Cake Box Holdings (LSE:CBOX) — Full Year results for the 52 weeks ended 29 March 2026

0:00 Good afternoon, and welcome to the CAKE BOX Holdings PLC for your results investor presentation. Throughout this recorded presentation, investors will be in listen only mode. Questions are encouraged and they can be submitted at any time using the Q and A tab situated on the top right corner of your screen. Just simply type in your questions and press send. Before we begin, I would like to submit the following poll. And I would now like to hand you over to CEO, Sook Chamdal. Good afternoon to you. Good afternoon, everybody, and thank you for joining us. I'm Suk Chandel, founder and CEO, and I have my CFO, Michael Bother, to present the numbers. So today, I'll walk you through the performance, what's driving it, and how we position for the next phase of growth. Next slide. Slide so slide 20 slide three, FY '26 headline performance.

0:48 2026 has been a year of strong progress for the group, driven record sales, meaningful profit growth, and continued expansion of our store network. What drives that performance is a very efficient asset light model combined with the strength of our two complementary brands, which are helping us reach more customers and more occasions than ever before. We've got a clear strategy in place, strong momentum across the business, and a significant runaway for growth in The UK. So starting with the headline numbers, 2026 was a really strong year for us. We've delivered record system sales of about 111,000,000, which flowed through to nearly 16,000,000 in revenue and 12,400,000 EBITDA.

1:35 What's particularly encouraging is that growth is coming through all the across all the key metrics, revenue, profit and earnings per share up all are up all strongly. On top of that, we continue to expand the estate, opening over 30 new stores during the year, so we're growing both financially and physically at the same time. Plus, we continue our progressive dividend policy. So overall, it's been a year of strong broad based growth. If I step back and explain why this is working so well, at the core, we've got an asset light, highly cash generative model, which is key. Because franchises fund the store openings, we're able to grow the network without heavy capital requirements centrally.

2:20 That gives us a really efficient growth engine. We're expanding footprint, but we're still generating strong cash flow at the same time. And importantly, we're disciplined with that cash, reinvesting into growth while also maintaining a progressive dividend approach for shareholders. So it's a model that scales well and consistency delivers returns. Let me briefly describe what the CAKE BOX is today, the unique combination of assets and capabilities. We now operate two complementary brands. We are largely a pure franchise store model. Our stores are run by local operators, but powered by central production, systems, and marketing, which creates a capital light scalable platform.

3:06 At the core of is our manufacturing platform. We operate four owned manufacturing distribution centers, which give us control over quality, consistency, and cost, and allow us to support a growing national footprint. What sets us apart is this combination of owned manufacturing, a franchise store model, skilled leadership, product let in product led innovation, and an entrepreneurial customer centric culture. I will come back to his detail after Michael has gone through financials. At the heart of the business, we now have two complementary brands driving growth. CAKE BOX is focused on fresh cream celebration cakes. That's our core. Celebrations, occasions, three hundred sixty five days in the year, approximately 68,000,000 population. That's roughly a 180,000 birthdays a day that needs a cake.

4:01 And Ambala adds a second layer through Asian sweets, gifting everyday snacks, bringing in cultural occasions like Diwali and Eid, weddings, and other occasions. CAKE BOX gives us scale, consistency, and high frequency demand, while Mbala adds increment revenue streams through gifting, cultural occasions, and everyday consumption. Together, they significantly expand both our market reach and customer lifetime value rather than relying on a single category. So it isn't just about diversification. It's a more powerful, high value growth engine. And importantly, they sit on one shared platform. As we grow, we benefit from operational leverage and improved returns. We've got over 300 stores and four manufacturing and distribution centers, all supporting a franchise led model.

