Cake Box CEO Sukh Chamdal

Cake Box CEO Sukh Chamdal

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Profits have more than doubled at Cake Box as customers flooded back to its stores after the end of lockdown.

Revenues in the six months to 30 September jumped 91.8% to £16.5m, with the retailer of fresh cream cakes reporting strong demand from shoppers in store and online.

The group also signed up 20 new franchisees in the period to take the estate to 174 strong at the end of the half.

Cake Box also announced this morning that it had extended its relationship with Asda following a successful trial of kiosks in seven stores. The business has opened four more kiosks since the 30 Septemeber and plans to roll out more during the remaining of the financial year.

EBITDA at the group soared 109% to £4.1m, while pre-tax profits leapt 122% to £3.7m.

The company also flagged that it had suffered no disruption from the supply chain shortages plaguing the market, with several months of ingredients in stock.

It added it was confident in meeting its full-year growth expectations.

CEO Sukh Chamdal said the “strong” performance in the half demonstrated the continued appeal of Cake Box’s “unique offering”.

“Our fantastic franchisees, supported by their dedicated team members, have helped us deliver record first half store openings, revenues, profits and dividends, while making further significant strategic progress that gives us momentum into the second half.

“Our proven franchisee model continues to deliver and we now plan to open up to 32 new franchise stores this year, helping more entrepreneurs than ever build their own businesses and serve their local communities.

“Despite continued uncertainty in the wider environment, it’s clear that our unique customer proposition remains highly attractive as more customers choose our delicious, egg-free cakes to celebrate important occasions or simply satisfy their appetites for a tasty treat.

“We look ahead with confidence in meeting full year expectations and making further progress in the years ahead.”

Revenues in the four months to 30 September - which excluded the comparisons with March 2020 when its stores were forced to close during lockdown - increased 50.5% to £11.2m, with pre-tax profits up 57% to £2.6m.

Like-for-like sales growth came in at 13.3% in franchise stores during the four months, with franchisee total turnover up 73.2% to £29.5m.

Trading remained strong in the second half, with franchisee like-for-like sales at 14.4% in October and online sales up 46.6%.

Shares in the group soared 4.6% to 397.4p this morning, which puts the stock up more than 80% in 2021 so far.

Morning update

The FTSE 100 has started the week flat on Friday’s close at 7,307.15pts.

Beleaguered THG has bounced back 4.9% to 213.7p this morning, with Sainsbury’s, Fever-Tree Drinks and Finsbury Food Group also among the early risers, up 1.3% to 288.1p, 1.1% to 2,513p and 0.9% to 96.4p respectively.

Early fallers included McColl’s Retail Group, down 3.1% to 18.9p, WH Smith, down 1.9% to 1,634.5p, and Associated British Foods, down 0.6% to 1,874.5p.

This week in the City

It’s looking like a busy week for the grocery industry.

Tomorrow kicks off with full-year results for Primark owner Associated British Foods, alonsgide the latest monthly Kantar market share figures and the BRC-KPMG retail sales figures for October.

On Wednesday, Marks & Spencer updates the markets on its ongoing turnaround, reporing interim results.

Thursday brings the B&M European Value Retail interims and the WH Smith finals.