Specialist fresh cream cakes purveyor, Cake Box Holdings (CBOX:AIM) reported revenues up 11% to £18.7m for the year-ended 31 March 2020, and said it had seen strong trading since re-opening with 75% of stores operating at pre-crisis levels. The shares slipped 0.6% to 161.5p.
The company closed all its stores on 23 March, and assisted its franchisees in applying for the governments’ hospitality grant, while also helping with the furloughing of staff and taking advantage of the business rates holiday.
At group level the company took actions to protect head office, warehouse and bakery staff through the job retention scheme. The dividend was passed as previously indicated.
STRONG TRADING
Since 11 May the company has been reopening stores while putting in place social distancing measures and providing protective equipment for the staff of franchisees. As of 1 June 131 out of 133 stores were open, offering a limited menu.
Like-for-like sales growth remained strong until 8 March, rising 5.1% year-on-year, while the remainder of March saw a reduction in sales resulting in full-year like-for-like sales up 2%, compared with 6.5% last year.
The company has increased its click and collect service to give customers access to products from a choice of channels. Since re-opening stores, online sales have seen a significant increase with growth of 60% compared with last year.
In May the firm launched home delivery through Uber Eats and Just Eat Takeaway.Com (JET) which generated an ‘encouraging customer response’, while Deliveroo has also recently been added.
The pre-pandemic growth strategy remains in place and management reported a strong pipeline of new stores as well as extending the trialing of shopping centre kiosks.
EFFICIENCY GAINS
Sponge production capacity has been installed at all new sites to provide back-up for the facility in Enfield and significantly reduce future production and distribution costs. This will reduce delivery time to within 90 minutes for 90% of franchised stores which in turn will save over 80% of distribution costs.
Chief executive Sukh Chamdal commented, ‘as we emerge into a new sense of normality, there will still be birthdays, marriages and numerous other occasions, small and large, to celebrate up and down the country, with Cake Box's growing family of dedicated franchisees committed to supporting those festivities as best they can. With a strong balance sheet, operational flexibility and a capital light business model, we remain confident in the Group's future prospects.’
