CBOX maybe? (I don’t hold).
It’s on a TTM PE of 37.3x and a Price to Turnover of over 6x, and that is for a cake franchise store. To put these metrics into perspective, another food related franchise seller, DOM, reached a PE peak of 31x and Price to Turnover of below 6 in it’s heyday of 2006.
The market cap is £143.2m, up from £46m, so today’s market cap is currently 3.1x that of 31 March 20 which was 21 months ago .
CBOX’s float date was 27 June 18 - relatively recent and therefore, on average, risky.
CBOX has been hyped by the retail investor press.
CBOX is forecasting turnover of £38.5m in 2024 against turnover of £21.9m for the y/e 31 March 21, an increase of just over 20% p.a. for the next 3 years. In total, by my rough calculations this equates to an additional total £30m franchisee turnover or 1m of individual cake sales at £30 per cake. The population of Bristol is 617k, to put that into perspective, but I appreciate there will be repeat customers over the period of a year.
Current Market Value to Earnings Power Value ~ 0.4, so 60% of it’s share price may be related to future growth at this point.
Arguably this was a lock-down winner which will be punished by the market if it can’t keep it’s sales growth up.
If CBOX can keep attracting new franchisees, all well and good, but it’s a good question whether this will be possible if there is a revenue ‘bump in the road’. Incidentally there appears to be over £1m lent to their franchisees, which increases risk for the investor. In it’s favour, though, the business model is capital light.
The CEO has recently sold shares for £10.5m/7.5% of the company’s issued share count (25 Nov 21), and the company secretary £1.29m (14 Sept 21). (Last year they additionally sold about half of these respective monetary amounts). They still hold 24.5% and 5%,though.
If I held this one I would think hard about the current risk to reward, and just where is CBOX taking it’s increased business from (who’s cake is CBOX eating?! ), just because I don’t believe it is increasing the size of it’s end market.
No advice intended.
Edit - My personal experience is that I have purchased one of their cakes for someone’s birthday and it was very nice. Website abit clunky. You could get a photo put onto the icing, though. Overpriced in my miserly opinion , but nicer than the plastic birthday cakes from the supermarket if you seriously like whipped cream and sickly sweet food. Delivery was expensive from memory, though. A bloke turned up in a taxi to deliver! Not sure I felt that was appropriate for a food delivery because it could have been interfered with. (I am not paranoid but they are definitely out to get me ).