4:52 I'll hand over to Mike for the financials. Alright. Thank you very much, Suk. So I'm gonna go into a little bit more detail on on the results starting with if we just look at the financial highlights, so Suk has gone through some of these. So what I'll be doing is splitting between the two segments, the CAKE BOX segment and the AMBALA segment, which has highlighted a few of of the KPIs on here where we can see the the increase in our top line system sales, which is our sales to franchise from franchise stores and corporate stores. We can see the the increase in our our our EBITDA as well as the increase in our overall dividend. So if we just look at the the composition of our our our revenue, this is our sales to our franchisees as well as the sales from the corporate stores.

5:45 Sambala and our the corporate stores generated 24% of our group sales in the in the period. Our sales of food and other goods to our our franchisees was 68%, and then the franchise packages was 9%. So this is our EBITDA bridge. So this is how we we walk forward our our underlying EBITDA. On the left, we've got the underlying EBITDA for CAKE BOX of 8,700,000 in the prior year. We then generated an incremental 2,200,000 of gross profit. So our CAKE BOX sales were up to franchisee sales were up 12.4%. Our sales to the the franchisees were up 9.3%.

6:33 Our overheads were up 3%, which meant we had a a really good flow through operational gearing in the in the year, which meant that we ended up from a CAKE BOX segment of 10,500,000 for underlying EBITDA versus GBP 8,700,000 for prior period. Adding the GBP 1,900,000 underlying EBITDA, the maiden contribution from the AMBOLDINGS segment, That's how we ended up with 12,400,000 underlying EBITDA for the year. So just a walkthrough of how our underlying EBITDA came about in the year. So we can see the 12,400,000, which is up 41.6% on the prior year, and then flowing down the p and l to our increase of in in underlying EPS.

7:28 Our reported results, we can see our reported EBITDA was up $10,500,000 to $10,500,000 which is 38.9% up. The difference between the underlying EBITDA and the reported EBITDA was 1,800,000 of underlying non underlying items, which is broken down on the right, which is $1,600,000 of impairment of intangible assets and 160,000 of professional fees, which related to the acquisition of Ambala in the prior year. So just on the CAKE BOX segment, we can see that the system sales was up just shy of $97,000,000 which is 12.4% up year on year.

8:16 Our revenue to the franchisees was up to just shy of $46,000,000 up 9.3, and the underlying EBITDA up 21.7% in the year to million. Our underlying EBITDA margin was up 2.3 percentage points to 22.9%, up from 20.6%. The growth drivers here were like for like sales of the for the full year increase of 4.8%. We successfully opened another 25 new stores, and that was on top of the 26 we opened up in the prior year. And our so our underlying EBITDA outpaced the growth of our sales due to the the the increase in our overheads being less than our sales.

9:06 On Vale's first year, we can see the system sales, so this is the sales to the end customer, was 14,300,000. The underlying EBITDA was 1,900,000, with an underlying EBITDA margin of 13.1. And the store expansion, we added 12 new franchise stores. So just a note here that all new stores opened up in Mbala will be franchise stores. So if we look a bit further into the growth in the system sales of CAKE BOX, two main drivers here was one was the online sales. This increased 19.7% to £22,900,000 which was 24.8% of our franchise store sales in the year, up from 23.5%. The second growth driver was the increase in the sales on delivery platforms. So this is Uber Eats, Deliveroo and Just Eat.

9:56 That was up 46.2% in the year, up from 4,300,000 to CAD6.3 million and accounted for 6.8% of our sales, up from 5.3%. So if we just look at it a bit in terms of the investment, the CapEx spend in the year, Of the $5,900,000 CapEx, we spent $2,600,000 related to the new Bradford warehouse. This is a total build of 5,500,000 of which the remaining CapEx will be spread over the current year, the FY '27 and the first half of FY twenty eight. We then also spent a further just shy of £1,000,000 on our technology platforms and then £2,300,000 in on property, plant and equipment.

