Cake Box Holdings PLC’s (LON:CBOX) shares rose after the egg-free baker said trading in the first two months of the second half has been “encouraging” and is on track to meet its full-year store openings target.
The AIM-listed firm has opened five new franchises since October and is expected to catch up over the next months, considering that in the first half it only opened nine stores as opposed to 15 in the same period last year.
READ: Strong appetite grows like-for-like sales at Cake Box, despite slowing store rollout
In the six months to 30 September, revenue picked up 6% to £9mln while pre-tax profit jumped 27% to £2mln.
Underlying earnings, however, dropped 9% to £2mln due to further investment for the expansion of the business as well as additional costs after joining the London Stock Exchange last year.
Net cash at the end of the period was £1.5mln, up 85% year-on-year, while the interim dividend was pumped up 33% to 1.6p per share.
House broker Shore Capital said in a note that the phasing of new stores and the timing of receipt of franchise fees have temporarily hit accounts, but forecast that the company will deliver 20% annual growth in earnings per share over the next three years as well as double-digit free cash flow yield in 2022.
“Our continued momentum has again led to a good financial performance during the half,” said chief executive Sukh Chamdal in a release.
“With initiatives continuing apace to enhance our product offer, and with strengthened operational capabilities through our new warehouse and distribution facilities, we remain on track for another year of growth,” he added.
Shares were up 4% to 145p on Monday morning.