27th Jun 2022 14:22
(Alliance News) - The demand for cakes to commemorate special occasions is likely to stand Cake Box Holdings PLC in good stead, according to its broker Shore Capital, even as the UK grapples with a cost-of-living crisis.
Cake Box on Monday said it delivered a strong set of annual results despite a challenging economic and trading environment.
The AIM-listed stock was up 11% at 185.15 pence each on Monday afternoon.
In the year ended March 31, the London-based egg-free cream cake seller reported a pretax profit of GBP7.7 million. This represented an increase of 83% against the GBP4.2 million achieved the previous year.
Revenue rose 51% to GBP33 million from GBP21.9 million as the company reported 41% growth in online sales in the year. Cake Box said growth was driven by increases in store like-for-like sales following the addition of 31 new stores around the UK.
Cake Box said it was mindful of an increasingly challenging economic and trading environment moving forward but Chief Executive Sukh Chamdal remained upbeat: "As I said at the height of the Covid pandemic, there will still be birthdays, marriages and countless moments in our lives to celebrate with a slice of our delicious cake."
It declared a final dividend of 5.1 pence per share, up from 3.7p the previous year and bringing the company's full-year payout to 7.6p, up from 5.55p a year ago.
Shore Capital's Darren Shirley said the results show another strong year of progress for Cake Box.
"Whilst the UK consumer environment is materially tougher than at the start of financial 2023, we are supportive of management's view there will still be special occasions to celebrate and that the affordable treat will remain relatively resilient," the analyst said.
By Arvind Bhunjun; [email protected]
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