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Cake Box - Gross margin lifts sharply

January 2024

Investing in shares may lose you all or some of your money. Past performance is no indication of future performance. Some of the shares recommended here may be small company shares, which can be relatively illiquid and hard to trade and this makes such shares more risky than other investments.

  • Epic Code:
  • CBOX
  • Price:
  • 170.5p
Following last month’s nicely timed buy note, the shares rallied after well received H1 results. Franchise store sales rose 12.9% to £36.1m, helped by a 15% jump in franchise online to £7.7m following the launch of a new CRM system in May and website in June. That led to EBITDA growing 10.4%. Impressively, gross margins jumped from 47.7% to 49.6% due to the partial easing of input cost increases, enhanced efficiency savings from the distribution centres and a near 20% increase in higher margin sponge sales. Cash rose 30% to £7.1m after paying out £2.2m in dividends. The number of franchised stores increased from 196 to 214 while the pipeline is strong with 44 deposits held at the period end. The shares remain ...

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