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Cake Box profits surpass expectations as costs stabilise

Cream cake retailer Cake Box has said it is set for higher than expected profits (Cake Box/PA)
Cream cake retailer Cake Box has said it is set for higher than expected profits (Cake Box/PA)

Cake Box has said a jump in sales and steady costs have put it on track to deliver higher-than-expected profits for the year.

Shares in the company swung higher in early trading as a result.

The cream cake retailer said it has also benefited from new stores opening and positive demand for click-and-collect in recent months.

Sukh Chamdal, co-founder and chief-executive officer, said: “We are delighted to have delivered a year of solid growth in all our key performance areas and full-year profits slightly above expectations despite the backdrop of uncertain macroeconomic conditions.”

Cake Box told shareholders it expects to report a 9% jump in revenues for the year to March 31 after sales momentum continued over the second half of the financial year.

The retailer said it has also “benefited from the continued stabilisation in the cost of raw materials during the year and seen further efficiency benefits from previous investment in the business”.

As a result of improved costs and higher revenues, it expects profits to come in slightly ahead of market expectations.

Cake Box said it has also witnessed strong demand for new stores from franchisees and has identified target areas for new openings as part of long-term efforts to grow to 400 stores.

The group opened 20 stores last year, growing to an estate of 225 locations.

Mr Chamdal added: “We expect to report an increase in all key financial metrics, an uptick in sales of products online including our ‘click and collect’ offer as well as in-store sales and an increased number of franchise stores.

“We are very pleased with the feedback from the launch of the new Cake Box brand identity from our customers, which will continue to bring new customers to experience our wonderful products.

“I am confident that with our strengthened senior management team and investment in our operations and processes, as well as our dedicated and determined franchisees, we will continue to grow the Cake Box customer base and brand.”

Shares in the company were up 4.4% at 168p on Monday morning.