Cake Box sees FY profit ahead after strong first half

Cake Box said on Monday that full-year profit is now likely to be ahead of current market expectations following a strong first half.

The cream cakes retailer said it traded strongly in the six months to 30 September, with average sales per store continuing to grow and a record number of store openings. It now expects to report a 40% jump in revenue to around £8.3m and for full-year profit to beat current market views.

Cake Box said 15 new franchise stores were added in the period, bringing the total number of stores to 102. Recent store openings included Bletchley, Northampton and Derby.

Chief executive officer Sukh Chamdal said: "We have delivered a strong trading performance for the period, 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 the average sales per store.

"We look forward to the second half of the financial year with confidence, with a strong pipeline of new franchise stores putting us on track to match the number of stores opened during the first half."

Shore Capital said the maiden results of house stock Cake Box were "outstanding" and upgraded its FY2019 pre-tax profit forecast by 7.5% to £4m. It said that if current trading momentum is maintained, there is scope for further upside.

"Trading on a FY2019 price-to-earnings ratio 20.2x and an EV/EBITDA multiple of 14.4x Cake Box provides an attractive mix of long-term, capital light growth," the brokerage said.

At 1020 BST, the shares were up 7.7% to 176.00p.