24th Mar 2020 12:16
(Alliance News) - Cake Box Holdings PLC said on Tuesday it has a strong balance sheet as all of its franchised stores close.
Cake Box, which sells fresh cream cakes, has instructed all franchisees they should be closing down their stores until UK government advice on Covid-19 changes.
The company said it is impossible to tell how long stores may be closed for, meaning no guidance can be given on the impact of Covid-19. As well as lost revenue, Cake Box will also have to delay new store openings.
Cake Box confirmed trading in the year-to-date has met expectations, with its financial year ending on Tuesday next week.
"Cake Box has a strong balance sheet with a current cash balance of approximately GBP4 million. The group's only debt is mortgage debt of GBP1.6 million secured by its freehold properties in Enfield and Coventry," said Cake Box.
"The group operates a franchise model and therefore has relatively low levels of fixed costs and will take all appropriate measures to conserve its cash during this period. The group notes and appreciates the various actions taken by the UK government to support businesses and employees during these challenging times and will assess how best to utilise these while the group's stores remain closed," said Cake Box.
Shares were 6.8% lower on Tuesday at midday in London at a price of 99.22 pence each.
By George Collard; [email protected]
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