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Cake Box Holdings  -  CBOX   

Half Year Results

Released 07:00 26-Nov-2018

RNS Number : 4073I
Cake Box Holdings PLC
26 November 2018
 

Cake Box Holdings plc

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

 

Unaudited Half Year Results for the six months ended 30 September 2018

 

Maiden results announced with growth in sales, profits and dividend

 

Cake Box Holdings plc, the specialist retailer of fresh cream cakes, today announces its half year results for the six months ended 30 September 2018.

 

Financial Highlights

 

 

Half year

Half year

Change

 

ended

ended

 

 

30 September 18

30 September 17

 

Revenue

£8.28m

£5.75m

+44%

Gross profit

£3.67m

£2.50m

+47%

EBITDA*

£2.18m

£1.63m

+34%

Pre-tax profit

£1.37m

£1.47m

-7%

Adjusted Pre-tax profit**

£1.97m

£1.47m

+34%

Net cash

£2.40m

£1.46m

+64%

Earnings per share

2.85p

3.19p

-11%

Adjusted Earnings per share**

4.35p

3.19p

+36%

Interim dividend declared

1.20p

1.03p

+17%

 

* EBITDA is calculated as operating profit before depreciation

**Calculated after adjusting for AIM listing costs of £599k

 

·     Group revenue up 44.0% to £8.3m (H1 FY18: £5.8m)

·     Gross margin improved to 44.3% (H1 FY18: 43.4%)

·     Underling operating cash flow** of £1.62 million (H1 FY18: £1.33 million)

·     Strong balance sheet with £2.40 million cash (H1 FY18: £1.46 million)

 

Operational highlights

·     IPO on AIM successfully completed in June 2018

·     15 new franchise stores added in the period (H1 FY18: 10 new stores)

·     101 franchise stores in operation at 30 September 2018

·     Successful launch of new product ranges

 

Our Franchisee Store highlights

·     Franchisee total turnover up by 29% to £14.1 million (H1 FY18: £10.9 million)

·     Franchisee online sales up 86% to £1.99 million (H1 FY18: £1.07 million)

·     Like-for-like sales growth of 4.4% in franchise stores (H1 FY18: 9.0%)

 

Neil Sachdev, Non-executive Chairman commented:

 

"I am pleased to report a strong performance since our IPO on AIM in the summer. These results reflect the robust growth opportunity presented by our franchisee store roll-out strategy. I look forward to further progress in the remainder of our financial year. We celebrate 10 years of Cake Box with our staff and franchisees in 2019."

 

 

Sukh Chamdal, Chief Executive Officer, added:

 

"It's very exciting to be announcing our first set of results as a public company. The Cake Box brand has continued to go from strength to strength and we have made good progress since floatation with our strategic priorities of growing our store estate, investing further in our new products and developing our digital marketing.

 

Our performance during the first eight weeks of the second half has been encouraging and we have already opened four new stores. The Group is well placed for further progress and the Board remains confident of another successful year of growth." 

 

For further information, please contact:

 

Cake Box Holdings plc

Sukh Chamdal, CEO

Pardip Dass, CFO

 

+44 (0) 20 8443 1113

Shore Capital (NOMAD and  Broker)

Stephane Auton

Patrick Castle

James Thomas

 

+44 (0) 20 7408 4090

MHP Communications (Financial PR)

Oliver Hughes

Simon Hockridge

Charlie Barker

Pete Lambie

 

+44 (0) 20 3128 8570

 

 

Operational Review

Results overview

 

We have delivered a strong trading performance for the half year, during which we successfully completed our IPO in June. We continue to build momentum with a record number of new franchise store openings and an increase in average sales per store.

 

This has led to significant financial progress for the Group. Revenue grew by 44% and underlying EBITDA rose by 34%, meaning that adjusted profit before tax also increased by 34% to £1.9m, ahead of our previous expectations. This was partly a result of an increase in our gross margin to 44.3% (H1 FY18: 43.4%), driven by better yield obtained from the new ovens which were installed earlier this year.

