A lady takes a cake from a display shelf at a Cake Box store.

Source: Cake Box

Revenue at egg-free cake specialist Cake Box has risen by around 5% owing to an improved performance in the second half of the year.

In a full-year trading update, the business said new store openings and positive like-for-like sales meant revenue had increased compared to the £33m reported for the 12 months to April 2022. This, it added, was despite tough comparatives from the previous term including lockdown restrictions.

Ten new sites were added in the second half of the year, including Oxford, Kettering, and Banbury. This followed the ten that opened in the first half, and the 24 new stores inaugurated during the 2022 financial period. As of the end of March, the total number of Cake Box stores was 205.

Adjusted profit before tax is expected to be in line with market expectations, but the firm added that margins had seen a ‘marginal improvement’ as the cost of raw materials stabilised in the second half of the year, primarily due to reduced freight rates.

Cake Box had previously warned that full-year profitability would be ‘significantly below’ market expectations due to the worsening outlook and increasing cost pressures on consumers.

Franchisees, it said in the latest update, continued to face inflationary pressures but several measures had been introduced to mitigate the impact of increased costs. With the help of ‘effective marketing initiatives’, sales and margin levels were maintained.

A ‘highly selective’ approach to price increases had also resulted in improved customer retention, while ensuring new customers were still being attracted to the brand, it added.

“Just as during the pandemic, we have faced an unprecedented set of circumstances this year, with the war in Ukraine causing a rise in energy and raw material prices and a cost-of-living crisis impacting consumer confidence,” said Cake Box co-founder and CEO Sukh Chamdal.

The company declared its balance sheet remained strong, with a significant increase in the group’s net cash position – £6.3m at period end compared with £5.2m at the end of the 2022 financial year.

“We continue to strengthen our team and invest in our operations and processes, and with the dedication, determination and commitment of our staff and franchisees we continue to grow the Cake Box customer base and brand,” added Chamdal.