THIS ANNOUNCEMENT CONTAINS INSIDE INFORMATION FOR THE PURPOSES OF ARTICLE 7 OF THE MARKET ABUSE REGULATION (596/2014/EU) AS THE SAME HAS BEEN RETAINED IN UK LAW AS AMENDED BY THE MARKET ABUSE (AMENDMENT) (EU EXIT) REGULATIONS (SI 2019/310) ("UK MAR").

31 August 2022

Cake Box Holdings plc

("Cake Box" or the "Company" or the "Group")

Trading Update

Cake Box Holdings plc, the specialist retailer of fresh cream cakes, announces an update on current trading and outlook.

In the Group's Full Year Results on 27 June 2022, it noted that while current trading was robust against a very strong comparative trading period in H1 2022, the Board remained mindful of an increasingly challenging economic and trading environment.

Since then, the trading environment has become significantly more challenging. Inflationary cost pressures across the Group have increased above levels previously anticipated and the Board does not see these easing before the end of the financial year. While the Group has passed some of the cost increases onto franchisees with a recent price increase, the full year gross margin will be impacted. We remain mindful of significant inflationary pressures on our franchisees and customers across the country.

In addition, the Group has seen weaker than anticipated sales at the franchise level during July and August which has resulted in franchisee Like for Like* sales declining 2.8% in the first half to date. The Group believes the summer performance has been exacerbated by the recent heatwave which has impacted store footfall.

Accordingly, due to the worsening outlook and increasing cost of living pressures on the consumer, the Group now expects full year profitability to be significantly below current market forecasts.

The Group is taking proactive action to mitigate the impact of increased input and administrative costs and to protect levels of profitability, including implementing supply price increases. The Group continues to have a strong balance sheet and had cash as at close of business on 30 August 2022 of £6.7m, prior to paying the proposed dividend of £2.0m in September.

Cake Box continues to increase its geographic presence, with a strong pipeline of potential new franchisees and deposits for sites.  

Looking further ahead, the Board remains confident in the Cake Box's future growth prospects, underpinned by the increased investment in professionalising the Group's functions and the pipeline of new store openings across the country, with levels of franchisee deposits remaining at good levels.

For further information, please contact:

 *Like-for-like: Stores trading for at least twelve months prior to 28 August 2022.

The person responsible for arranging for the release of this announcement on behalf of Cake Box is David Forth, Interim CFO.