Cake Box Holdings PLC (AIM:CBOX) said it is on track to meet market expectations for the current year after it achieved revenue growth in the first half against “very strong” comparatives.
Revenue in the six months to 30 September 2022 was £16.8mln, up 2.1% on the same period last year, the specialist retailer of fresh cream cakes said in its earnings release.
Like-for-like sales saw a slight decline of 1.1%, while franchisee store sales rose 7.9% to £31.8mln and total franchisee sales including kiosks grew 9.9% to £34.7mln.
Although performance was impacted by last summer’s long heatwave, trading has improved post summer, with franchise sales up like-for-like 4.6% and online sales increasing 6.8% in October, Cake Box said.
Pre-tax profit fell 45.1% to £2mln in the first half, reflecting the challenging trading environment, cost pressures and increased investment in the business.
The company opened 11 new franchise stores in the period and had 196 franchise stores at end-September.
It has since opened three new stores and has a strong pipeline for future openings, with 44 deposits held at the period end. It is also in negotiations for further supermarket kiosk openings.
Looking ahead, chief executive Sukh Chamdal said: “Whilst the board remains cautious in light of the uncertain economic climate and the unpredictability in consumer spending, the group's current trading is on track to achieve full-year market expectations.
“Longer term, the board is confident in Cake Box's significant potential, underpinned by its attractive customer and franchisee proposition and bolstered by ongoing investment in the group's functions and capabilities, and a strengthened leadership team."
The company raised its interim dividend by 5% to 2.625p.
It had net cash of £4.2mln as at 30 September 2022, up from £4.1mln a year earlier.
Shares climbed 5.96% to 115.50p.