 

These results demonstrate the continuing appeal of the Cake Box brand and unique customer offer, combined with the financial strength of the Group and the strong cash generative nature of our business model. We have achieved impressive growth in revenues and profits despite the hot weather which adversely impacted high street footfall and therefore the like- for-like sales growth of many stores during the summer months. Despite this impact, our franchisees achieved like-for-like sales of +4.4% with franchisee total turnover rising to £14.1m for the half year.

 

Store openings

 

15 new franchise stores were added during the period, bringing the total number of stores to 101 at the half year end.  Recent store openings included Bletchley, Northampton and Derby. Our new stores continue to deliver strong returns and we were particularly pleased with our 100th store in Bletchley near Milton Keynes which recorded the highest ever first week of sales for a new store.

 

This performance further demonstrates our successful business model through which new stores typically reach a break-even or profitable contribution to the Group within the first day of trade. We have a strong pipeline of new franchise stores for the second half of the year and are on track to open a similar number to that seen during the first half. 

 

Online

 

During the year we saw strong growth in franchisee online sales which were up 86% to £1.99 million (H1 FY18: £1.07 million). Online sales are processed centrally through the Group's website with orders fulfilled through our franchise estate. Franchise revenue from online sales is included in franchisee turnover totaling £14.1 million (H1 FY18: £10.9 million).

 

Products

 

We have successfully launched a number of new products to our range during the period. Of these, the introduction of our caramel and chocolate cheesecake products have been particularly well-received by customers. These are individually and expertly decorated by our in-store designers which create a real buzz with our customers who are excited by our evolving product range.

 

New Warehouse

We hope to complete soon on an additional warehouse and distribution Centre in the north of England which we anticipate will be in operation in the first half of 2019.  As well as acting as a distribution centre, the intention would be to install some sponge production capability at the new site which would enable us to reduce our existing distribution costs and provide a back up to our production facility in Enfield. It is expected that the entire funding required for the new warehouse will be generated through the sale of our investment property, which we hope to complete during the next few months.

 

 

Balance Sheet and Cashflow

We have a strong balance sheet with £2.40 million cash as at 30 September 2018 (H1 FY18: £1.46 million).

 

Net cash as at 30 September 2018 was £0.8m (H1 FY18: Net debt £0.4m).

 

Underlying operating cash flow for the period (excluding IPO costs of £599k) was £1.62 million dup from £1.33 million in the same period in 2017 despite early payment of 2017/18 corporation tax of £400k.

 

Dividend

As outlined at the time of IPO, the Company has adopted a progressive dividend policy to reflect the cash flow generation and earnings of the Group.

Today we are declaring an interim dividend of 1.2 pence per share. The Company intends that the total dividend for the year (and future years) will split by one third for the first six months of the year to two thirds for the year end respectively. The interim dividend will be paid on 20 December 2018 to those shareholders on the register at the close of business on 7 December 2018. The ex-dividend date is therefore 6 December 2018.

Outlook

 

Our performance during the first eight weeks of the second half has been encouraging and we have already opened four new stores. The Group is well placed for further progress and the Board remains confident of another successful year of growth.

 

 

Unaudited Consolidated Statement Of Comprehensive Income

For The Six Months Ended 30 September 2018

 

 

 

 

6 months to
30 September 2018

 

6 months to
30 September 2017

 

12 months to
31 March

2018

 

 

(unaudited)

 

(unaudited)

 

(audited)

 

Note

£

 

£

 

£

Revenue

 

8,283,338

 

5,753,628

 

12,833,659

Cost of sales

 

(4,616,474)

 

(3,254,911)

 

(7,263,209)

Gross profit

 

3,666,864

 

2,498,717

 

5,570,450

Administrative expenses

 

(1,680,671)

 

(1,087,629)

 

(2,273,128)

Other operating income

 

-

 

84,000

 

84,000

Operating profit

 

1,986,193

 

1,495,088

 

3,381,322

Exceptional items

5

(598,645)

 

-

 

-

Net finance costs

 

(18,919)

 

(22,879)

 

(45,672)

Profit before income tax

 

1,368,629

 

1,472,209

 

3,335,650

Income tax expense

 

(228,613)

 

(208,032)

 

(568,053)

PROFIT AFTER INCOME TAX

 

1,140,016

 

1,264,177

 

2,767,597

 

 

 

 

 

 

 

