Cake Box says flurry of new franchise stores to open

October 13, 2020

Bakery chain Cake Box is seeing soaring numbers of hopeful first-time business owners applying to open a shop.

 
The egg-free cake maker, which has 140 stores nationwide – including more than 50 in London –is set to open another 47 franchises in the coming months.

Cake Box’s chief executive and co-founder Sukh Chamdal said that over the past six months the company has received a “record number of applications” for franchises.

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Chamdal added: “We have seen such an upsurge in franchise applications because of the job situation… This has prompted people to take the redundancy money and go into business for themselves.”

He said due to difficulties on the high street there is a lot more property available. “Because we are a stable business… we find that the landlords are now coming to us.”

The business shut for the first six weeks of lockdown. Sales in the six months to September 30 decreased to £8.6 million from £8.8 million. But online sales surged during the period.

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The boss had never previously planned home delivieries, but he said “Covid proved consumer habits were changing”.

Chamdal, who launched the company in the East End in 2008, said that he is now “very optimistic” about the future despite the “uncertain” start to 2020.

Analysts at Shore Capital said the update was “highly encouraging”, and that plans for larger numbers of stores “bodes well for medium to long term growth”.

As previously announced in September, the company declared a special dividend of 3.2p per share, which will be paid on October 23.

By NAOMI ACKERMAN

Source: Evening Standard

Cake Box shares rally 6% with a recovery led by tasty online sales growth

September 2, 2020

The recent trading update of baked goods retailer Cake Box (AIM:CBOX) told the story of promising customer demand, with the reopening of its stores and strong online sales acting as the icing in the cake.

Between April and May, the company noted that all of its stores in the UK due to lockdown. Having implemented its new safe work and hygiene protocols, the company began reopening its stores, with 131 of its 133 UK stores open by June 1 2020.

 
Though operating with a limited menu, Cake Box stated that between the start of June and end of August, like-for-like sales were up 14.1% year-on-year in franchise stores, as consumers released pent-up demand.

The real boost, however, came from the growth of its like-for-like online sales, which were up 74% year-on-year. The company said this jump had been aided by increased exposure and appeal of its new delivery service partnerships, offered by Uber Eats, Just Eat and Deliveroo.

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In addition to sales picking up, Cake Box added that it had opened five new stores since the start of June, in areas including Swindon and Basingstoke. It continued, saying that it has a good pipeline of franchisees and locations, and would look to target further store openings and new staff appointments at its headquarters.

Further, the company say it will repay £156,000 in furlough payments received from the government under the Job Retention Job. It also stated that it would be paying a special dividend of 3.20p on October 23 2020, with the amount being equal to the final year dividend announced on March 31 and later withdrawn on April 14.

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Commenting on its expectations for the coming month, the company’s statement read:

“With one month left of the Company’s half year, the Board is encouraged by the trading performance since reopening, its level of cash generation, and the prospects going forward.”

Following the news, Cake Box shares rallied 5.92% or 10.30p, to 184.30p per share 01/09/20 08:03 BST. The company’s p/e ratio is 22.31, its dividend yield stands at 0.92%.

By Jamie Gordon

Source: UK Investor Magazine

Cake Box: 75% of sites now trading at pre-Covid levels

June 21, 2020

Fresh cream cake specialist Cake Box has reported that trade at three-quarters of its stores is now at the level it was before the coronavirus outbreak.

 
Announcing its results for the year ending 31 March 2020, the company described the period as one of a “strong performance”, with 20 new franchise stores added over the 12 months. At the end of March, the company had 133 stores in operation.

Gross margin rose from 45.7% to 46.7%, although adjusted pre-tax profit fell from £4m to £3.8m, which Cake Box said was slightly below previous expectations.

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Like-for-like sales through Cake Box franchise stores rose 2%, but had been up 5.1% in the period before coronavirus.

“Since the outbreak of the Covid-19 pandemic, our first priority has remained the health, safety and wellbeing of our customers, colleagues, franchisees and their staff and the communities in which we operate across the country,” said chief executive officer Sukh Chamdal.

The company has since reopened sites after introducing social distancing and new processes, with 131 of its 133 stores now open.

Based on average turnover for the two weeks to 7 June 2020, the company said 75% of sites were achieving the average turnover seen in the seven weeks before 15 March.

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“We have a strong pipeline in place to help continue to grow the Cake Box family and are developing new, innovative ways to extend our customer reach,” said Chamdal.

He explained that this included the expanded trial of shopping centre kiosks, and supporting a click-and-collect system that was popular during lockdown. The business last month launched home delivery through Uber Eats and Just Eat, and recently launched on Deliveroo.

“As we emerge into a new sense of normality, there will still be birthdays, marriages and numerous other occasions, small and large, to celebrate up and down the country, with Cake Box’s growing family of dedicated franchisees committed to supporting those festivities as best they can.

