Cake Box Holdings PLC on Tuesday said profit grew nearly 20% in the first half of its current financial year, despite ‘challenging market conditions’.

The Enfield, London-based eggless cake maker said pretax profit for the six months that ended September 30 was £2.8 million, up 17% from £2.4 million the year before.

Revenue grew 3.9% to £18.7 million from £18.0 million last year, while cost of sales fell 2.2% to £8.7 million from £8.9 million. Administrative expenses, however, increased 11% to £7.3 million from £6.6 million.

‘Trading momentum picked up during the first half, with challenging market conditions being experienced across the retail sector,’ Cake Box said.

Cake Box declared an interim dividend of 3.40 pence per share, up 17% year-on-year from 2.90p.

Chief Executive Officer Sukh Chamdal said: ‘During the first half of the year, we delivered strong growth across key financial metrics and expanded our customer base, resulting in double digit increases in profits and dividends. We have seen continued growth in online sales as well as brand awareness. Importantly, we increased our customer database by 40% and launched our customer loyalty programme in the period.

‘Our store opening programme is gaining traction, with fourteen new franchise stores opening in the year to date, compared to ten by the same date last year. This has been achieved in collaboration with our external property consultants, and this success gives us confidence in exceeding the store opening target set for the year.

‘We enter the second half with ongoing positive trading momentum and are on track to deliver full-year performance in line with market expectations. The board remains confident in the company’s long-term prospects, and we are making strategic progress in building a larger and more profitable business for our shareholders, franchise partners and colleagues.’

Cake Box did not on Tuesday outline what its full-year expectations were, though broker Shore Capital has forecast revenue to increase 7.1% to £40.5 million from £37.8 million, and for adjusted pretax profit to rise 10% to £6.6 million from £6.0 million.

The group is ‘confident’ in delivering more than 25 new stores by the year-end.

Shares in Cake Box were up 0.2% to 188.45 pence each in London on Tuesday afternoon.

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