OTHER COMPREHENSIVE INCOME FOR THE PERIOD

 

 

 

 

 

 

Movement of deferred tax on the revaluation of tangible fixed assets

 

-

 

12,691

 

16,790

 

 

 

 

 

 

 

TOTAL COMPREHENSIVE PROFIT FOR THE PERIOD

 

1,140,016

 

1,276,868

 

2,784,567

 

 

 

 

 

 

 

 

 

 

 

 

 

 

EARNINGS PER SHARE

   

 

 

 

 

 

Basic & diluted

6

2.85p

 

3.19p

 

6.96p

 

 

 

 

 

 

 

 

 

                                                                                                   

 Unaudited Consolidated Statement Of Financial Position

As At 30 September 2018

 

 

 

30 September 2018

(Unaudited)

30 September 2017

(Unaudited)

31 March

2018

(audited)

                                                           

Note

£

£

£

ASSETS                                                     

 

 

 

 

Non-current assets

 

 

 

 

Investment property

 

342,629

342,629

342,629

Property, plant and equipment

 

3,620,035

3,413,528

3,340,520

Trade and other receivables

 

130,112

281,565

259,459

 

 

4,092,776

4,037,722

3,942,608

Current assets

 

 

 

 

Inventories

 

800,866

663,524

709,212

Trade and other receivables

 

1,649,810

1,261,327

1,300,636

Cash and cash equivalents

 

2,401,318

1,459,918

2,505,657

 

 

4,851,994

3,384,769

4,515,505

TOTAL ASSETS

 

8,944,770

7,422,491

8,458,113

 

 

 

 

 

EQUITY AND LIABILITIES

 

 

 

 

Share capital and reserves

 

 

 

 

Issued share capital                                

6

400,000

160

160

Capital redemption reserve

 

40

40

40

Revaluation reserve

 

455,422

451,143

455,422

Retained earnings

 

4,385,512

3,223,742

4,205,336

TOTAL EQUITY

 

5,240,974

3,675,085

4,660,958

 

 

 

 

 

Current liabilities

 

 

 

 

Trade and other payables

 

1,646,620

1,239,790

1,493,348

Short-term borrowings

 

176,544

178,095

185,594

Current tax payable

 

339,591

500,243

519,523

 

 

2,162,755

1,918,128

2,198,465

Non-current liabilities

 

 

 

 

Borrowings

 

1,399,728

1,667,099

1,457,377

Deferred tax liabilities

 

141,313

162,179

141,313

 

 

1,541,041

1,829,278

1,598,690

 

 

 

 

 

TOTAL LIABILITES

 

3,703,796

3,747,406

3,797,155

 

 

 

 

 

TOTAL EQUITY & LIABILITIES

 

8,944,770

7,422,491

8,458,113

 

 

 

 

 

 

  

Unaudited Consolidated Statement Of Changes In Equity

For The Six Months Ended 30 September 2018

 

 

 

Share

capital

 

£

Capital redemption reserve             £

Revaluation reserve

 

£

etained earnings

 

£

Total

 

 

£

Balance at 1 April 2017

160

40

438,452

1,959,565

2,398,217

Total comprehensive income

-

-

-

1,264,177

1,264,177

Deferred tax on revalued property, plant and equipment

-

-

12,691

-

12,691

Balance at 30 September 2017

160

40

451,143

3,223,742

3,675,085

Total comprehensive income

-

-

-

1,503,420

1,503,420

Deferred tax on revalued property, plant and equipment

-

-

4,279

-

4,279

Dividends paid

-

-

-

(521,826)

(521,826)

Balance at 31 March 2018

160

40

455,422

4,205,336

4,660,958

Total comprehensive income

-

-

-

1,140,016

1,140,016

Share bonus issue

399,840

-

-

(399,840)

-

Dividends paid

-

-

-

(560,000)

(560,000)

Balance at 30 September 2018

400,000

40

455,422

4,385,512

5,240,974

Unaudited Consolidated Cash Flow Statement

For The Six Months Ended 30 September 2018

 

 

6 months to

30 September 2018

(unaudited)

6 months to

30 September 2017

(unaudited)

12 months to

31 March 2018

(audited)

£

£

£

Cash from operating activities:

 

 

 