“With a strong balance sheet, operational flexibility and a capital light business model, we remain confident in the group’s future prospects.”

Source: Bakery Info

Cake Box reopens 79 sites after revamping processes

May 13, 2020

Cake Box franchisees have reopened 79 stores – and the business hopes to have all its sites open again by early next month.

 
In line with many bakery chains, Cake Box closed all its stores after the government updated it social distancing advice in March.

Since then, the business has been reviewing its processes and operations and consulting with franchisees and their employees.

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As a result of this, Cake Box has put in place new processes:

  • Operating with smaller teams in store to allow for social distancing
  • Clear demarcation of required social distancing throughout the premises
  • Staff wearing PPE at all times including face masks and shields
  • Implementing an enhanced personal and property hygiene regime.

The company said that after an initial trial of these processes, with stores operating click & collect and delivery, it told franchisees they could start trading again if they wished.

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To date, 79 franchise stores are open offering a limited menu of products supplied from the Cake Box bakery in Enfield where the company has also brought in new health and safety procedures. The bakery is operating with reduced staffing levels to maintain appropriate distancing.

“Initial demand from customers has been encouraging, albeit at much lower levels than in normal trading conditions given the ongoing lockdown restrictions,” stated Cake Box, which hopes to have its full estate open by early June.

Cake Box has previously said that relatively low levels of rent and overheads would help its franchisee businesses recover from the impact of coronavirus.

By Vince Bamford

Source: Bakery Info

Cake Box suspends dividends

April 15, 2020

Cake Box has suspended its dividend after the cake chain was forced to close its stores in the wake of the coronavirus pandemic.

However, the retailer said it saw like-for-like sales and adjusted profits increase in the year to March 31, despite Covid-19 impacting revenues in March.

 
Cake Box said it expected to report revenue for the year of around £18.7 million, up around 10 per cent from the previous year despite the disruption.

It added that like-for-like sales grew by two per cent for the year, despite closing its stores on March 23 after the government called for the shutdown of non-essential retailers.

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Adjusted pre-tax profits are expected to be between £4.1 million and £4.3 million for the year, up from £4 million for the previous full year.

Cake Box said it has furloughed the majority of its head office, warehouse and bakery staff, in response to the virus.

The retailer said it was also assisting its franchisees in applying for the government’s retail, hospitality and leisure grant, while they will also benefit from the business rates holiday.

The business expected to have costs of around £200,000 each month while its franchise stores remain shut, but it is “very comfortable” with its current cash level and liquidity.

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“Whilst this is an uncertain and difficult time for the country, we are incredibly proud of the efforts of our franchisees who have been sending thousands of our cakes to frontline workers to give them a slice of comfort during these challenging times,” Chief executive Sukh Chamdal said.

“Whilst the current closure of our franchise stores has and will continue to have an impact on performance, we are confident that our unique customer offer will continue to resonate over the long term.

“Life is somewhat on hold for now, but when we emerge from this we will still have birthdays, marriages and numerous other occasions small and large to celebrate up and down the country.”

Shares in the company jumped 10.6 per cent to 125p in early trading.

Cake Box is known for baking its cakes to a strict lacto-vegetarian diet, with no meat products or eggs, helping it cater to religious communities and those making dietary choices.

By Elias Jahshan

Source: Retail Gazette

Cake Box Financially “Strong” As Covid-19 Forces Stores To Close

March 27, 2020

Cake Box Holdings PLC said on Tuesday it has a strong balance sheet as all of its franchised stores close.

 
Cake Box, which sells fresh cream cakes, has instructed all franchisees they should be closing down their stores until UK government advice on Covid-19 changes.

The company said it is impossible to tell how long stores may be closed for, meaning no guidance can be given on the impact of Covid-19. As well as lost revenue, the company will also have to delay new store openings.

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Cake Box confirmed trading in the year-to-date has met expectations, with its financial year ending on Tuesday next week.

“Cake Box has a strong balance sheet with a current cash balance of approximately GBP4 million. The group’s only debt is mortgage debt of GBP1.6 million secured by its freehold properties in Enfield and Coventry,” said Cake Box.

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“The group operates a franchise model and therefore has relatively low levels of fixed costs and will take all appropriate measures to conserve its cash during this period. The group notes and appreciates the various actions taken by the UK government to support businesses and employees during these challenging times and will assess how best to utilise these while the group’s stores remain closed,” said Cake Box.

Shares were 6.8% lower on Tuesday at midday in London at a price of 99.22 pence each.

By George Collard

Source: Morningstar

Eggfree Cake Box opens in Ashford town centre

November 9, 2019

A vegetarian cake shop selling a selection of eggless cupcakes, Eggfree Cake Box, has opened in Ashford town centre.

Eggfree Cake Box – which already has stores in Dartford, Folkestone, Gravesend, Maidstone and Strood – opened in Ashford’s Lower High Street on Saturday.