10:48 £1,000,000 of that related to Mbola where we invested 300,000 into the leasehold improvements of the production facility and the rest was on new equipment that we bought now to enable us to automate a lot of the production within the facility. Our closing net debt, so we ended off the prior year with a net debt of of 9,000,000. This year, we've that increased by 1,800,000 to 10,800,000 of net debt, and this is the the walk through. So we we added 12,400,000 of underlying EBITDA. Our working capital went up marginally by 1,700,000. We paid over 2,400,000 in terms of tax and interest and $1,400,000 of that was interest on the new loan facilities for the purchase of Ambal in the prior year, net CapEx of 5,800,000 and then we had repayment of finance leases of CAD 700,000 and then dividends in the year, interim dividend for this year, final dividend for the previous year of CAD 4,600,000, which gave us a net closing net debt of GBP 10,800,000, which was 0.88x of EBITDA or rounded up to GBP 900,000, where we started off the year with GBP 1,030,000.

12:15 So that has improved marginally on the prior year end. Our capital allocation priorities going forward. So maintaining CapEx, we're looking at about £1,000,000 per year. The growth investment is in the Bradford facility where we still have another circa 3,000,000 to go. The facility should be complete by the end of this financial year, and then we will will look to commission and start using the facility in quarter one of FY twenty twenty eight. We'll continue to pay down our debt facilities, which we took out to pay off the purchase of of Mbola and we're paying that down at £2,000,000 a year.

13:02 And then dividends, we now the dividend is this year is 1.48 times cover, and that's up from 1.29, which is in line with our our target to get it to 1.5 times. I'll hand you back to Sip then. Thank you very much. So stepping back, this is how we think the business structure structurally. Next slide. Our growth is really driven by two core inputs, like for like performance and continued expansion of the store network. This feeds into a very efficient profitability engine where the franchise model allows us to scale without heavy capital requirements. And then, ultimately, the output is how we use that cash, reinvesting the business, and delivering return to shareholders.

13:51 So it's a very simple but very effective model, growth in efficiency through the system and disciplined cash out. To bring this to life, we structured it around five clear pillars. First is growing The UK footprint, which remains a big opportunity. Then multichannel sales, making sure we're capturing demand both online and in store. Third is data driven marketing, helping us attract and retain customers more efficient effectively. Then product innovation and collaborations, keeping the offers fresh and relevant. And finally, franchise efficiency, making sure our partners remain profitable as we grow. And the key point is they aren't stand alone. They all reinforce each other.

14:38 If we look specifically at expansion, there's still a significant opportunity ahead of us in The UK. We've built good momentum over the last past few years, but importantly, there's still a clear runway to continue growing the store network. And what gives us confidence is that this growth is being driven by experienced multi site franchisees. So it's not just about pace, it's about quality as well. So expansion remains a key driver and one that we can deliver in a controlled and sustainable way. What this slide slide really showed is how our online, offline channels work together to drive growth. Over the last year, we brought in about a 134,000 new customers through our online platform, which helped drive sales online sales of nearly 26%.

15:25 But the important point is these customers don't just stay online. A big part of our strategy is using digital marketing to bring people into our store through click and collect. It's a very cost effective way of acquiring customers because we're turning online demand into physical store visits, which typically results in larger pockets basket sizes and stronger customer engagement. Trust also plays a major role in that journey. When customers first discover the brand online, social proof is critical. We're now seeing that more than 40,000 excellent reviews on Trustpilot, which give customer confidence and helps improve con conversion rates. We're also building stronger relationship with customers once they're in the ecosystem.

16:11 Our email database grew by 29% to almost 1,000,000 subscribers. SMS subscribers increased by 32% to 390,000, and loyalty program now includes around a 138,000 highly engaged members. So overall, we're not just growing our digital presence, We're using it to acquire customer efficiency, drive traffic into stores, and build long term customer loyalty across the entire CAKE BOX network. We're very focused on staying relevant across key seasonal cultural moments throughout the year. Our business is simple and clear. F and A celebrations, birthdays, anniversaries, etcetera. We know all the peaks in addition to F and trading. So starting with new Chinese New Year, Valentine's, Mother's Day, eve can be either side, Easter, second eve, school holidays, exam results, Diwali, Easter European name days, Christmas and New Year's Eve and New Year's Day.

