Shares in egg-free cakes seller Cake Box (CBOX:AIM) jumped 5.5% to an all-time high of 268p on Monday after the company defied lockdown difficulties to confirm a big jump in sales last year.
The £113 million company said it expected to report a 16% jump in full-year revenues to a record £21.7 million for the year 31 March 2021. That would be around 10% higher than consensus expectations of £19.8 million, according to Refintiv data.
Pre-tax profit was said to be in line with market expectations of £4.2 million, up 10.6% year-on-year.
The group opened 17 new stores in the second half including Ipswich and Hove taking the total franchise store count to 157 after adding 24 new sites during the year.
As well as new stores, the company experienced strong like-for-like growth in the existing estate which grew 14.7% for the 40 weeks to 7 March 2021.
The launch of click-and-collect and third-party delivery options including Deliveroo, Uber and Just Eat helped drive online penetration which grew 84% year-on-year. Cake Box is accelerating its own delivery service after ‘pleasing’ early results.
STRONG PIPELINE
The pipeline of new openings was said to remain strong with the group holding franchise deposits for 52 sites across the country.
The company is trialling five Cake Box kiosks with a national supermarket chain, with three starting this week as non-essential shops reopen. Shore Capital noted this included the very busy Arndale Trafford centre in Manchester.
It added, ‘we view the performance of the Cake Box estate through the past twelve months as both highly commendable and encouraging, and reflective of the distinctive and attractive format/range that Cake Box brings to its franchisees and the wider market.’
The group continued to refresh the cake range and introduced egg-free custard to complement products such as the new packaged loaf cakes. In addition, gluten free and a vegan product were developed.
The cash generative nature of the capital light business model resulted in net cash of £3.6 million at the period end, up 70% year-on-year.