 
Six members of staff have been employed at the new store, which sells birthday and wedding cakes and boxes of cupcakes in a variety of flavours, colours and designs.

Since the company started out in East London in 2008 – more than 120 franchises have opened across the UK.

All products are 100% egg free as the founders of the company follow a strict lacto-vegetarian diet.

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In 2017, a Click and Collect service was launched to enable customers to order personalised cakes and collect them within an hour.

Currently, the new shop is only accepting cash payments but management say that they hope to have a card machine up and running by the end of this week.

Tara Kattel, who also manages a store in Folkestone, said: “When we originally went for the Cake Box franchise, we wanted to open in Ashford but we didn’t have have the premises, so we opened in Folkestone first.

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“We have had a very good response so far, we have just activated our website so customers can order online.

“We are excited to be here. We want to brighten up this end of the high street.”

Customers can enjoy a slice of cake from 10.30am to 6.30pm Monday to Saturday.

On Sundays, it will open from 10.30am and 4.30pm.

By Georgia Woolf

Source: Kent Online

Eggfree Cake Box set to open in Ashford town centre

October 14, 2019

A vegetarian cake shop is coming to Ashford. Eggfree Cake Box – which sells a range of eggless cakes – is set to expand its offering in the county, as it already has stores in Dartford, Folkestone, Gravesend, Maidstone and Strood.

Bold purple shutters and the company’s signage has gone up in Ashford’s Lower High Street as the store prepares for its new opening.

 
The franchise, which sells birthday cakes, wedding cakes, muffins and cupcakes, started out with a small shop in East London in 2008.

There are now more than 120 cake shops across the UK.

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All products are 100% egg free as the founders of the company follow a strict lacto-vegetarian diet.

In 2017, a Click and Collect service was launched to enable customers to order personalised cakes and collect them within an hour.

Boxes of cupcakes in a variety of flavours, colours and designs are also on offer, as well as the company’s iconic ten-inch giant cupcakes.

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The company’s website says: “Our busy modern lifestyles mean very few of us have time to bake our own or even pre-order cakes, which is where Eggfree Cake Box comes in.

“The Eggfree Cake Box is dedicated to producing the highest quality eggless, vegetarian cream cakes for all occasions.”

By Georgia Woolf

Source: Kent Online

Cake Box Posts Solid Maiden Annual Results On Franchise Growth

June 24, 2019

Cake Box Holdings PLC on Monday said returns from franchises and continued expansion into new areas in the UK has led to a strong set of inaugural full year results.

The company, which operates a chain of eggless cake shops, recorded pretax profit of GBP3.8 million for the year ended March 31, up from GBP3.3 million in the year ago period, on a revenue of GBP16.9 million and GBP12.7 million, respectively. Margins improved to 45.7% from 42.9%.

 
The company opened 27 new franchise stores in 2019 financial versus 23 stores a year ago. As at March 31, Cake Box operated 113 franchise stores.

Franchisee total turnover for 2019 financial year grew by 18% to GBP30.7 million from GBP25.9 million a year ago. Like-for-like sales growth in franchise stores stood at 6.5% versus 15.0%.

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Cake Box said it is pleased with trading so far in 2020 financial year and has strong pipeline of new store openings. It remains on track of opening six new franchise stores per quarter.

“The new financial year has started well and we have already opened four new franchise stores, with two more expected to open before the end of June 2019. The Group is well placed for further progress and the Board is confident of another successful year of growth,” said Chief Executive Officer Sukh Chamdal.

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The company, which listed on the AIM market in June 2018, proposed a final dividend of 2.4 pence per share, giving a total payout of 3.6p for the full year.

Shares in Cake Box were trading 2.6% higher at 170.75 pence each on Monday.

By Tapan Panchal

Source: Morningstar

Hungry Cake Box customers drive growth

April 9, 2019

Cake Box has reported a rise in full-year sales as the retailer continues to enjoy stellar growth.

The firm, which debuted on London’s junior market in June, said like-for-like sales grew 6.5% in the year to March 31, with total revenue set to rise 30% to £17.1 million.

It expects profits for 2019 to be in line with current market expectations.

Chief executive Sukh Chamdal said: “Our first year as a public company has been an exciting one. We’ve achieved record revenues, opened a record number of stores and continue to see strong appetite for our unique customer offer.”

The group, which specialises in egg-free fresh cream cakes to order, said that average sales per store continued to grow as it opened 28 new branches, taking it to 114 in total.

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“As we continue to grow our presence for customers across the UK, we have invested in new facilities to support expansion, including two new warehouse and distribution centres in Bradford and Coventry.

“We believe the group (is) ideally positioned to deliver profitable growth and enter our new financial year with confidence,” Mr Chamdal added.

Cake Box started as a single site in east London in 2008 and launched as a franchise a year later.

The company is now aiming to grow to 250 franchise sites in the UK.

Source: Belfast Telegraph