17:12 That keeps our keeps the brand front of mind and drives repeat purchases. We're also starting to see more opportunity from cross brand collaboration between CAKE BOX and AMBLA, which is adding something new commercially. So it's about increasing frequency and basket size through innovation. Alongside growth, ESG remains a priority. We made progress in sustainability, ethical sourcing, and food safety. Engagement across the business remains strong. So we're scaling responsibility responsibly. Alongside of growth, ESG is also a key part of how, one second, of how it's fully integrated and how we operate day to day. From an environmental perspective, we've made strong progress, particularly across renewable energy and reducing packaging, which helps us to scale in a more sustainable way.

18:10 On the operational side, there's a big focus on food safety and supply standards, making sure that just as the network grows, quality and consistency remain high across both brands. And just as importantly, from people's perspective, we're maintaining strong engagement across the business, which is critical in a franchise model where execution at store level really matters. So you got a balance of sustainable improvement, operational efficiencies, discipline, and people engagement, all supported by clear governance from the board and central teams. So just looking ahead, we've entered the new financial year with good momentum, built on strong performance. We've delivered 2020 and delivered in 2026.

18:56 Our focus remains consistent, continue to expand our store network while driving growth through digital product, innovation, and franchise performance. We've also benefited from the broader reach of both brands, which puts us in a strong position to capture more customers and occasions. And while the wider economic environment remains uncertain due to the macroeconomic and geopolitical environment, Our model, particularly, is accessibility and resilience gives us confidence going forward. In short, strong foundations, clear strategy, and significant growth still to come. Thank you everybody for listening, and we'll go to q and a now. So we on the first question alright. Let's have a look which one that is.

19:51 Isn't CAKE BOX payout ratio unsustainable in the long run? Michael? So I'm assuming this applies to to the dividend ratio. Yes. So what we have done so in the past, the dividend ratio has been down to 1.2, 1.3 times. That's why this year, we have now raised that to 1.5, and we've been looking to keep that going on into the future. Any updates on the store in Paris? I was wondering what your international strategy would be going forward. The Paris store is going really well. We just started on the on the delivery platforms like Uber and the French equivalents, and that's double sales. So we're looking at it very carefully, monitoring it, and we're assessing what our next step will be.

20:44 Do you have a wholesale strategy for Ambala? Yes. We do. So we are in contact with many of the major catering firms who want to stock our samosas, pocoras, and sweets. So we're exploring that line and build up a database of all these customers, and and we'll be doing wholesaling as well. So will all the stores be renovated and upgraded to the new brand format? Yes. They will be. We're we're in we have we've got a still to do, but they will all be updated and and rebranded. How do you plan to reduce debt, and what is your target leverage ratio? So we are paying down our debt at a a ratio at a level of 2,000,000 per year. So the one tranche of the debt, 11,200,000, is over seven years and then 4,000,000 which related to the production facility of Mbala is over ten years.

21:46 Our ratio that we look at is is one times EBITDA. Could you provide a perspective on the GLP one drugs recently launched oral version of what were previously injectable medicine? How do you expect this to affect your business if at all? It won't affect our business at all. As you find, even if you're diabetic, right, when it's a a celebration, you tend to have that piece of cake. So or people may eat one slice less, but they won't they won't stop eating cake. So we don't see that affecting us at all. When do you expect to re to open your three hundred and four hundred store, and do you plan to continue operating opening twenty, twenty five stores per year? Is there scope to accelerate the pace of store openings and paying past store growth rates? So, yes, we we are looking at opening up 25 stores a year.

22:42 So the 300 stores should be opened up by the end of of this current financial year as we started the year on 276, but we will continue at that rate. We'll also be opening up at least 10 of our stores a year. When will the annual general meeting be? That's on the September 2. Do you plan to refranchise the corporate owned stores? Yes. We do. It's gonna be over two to three years now. We are looking for franchisees to to open up new stores in the first instance, and then we'll be looking to to refranchise those corporate owned stores. What CapEx expense can we expect going forward? So for the current year, there's a total of $4,000,000 which breaks down in terms of $2,000,000 for The Bradford Warehouse, about $800,000 relating to a new Shopify website app and loyalty scheme, and then $1,200,000 of maintenance CapEx.

