A positive statement from CBOX today. Full text below:
Continued sustainable growth
Trading during the second half has continued to be strong across the Group’s store estate and online delivery channels. Accordingly, the Group expects to report revenues for the year as up c.50% year-on-year, with adjusted profit before tax in line with market expectations.
Revenues for the ten months to 31 March 2022, excluding the impact of the March 2020 lockdown and associated store closures from the comparative period, are expected to have increased c.32%, with total franchisee sales increasing 12% on a like-for-like* basis.
Our online delivery and Click & Collect options continue to expand the Group’s customer base, and franchisee online sales increased c.41% during the year and c.27% on a ten-month basis.
An exceptional year for store openings
The Group opened 11 new franchise stores in the second half (excluding kiosk openings), bringing the total number of stores opened in the full year to 31 (FY 2021: 24), and leaving the total number of Cake Box stores at period end at 185. New locations opened in the second half include Tottenham, Plymouth and Sunderland.
There continues to be a high level of interest in Cake Box’s differentiated franchise proposition, with both strong demand for new stores from existing franchisees and a pipeline of new franchisee applicants representing 53 holding deposits held at the period end.
The successful trial of Cake Box kiosks with Asda has continued to expand, with ten new kiosks opened during the year, taking the total number of Asda kiosks to 15 in addition to the Group’s 20 shopping centre kiosks.
The Group’s balance sheet remains strong, with a significant increase in the Group’s net cash position, which stands at £5.2m at period end (FY 2021: £3.6m).
Sukh Chamdal, Co-founder and Chief Executive Officer, said:
"We have delivered another record performance for the year, demonstrating the continuing appeal of our customer and franchisee proposition. Our strategy to reach customers across the UK is starting to deliver. This is thanks to the dedication, determination and commitment of the exceptional entrepreneurs in our Cake Box Family, which continues to grow, providing opportunities for entrepreneurs, creating jobs and providing delicious, fresh cream cakes up and down the country.
“With a strengthened team and investment in our operations and processes, we have all the right ingredients to continue to sustainably grow the Cake Box customer base, brand and Family.”
CBOX’s cakes seem to be selling like, well, hot cakes!
The CEO and new interim CFO commendably talked about the statement with Paul Hill:
Adjusted pre-tax profit expectations are apparently £7m. Note the earlier H1 figures did not include adjustments, so CBOX now referring to adjusted profit for the full year implies adjustments were incurred during H2.
Anyway, the text below recounts the part of the interview referring to my SharePad article:
Paul Hill: The recent reporting and management changes that have happened, David, could you just take us through the progress of that internal audit being done by BDO and just… presumably, obviously there was a blogger I think from Sharescope who pointed out some technical inconsistencies between the prelims last year and the audited accounts which made no difference at all in terms of the grand scale of things, but obviously… changed investor sentiment. Can you just walk us through the whole lot, I know you have only been there for a month, what is your first view of it?
David Firth: Well I think it was a very wise move bringing BDO in because it has enabled us to put a floor on these issues. We are working closely with them to test and improve where necessary on our controls and I have worked before, actually several times, with the, not with this specific team, but with BDO in internal audit and its very high quality team. And we are working very well with them and we are not having worries and problems, which perhaps some of the readers of these blogs stories would have expected to find. So it is a very good part of our armoury in building and restoring investor confidence.
The CFO says the results should be published by the end of June. Let’s hope the new auditor provides a more favourable report than the old one!