Final results presentation for the year ended 31 st March 2019 1 - - PowerPoint PPT Presentation

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Final results presentation for the year ended 31st March 2019

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1 Introduction to Cake Box – Sukh Chamdal, CEO 2 Operational Highlights – Dr Jaswir Singh, COO 3 Financial Highlights – Pardip Dass, CFO 4 Summary and Outlook – Sukh Chamdal, CEO

Agenda

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• Opened

the first Cake Box concept store in 2008, co- founded the franchise business in 2009

• 35+ years’ experience in the food

manufacturing and food retail industry

• Consultant for a food equipment

company specialising in high volume food production

• Previously owned a food catering

company supplying vegetarian food for functions and events

• Co-founded

the Cake Box franchise business in 2009

• Qualified Accountant (10+ years

PQE)

• 15+ years’ experience within the

food and beverage industry

• Previously worked for Starbucks,

Masala Zone, Group Chez Gerard Restaurants and Real Pubs where he was Finance Director

• Joined the business in 2010 as

the Commercial Director

• Qualified medical doctor
• Successfully

ran his

• wn

restaurant business for nine years before joining Cake Box

Proven management team supported by a highly experienced board

Dr Jaswir Singh

Ch Chief Operating Officer

Pardip Dass

Ch Chief Financial Officer

Sukh Chamdal

Ch Chief Executive Officer

Your presenters today

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Sukh Chamdal

Chief Executive Officer

• Business conceived in 2008 with a single shop in East

London, now headquartered in Enfield, Greater London

• The Group has grown to an estate of 113 franchise stores as

at 31st March 2019

• Specialises in making delicious, high quality, bespoke

celebration fresh cream cakes instore while customers wait

• All cakes and slices are egg free
• Personalisation offered even while you wait
• One hour click and collect available for popular cakes
• Strong growth profile, currently opening on average six

new stores per quarter

• Attractive proposition for franchisees with average

EBITDA of c.£94k* per annum

* Based on mature stores - “mature store” defined as store that has been open for 12 months or longer

Introduction to Cake Box

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• Freshly hand-made cakes and slices in-store using fresh cream
• Cakes available to order in-store or online for collection
• Hundreds of celebration cake designs to choose from
• Cakes can be personalised on the spot with a free message
• Personalised photos printed on sugar paper can be added to any cake
• Large range of cakes for immediate purchase from patisserie displays
• Large selection of cake sizes ranging from 8 to 120 servings per cake
• Individual hand made cake slices start from only £2.50

Product range

Product Price Cake Slice serves 1-2 £2.50 Loaf Cake 420g serves 4-6 £4.99 Cheese Cake serves 8 £7.99 Fruit Gateaux serves 8 £19.99 Black Forest serves 8 £22.99 Platter Cake serves 64 £69.99

Ex Examples of product pricing

Products

The development of the Group’s franchise estate from 31st March 2010 to 31st March 2019 Area Stores London within M25 38 South East 26 West Midlands 17 East Midlands 13 Yorkshire 10 North West 5 Scotland 1 North East South West 2 1 Total 113

A rapidly growing portfolio

• f franchise stores

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Dr.Jaswir Singh

Chief Operations Officer

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Operational highlights

IPO 27 113 2 New

27th JUNE 2018 NEW STORES OPENED TOTAL NUMBER OF STORES ADDITIONAL WAREHOUSES ACQUIRED TRAINING CENTRE

• IPO on AIM successfully completed in June 2018
• 27 new franchise stores added in the period (FY18: 23 new franchise stores)
• 113 franchise stores operating by 31st March 2019
• 100th store in Bletchley - very successful opening
• Bletchley store dedicated as Training Centre
• Further R&D of new products
• Acquired two new production and distribution centres in the Midlands and Yorkshire

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Franchisee operational highlights

£30.7m £6.6k

+58%

+6.5%

20

£94k

RETAIL CAKE SALES AVERAGE WEEKLY SALES*

ONLINE SALES GROWTH

LIKE-FOR-LIKE SALES GROWTH

NUMBER OF MULTIPLE FRANCHISEES

AVERAGE STORE EBITDA*

• Franchisee total turnover up by 18% to £30.7m (FY18: £25.9m)
• Average franchise store sales £6.6k per week (FY18: £6.4k)*
• Online sales up 58% to £4.39m (FY18: £2.78m)
• Like-for-Like sales up +6.5% (H1 +4.4%, H2 +8.6%)**
• 20 Franchisees now have more than one store
• Franchisees earn an average of £94k EBITDA per annum per store*
• Strong pipeline of potential new franchisees and existing ones looking for additional stores

*Based on mature stores - “mature store” defined as store that has been open for 12 months or longer ** Like-for-like: Stores trading for at least one full financial year prior to 31 March 2019

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Pardip Dass

Chief Financial Officer

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£3.70m £4.44m

FY18 FY19

Financial highlights

*Excluding exceptional AIM IPO costs of £599k and fair value uplift of £444k

£12.7m £16.9m

FY18 FY19

REVENUE EBITDA* PROFIT BEFORE TAX*

£16.9m £4.4m £4.0m

+33% +20% +19%

YEAR-ON-YEAR YEAR-ON-YEAR YEAR-ON-YEAR

CASH AT BANK UNDERLYING EPS FINAL DIVIDEND

£3.1m 7.90p 2.4p

up £0.6m +14% +50%

(2018: £2.5m) (2018: 6.92p) (2018: 1.6p)

