momentum’ for the rest of the year with 20 store openings and new products launches including vegan buttercream, speculoos, and brownie ranges.

It had also improved online sales after unveiling a new e-commerce website last June, with its ‘click and collect’ feature increasing in popularity, it noted.

Continued stabilisation in the cost of raw materials during the year, further efficiency benefits from previous investment, and increased revenues combine to see adjusted profits being slightly ahead of forecasts, it said.

Cake Box new branding on store

Source: Cake Box

New store branding

Cake Box also heralded the success of its enhanced marketing strategy and capability that had helped to grow its brand awareness, customer experience and loyalty. This included a brand identity refresh in the second half, which saw a switch from vibrant orange and purple to more pastel shades. Nine stores currently carry this new branding.

A focus on digital performance marketing, facilitated by a national advertising fund recently established with the Group’s franchisees, are helping to deliver an improved customer experience, higher retention, and attract new customers to the Cake Box brand, it added.

Franchisee stores were said to be performing well and were expected to grow like-for-like sales by 4.4% from the previous year. Eleven new stores were added during the second half to bring its total estate to 225.

Cake Box said it was progressing well towards reaching its long-term target of 400 stores, with strong demand for new locations remaining among its existing franchise base as well as from prospective new franchisees. External property consultants had been appointed to develop a strategy to achieve its estate ambition, with target areas identified.

“We are delighted to have delivered a year of solid growth in all our key performance areas and full year profits slightly above expectations despite the backdrop of uncertain macroeconomic conditions,” said Cake Box co-founder and CEO Sukh Chamdal.

“We expect to report an increase in all key financial metrics, an uptick in sales of products online including our ‘click and collect’ offer as well as in-store sales and an increased number of franchise stores. We are very pleased with the feedback from the launch of the new Cake Box brand identity from our customers, which will continue to bring new customers to experience our wonderful products.

“I am confident that with our strengthened senior management team and investment in our operations and processes, as well as our dedicated and determined franchisees, we will continue to grow the Cake Box customer base and brand,” Chamdal added.

Recent senior appointments include Martin Blair as non-executive chairman and Shaun Smith as independent non-executive director.