Cake Box Holdings PLC said on Monday that it delivered a fall in profit but a rise in revenue in the year ended March 31, and offered an optimistic outlook for its current financial year, amid improving market conditions.
Shares in Cake Box jumped 10% to 140.00 pence in London on Monday morning.
In the year ended March 31, the Wembley, London-based egg-free cream cake seller reported a 30% fall in its pretax profit to £5.4 million from £7.7 million the previous year.
This fall in profit was driven by a 45% increase in operating expenses before exceptional items to £11.6 million from £8.0 million the prior year.
More positively, revenue increased by 5.5% to £34.8 million from £33 million the previous year. The company said this was achieved through an increase in store like-for-like sales, and the addition of 20 new stores in the UK, despite economic and consumer environment headwinds.
‘Having emerged confidently from the pandemic, we encountered the combination of rising energy prices, raw material inflation, and increased living costs for customers - a unique cocktail of interlinked macro-economic pressures that made growth hard to come by,’ said Chief Executive Officer Sukh Chamdal.
‘Despite these headwinds, we were able to again grow sales and gross margins, supported by shrewd purchasing decisions.’
The company recommend a final dividend of 5.5 pence per share, up 7.8% from 5.1p in the same period last year. This resulted in a total dividend of 8.1 pence per share, up 6.6% from 7.6p the year prior.
Cake Box said it was optimistic about its prospects for its current financial year, due to a robust sales performance and a growth in franchise sales.
The company noted that despite persistent economic challenges, inflation was starting to soften in some areas, which would support medium term growth.
‘The market outlook is improving, our capabilities have been expanded, and the Cake Box brand is stronger than ever. We have the right platform in place for the group’s development to accelerate over the coming year and beyond,’ said CEO Chamdal.
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