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Group income statement

12 months to 31 March 2019 12 months to 31 March 2018 (audited) (audited) Notes £k £k Revenue 16,909 12,739

Revenue Growth +33% Year-on-Year

Cost of sales (9,189) (7,263) Gross profit 7,720 5,476

Gross margin improved to 45.7% from 43.0% as a result of higher yields from new ovens

Administrative expenses (3,742) (2,273) Fair Value Movement 444 Other operating income 28 195 Operating profit 4,450 3,398

Operating margin decreased from 2018 due to PLC costs in FY19

Exceptional items (599)

• One off IPO costs of £599k

Net finance costs (42) (45) Profit before tax 3,809 3,353 Corporation Tax (806) (568) PROFIT AFTER TAX 3,003 2,785

Underlying Profit +13% Year-on-Year EARNINGS PER SHARE

Basic & diluted 7.51p 6.96p Adjusted 7.90p 6.96p

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Group balance sheet

31-Mar-2019 31-Mar-2018 (audited) (audited) Notes ASSETS £k £k Non-current assets 5,101 3,943

Purchases of 2 New Freehold warehouses

Inventories 910 709 Trade and other receivables 1,532 1,301 Assets held for sale 650

Romford Warehouse under sale

Cash and cash equivalents 3,082 2,506

Net cash outflow of £750k relating to new warehouses

Current assets 6,174 4,515 TOTAL ASSETS 11,275 8,458 Current liabilities (2,492) (2,199) Increase in Corporation Tax Non-current liabilities Borrowings (1,938) (1,457)

£650k new Loan facility for new warhouses

Deferred tax liabilities (222) (141) (2,160) (1,599) TOTAL ASSETS 6,623 4,661 Issued share capital 400 Revaluation reserve 821 455 Retained earnings 5,402 4,205 SHARE CAPITAL AND RESERVES 6,623 4,661

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Group cash flow

31-Mar-2019 31-Mar-2018 (audited) (audited) Notes £k £k Cash from operating activities: Profit before income tax 3,809 3,336 Adjusted for: Depreciation 431 319 Other non Cash Items (641) (122) Cash generated by operations 3,598 3,532

Cash generation flat from 2018 due to PLC & IPO costs in FY19

Finance costs 49 47 Taxation paid (497) (363) Net cash inflow from operating activities 3,149 3,216 Net cash flows used in investing activities (1,991) (340)

Purchases of two new freehold warehouses

Cash flows from financing activities: Dividends paid (1,040) (522) Other 458 (325)

New borrowings £650k

Net cash flows used in financing activities (582) (847) Net (decrease)/increase in cash and cash equivalents 577 2,030 Cash and cash equivalents brought forward 2,506 476 Cash and cash equivalents carried forward 3,082 2,506

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First Year results announced with strong growth in sales, profits and dividend Current trading and

• utlook
• Strong first full year results since IPO and the

Board is pleased with trading so far in FY20

• 113 franchise stores in operation as at 31st March 2019
• 4 new franchise stores opened post period end with a

further two expected by end of Q1, FY20

• Strong pipeline of new franchise stores and confident of

delivery of our growth strategy of 6 new franchise stores a quarter (2 a month)

• Further R&D in new products to continue
• Keeping up with trends, vegan loaf cakes being recently

launched

• The Board is confident about the new financial

year

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Appendix

Our operations

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Non-executive board of directors

• Currently Chairman at BonHill

Group Plc, NED at Network Rail Property, Chairman Advisory Board at Warwick Business School. Neil is also a Member of the Council at The University of Warwick.

• Previously

Chairman at MarketTech Holdings PLC , Sirius RE PLC and Martins Properties Chelsea LTD. Non exec director

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Intu Properties plc for ten years.

• Previously

Group Property Director of J Sainsbury

• Awarded MBE for work in the

retail sector

• Non-Executive Director of AIM

listed Stride Gaming plc

• Previously general counsel of

Domino’s Pizza Group plc and Selfridges Group

• Currently chief executive and

founder of new fast casual premium chicken concept

• Corporate lawyer by training
• Non-Executive Director of AIM

listed Kape Technologies and The Marketing Group and Green Biologics Ltd

• Previously CFO of Pilat Media

(AIM listed) from 2001 to 2014

• Chartered accountant

Neil Sachdev MBE

No Non Executive Chairman

Adam Batty

No Non Executive Di Director

Martin Blair

No Non Executive Di Director

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An attractive proposition for franchisees

Tur Turnkey Package So Sociable Hours No No MSF or Marketing Levy

* Based on mature stores - “mature store” defined as store that has been open for 12 months or longer

Po Potential

To own multiple sites

18 18 mo month

payback on average

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An attractive proposition

§ Strong financial track record § History of steady and profitable expansion § Strong like-for-like growth – FY19 +6.5% Proven model and track record of profitable growth Significant scope for expansion Limited Competition

§ Currently growing on average by two stores a month § Significant number of potential locations for new stores identified § Minimal capital required for expansion due to franchise model § Very attractive proposition for franchisees § New products including vegan range

Strong income credentials § No direct national competitor for egg-free, fresh cream, personalised cakes § Strong and predictable cash flow generation from low risk franchise model § A progressive dividend policy which reflects the cash flow generation and earnings of the Group

Low risk income with strong growth potential funded by franchisees