In another example of the cautious steps companies are taking to get back to business after lockdown, Cake Box (CBOX:AIM) has outlined plans for a fuller resumption of its operations. The shares ticked up 0.7% to 153.5p, with investors supportive of the extra clarity.
The egg-free cakes franchise company said it expected to have all its high street shops open by early June and reported that initial demand had been ‘encouraging’ but at much lower levels than usual amid the ongoing lockdown.
The company’s model sees franchisees fork out the capital required to open a shop and then subsequently own and run the store.
FULLY OPEN BY EARLY JUNE
Following measures allowing its franchise stores to operate safely and in line with government guidance, the company said it currently had 79 franchise stores open. Currently offering a limited menu of products, it is anticipated that the full high street estate will be open for business by early June.
'Production is currently limited to our Enfield site where we have also implemented new health and safety procedures and are operating with reduced staffing levels to maintain the appropriate distancing,' the company said.
VISIBILITY CHALLENGE
House broker Shore Capital commented: ‘Whilst it is encouraging that the Cake Box franchise estate is starting to open, and so trade again, visibility remains low in our view and we keep our full year 2021 forecasts withdrawn for the time being.
‘Cake Box reported a cash balance of £3.7m on 14 April, and guided to a monthly cash burn of £0.2m with all stores closed, such guidance has not been changed in today’s update.
‘Despite the obvious industry wide challenges, we continue to see Cake Box as well placed to ride out what remain unprecedented times.’
