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Egg-free cake chain Cake Box has posted a rise in annual sales and profits as it continues to grow its store estate and drive organic growth.

Reported group revenue for the year to 31 March 2024 increased by 8.7% to £37.8m.

This growth was achieved through an increase in franchise store like-for-like sales of 4.4%, as well as the addition of 20 new franchise stores in the year.

Cake Box said this was a “very positive outcome”, considering the continued challenging economic and tough consumer environment, with high inflation and interest rates affecting consumers’ disposable income.

Total number of franchise stores across the UK grew to 225 in the period, with new locations added including Liverpool, Cambridge and Didsbury.

The brand also posted 16.1% growth in online, to grow digital sales to £16.1m.

Cake Box also said that strategic investment supported sales growth, including a brand refresh, a new website and customer relationship management and a co-funded annual marketing fund with franchisees.

It also launched a number of new products in the period, including premium mango and speculoos caramelised biscuit ranges.

Gross profit as a percentage of group revenue increased from 49.4% to 52.7% for the full year.

This increase was as a result of the efficiencies gained from investments in the production facilities in prior years and the stabilisation of raw material and freight costs during the year.

It said this meant it was able to keep retail sales price increases to a lower rate than the food retail sector, as in the prior year, while not affecting volumes.

Reported EBITDA increased 15.6% to £7.7m as a result of the increased group revenues, with progression in gross margins offset by the planned increase in overheads.

Adjusted EBITDA increased by 12% to £7.5m for the year due to the reversal of a £0.2m provision created in prior years for a website data breach, which has been classified as an exceptional item now that the matter has been closed.

Since the close of its financial year, the group said sales performance continued to be robust, with trading so far in line with management expectations.

While it admitted the trading environment for 2025 was expected to be “challenging with the continuing uncertain macro-economic conditions”, it said the opening of new stores, investment in marketing, alongside a brand refresh rollout and new website, would “help drive demand”.

CEO Sukh Chamdal commented: “It has been a successful year for Cake Box, delivering robust growth across all areas of our business. Our strategic initiatives, including new store openings, enhanced marketing campaigns, and innovative product launches, have driven a 9% increase in revenues. We are pleased to have delivered full-year EBITDA ahead of market expectations and to have also further strengthened our balance sheet.

“The launch of our new CRM system, e-commerce website, and brand refresh, along with the success of our increased investment in marketing, has enhanced our brand awareness and customer experience, improving our presence and helping to drive up demand.

“Our success is a testament to the dedication of our team, the franchisees, and the loyalty of our customers. 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.”

Cake Box shares are up 1.8% to 178.2p this morning.

Morning update

On the markets this morning, the FTSE 100 is up 0.2% to 8,240.6pts.

Risers include Naked Wines, up 3.3% to 63p, B&M European Value Retail, up 1.6% to 496.1p and SSP Group, up 1.5% to 166.4p.

Fallers include Science in Sport, down 1% to 18.6p, Kerry Group, down 2.9% to €76.80 and McBride, down 3.5% to 113.9p.

Yesterday in the City

The FTSE 100 opened the week down 0.2% to 8,228.5pts.

The day’s fallers yesterday included Glanbia, down 5% to €17.44, Fever-Tree Drinks, down 3.5% to 1,038p, DS Smith, down 2.5% to 361p, Diageo, down 2.4% to 2,607p and Haleon, down 2.1% to 323p.

Risers yesterday included SSP Group, up 3.3% to 164p, Just Eat, up 3.1% to 1,054p, Nichols, up 2.5% to 1,030p, McBride, up 2.2% to 118p, Deliveroo, up 1.7% to 135.5p and C&C Group, up 1% to 158p.