Cake box

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Cake Box has lifted profits ahead of market expectations thanks to a renewed marketing push, a brand refresh and a new online store.

The retailer of fresh cream celebration cake said in a full-year trading update this morning that it expected sales to be up 9% in the 12 months to 31 March 2024.

Cake Box added that it entered the second half with increasing momentum, which continued for the rest of the year with further new store openings, positive sales growth from the enhanced marketing campaigns, higher online sales, including an increasingly popular click & collect feature, and new products being launched.

The group also benefited from the continued stabilisation in the cost of raw materials during the year, resulting in adjusted profits being slightly ahead of forecasts.

Franchisee stores continued to perform “well” with like-for-like sales expected to show a rise of 4.4% year on year.

Cake Box said the demand for new stores remained strong among the group’s existing franchisee base, as well as new enquiries from prospective franchisees.

The engagement with external property consultants, appointed to develop a strategy for Cake Box to reach its 400-store long-term target, had progressed well and target areas for new stores had been identified, it added.

During the year, the group added 20 new stores to take its estate to 225.

Co-founder and CEO Sukh Chamdal said: “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.

“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.”

Morning update

The FTSE 100 started the week on the backfoot, falling 0.1% to 7,900.11pts.

Shares in Cake Box jumped 8.7% to 175p thanks to the profits upgrade this morning.

Other early risers included Bakkavor, up 1.2% to 112.9p, Deliveroo, up 1.2% to 130.6p, and WH Smith, up 0.2% to 1,311p.

Glanbia is down 3.3% to €17.34 so far, with Virgin Wines down 3.1% to 45.1p and Kerry Group down 2.3% to €77.40.

This week in the City

It remains fairly quiet on the markets as the Easter holidays continue but the big news this week is the annual results of retail giant Tesco on Wednesday.

Chief executive Ken Murphy upgraded bottom-line guidance in the recent Christmas update, with adjusted retail operating profit now expected to be £2.75bn.

Tomorrow brings the latest retail sales data from the BRC and KPMG, while Barclay releases the latest consumer card spending report.

Tobacco firm Imperial Brands also updates the markets tomorrow on its first-half performance.