 

1,368,629

1,472,209

3,335,650

Adjusted for:

 

 

 

 

 

198,381

132,796

318,548

 

-

-

(5,181)

 

(91,654)

(108,126)

(153,814)

 

(220,134)

(347,272)

(364,269)

 

153,579

167,291

402,110

 

(2,542)

(51)

(1,114)

Cash generated by operations

 

1,406,259

1,316,847

3,531,930

 

 

 

 

 

                   21,461

                   22,930

             46,786

 

(408,545)

(5,214)

(362,542)

                                                                                          Net cash inflow from operating activities

 

 

1,019,175

 

1,334,563

 

3,216,174

 

 

 

 

 

Cash flows from investing activities

 

 

 

 

 

                 -

                 -

             190,000                

 

(477,896)

(233,124)

(530,688)

 

                  2,542

                  51

                 1,114

                                                                                          Net cash flows used in investing activities

 

 

(475,354)

 

(233,073)

 

(339,574)

 

 

 

 

 

Cash flows from financing activities:

 

 

 

 

 

 

 

 

 

 

(52,606)

(61,716)

(249,847)

 

(14,093)

(32,627)

(28,185)

 

(560,000)

-

(521,826)

 

(21,461)

(22,930)

(46,786)

 

 

(648,160)

 

(117,273)

 

(846,644)

 

Net (decrease)/increase in cash and cash equivalents

 

 

(104,339)

 

984,217

 

2,029,956

 

 

 

 

 

Cash and cash equivalents brought forward

 

2,505,657

475,701

475,701

 

Cash and cash equivalents carried forward

 

 

2,401,318

 

1,459,918

 

2,505,657

For the purposes of the cash flow statement, cash and cash equivalents comprise the following:

Cash at bank and in hand

     2,401,318

   1,459,918

2,505,657

Bank overdraft

-

-

-

 

2,401,318

1,459,918

2,505,657

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

1.     Notes to the Interim Report

 

Basis of preparation

The consolidated half-yearly financial statements, do not constitute statutory accounts within the meaning of Section 434 of the Companies Act 2006. The statutory accounts for the year ended 31 March 2018 have been filed with the Registrar of Companies at Companies House. The auditor’s report on the statutory accounts for the year ended 31 March 2018 was unqualified and did not contain any statements under Section 498 (2) or (3) of the Companies Act 2006.

 

The published financial statements for the year ended 31 March 2018 were prepared in accordance with UK GAAP Financial Reporting Standard 102. The financial statements for the year ended 31 March 2018 were converted to International Financial Reporting Standards as adopted for use in the EU ("IFRS") and this conversion of the historical financial information was included in the AIM Admission document. There was no material effect from conversion. The comparative information for the year ended 31 March 2018  presented in these half-year financial statements has been extracted from the historical financial information, which was published in the AIM admission document

 

The consolidated annual financial statements of Cake Box Holdings Plc for the year ended 31 March 2019 will be prepared in accordance with IFRS. Accordingly, these interim financial statements have been prepared using accounting policies consistent with those which will be adopted by the Group in the financial statements for the year ended 31 March 2019 and which were used in the preparation of the historic financial information for the year ended 31 March 2018 included in the AIM admission document.

 

None of the standards, interpretations and amendments effective for the first time from 1 January 2018, including IFRS 9 and IFRS 15, have had a material effect on the historical financial information. None of the standards, interpretations and amendments which are effective for periods beginning after 1 January 2019 and which have not been adopted early, are expected to have a material effect on the historical financial information.

 

The financial information contained in this interim report should be read in conjunction with the historical financial information included in the AIM Admission document.

 

On 27 June 2018, Cake Box Holdings Plc was admitted to the AIM market of London Stock Exchange Plc.

 

The consolidated half-yearly financial statements for the six months to 30 September 2018 have not been audited or reviewed by auditors, pursuant to the Auditing Practices Board guidance on Review of Interim Financial Information.

 

The consolidated half-yearly financial statements have been prepared under the going concern assumption and historical cost convention as modified by fair value for investment property and property, plant and equipment.

 

Basis of consolidation

The Group consolidated half-yearly financial statements consolidates the company and its subsidiaries. All intra-group transactions, balances, income and expenses are eliminated on consolidation.

 

2.     Changes in accounting policies and disclosures

 

IFRS 15 'Revenue from Contracts with Customers'

The Group has applied this accounting standard from 1 April 2018 and has adopted the modified retrospective approach to its adoption which would result in any adjustments for contracts in progress at 1 April 2018 being made to opening retained earnings at that date. 

 

The Group has considered how franchise fees are recognised in accordance with IFRS 15 using the 5 step approach set out in that standard.  In undertaking this exercise the Group has not identified any material changes in how revenue would be recognised for the contracts in progress at 31 March 2018 nor with those that have been undertaken in the six months to 30 September 2018.

 

IFRS 9 'Financial Instruments'

The Group has applied this standard from 1 January 2018 but it has had no material effect on the Group's financial statements.

 

IFRS 16 'Leases'

The Group has considered how leases are accounted for in accordance with IFRS 16 'Leases', including consideration of transition method.  The standard is expected to only affect the Group in respect of leases that it has in place that are currently treated as operating leases in accordance with current standards.

 

The Group acts as a lessee and lessor but will not be required to recognise operating leases on the balance sheet when the new standard is implemented. The leases are expected to fall under the definition of exemption criteria. Early adoption of this standard has not been taken.

 

3.     Segment reporting

 

Components reported to the chief operating decision maker, the board of directors, are not separately identifiable. The group makes varied sales to its customers but none are a separately identifiable component. The following information is disclosed:

 

 

 

 

 

6 months to

30 September 2018

(unaudited)

6 months to

30 September

2017

(unaudited)

12 months to

31 March

2018

(audited)

 

 

£

£

£

Sale of goods

6,687,900

4,875,831

10,490,687

Sale of services

1,535,038

833,212

2,248,797

Rental of properties

60,400

44,585

94,175

 

8,283,338

5,753,628

12,833,659

 

 

 

 

 

4.     Dividends

 

 

6 months to
30 September 2018

6 months to
30 September 2017

12 months to
31 March  

2018

 

(unaudited)

(unaudited)

          (audited)

 

£

£

£

Dividends paid

560,000

-

521,826

 

5.     Exceptional items

 

 

6 months to
30 September 2018

6 months to
30 September 2017

12 months to
31 March  

2018

 

(unaudited)

(unaudited)

          (audited)

 

£

£

£

AIM listing costs

598,645

-

-

6.     Share Capital

 

6 months to
30 September 2018

6 months to
30 September 2017

12 months to
31 March

2018

 

(unaudited)

(unaudited)

(audited)

 

 

 

 

 

£

£

£

 

 

 

 

40,000,000 Ordinary shares of £0.01 each

400,000

-

-

40,000,000 Ordinary shares of £0.000004 each

-

160

160

 

 

On 4 June 2018 a bonus issue was made in the proportion of 2,500 shares for every 1 existing Ordinary share held. Immediately after the bonus issue the 100 billion £0.000004 Ordinary shares in issue were consolidated into 40,000,000 ordinary shares of £0.01 each. No amendment to the rights and restrictions as set out in the Company's articles of association were made.

 

Earnings per share

 

The basic earnings per share is calculated by dividing the earnings attributable to equity shareholders by the weighted average number of shares in issue. In calculating the diluted earnings per share, share options outstanding have been taken into account where the impact of these is dilutive.

 

6 months to
30 September 2018

6 months to
30 September 2017

12 months to
31 March

2018

 

(unaudited)

(unaudited)

(audited)

 

£

£

£

 

 

 

 

Basic earnings per share

2.85p

3.19p

6.96p

Diluted earnings per share

2.85p

3.19p

6.96p

 

Excluding exceptional AIM listing costs                                         

Basic earnings per share

4.35p

3.19p

6.96p

Diluted earnings per share

4.35p

3.19p

6.96p

 

 

 

 

 

 

 

 


This information is provided by RNS, the news service of the London Stock Exchange. RNS is approved by the Financial Conduct Authority to act as a Primary Information Provider in the United Kingdom. Terms and conditions relating to the use and distribution of this information may apply. For further information, please contact rns@lseg.com or visit www.rns.com.
 
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Half Year Results - RNS