23:42 Ambala's EBITDA margin is below CAKE BOX EBITDA margin. Do you expect Ambala's EBITDA margin to match CAKE BOX margin in FY 2027? No, we don't. But we do expect it to within four years to get up to the same level as CAKE BOX's margin. Next question. How much of like for like sales goes with due to an increase in pricing? Of of the 5%, about 2% of it was down to pricing. How is the peristor performing? Move on to both. Done that one. Yeah. Yeah. We've done that one as well. There are many business models in the industry that were making that were nothing more than short lived fads.

24:34 What What makes CAKE BOX a sustainable business? What sets CAKE BOX apart from companies like Beyond Meat or Sweetgreen? We started in 2008. It's been eighteen years, and we're still here. We're expanding. And like I said, there's three hundred and sixty five days in a year. There's 68,000,000 people in this country. That's a 180,000 birthdays, and every birthday is celebrated with a cake. So we're to we're here to stay in the long run. What is the average forward EBITDA margin of franchisees? That is between sort of 10 to 15% depending on on what their their rents are. Why cake box and sponge why are cake box and sponge revenue only grew by 3% in the year, much slower than system sales growth.

25:32 So this was due to a change in the mix of of the sponge sales where customers were trading down from from much larger cakes down to smaller cakes. What are the contributors of the trade receivables? Almost doubled. So within there, we've got deferred revenue, which is from new stores that we were in build at the year end that will now open up in the new year. Stores that opened up to the back end of the of the year, the invoices relating to those stores which are then settled within the first three months of the new year. Where are we? Sorry. You'll be looking at international expansion. Is there anything in that area? We're continuously looking, but we're still concerned in The UK because there's so much more to do at the moment. We've reached 276 stores, the K POX stores. We're aiming for 400.

26:34 We've got 32, and we're aiming for a 100. But it's always in the back of our mind, and we we continue to explore all possibilities. On the Paris store, you mentioned going to be it's going to where you double sell with delivery platforms. Is the next step more stores and see. Sorry. There we go. Yeah. And do you have time on which or when it would be decided? We're in talks with the franchisee to see opening for more stores in in France and watch his space, and we'll let you know as soon as we we do. So is the difference in EBITDA margin between Umbrella and CAKE BOX primarily a result of the difference between franchisee and operating operating model? I think this is the difference is the fact that we're we're now on we have 34 stores open. As we open more stores in Ambola, we'll get much more operational gearing from the the overheads as well as the the production costs, and that will then grow Ambala's margin.

27:46 Can you expand on the unit economics of Ambala's corporate owned stores versus the franchise stores? So in terms of the the corporate owned stores, the the margin on the on the food is higher than than the margin on on the franchise stores. So the margin on on our stores, our own stores, is higher because we are the cost is the actual cost of the product, whereas on Embala, we are adding a margin as we do when we sell product in the CAKE BOX system. So if we just compare the two systems franchisee wise, the the margins food margins for franchisees are 60% in CAKE BOX. They are 50% in Mbala because they're getting a a finished product delivered to them.

28:32 However, their labor is less because they they don't require any labor for for producing any product or as in CAKE BOX, assembling the cakes. So therefore, their margins after food and labor are very similar to the cake box margins, just a slight difference in mix. What are the main cake box products that drove the like for like of sales like for like sales growth? It was cakes. That's what we do. Cakes. We sold more of the cakes, and that's why we get we get what is it about? That's why we get to we drove the like for like sales. I think that looks like the end of this end of the questions. That's great. Yeah. If I may just jump back in there, you have addressed all those questions from investors today, so thank you very much both for that. But, Suk, before we direct investors to provide you with their feedback, which is particularly important to yourself and the company, could I just please ask you for a few closing comments?

29:30 Thank you very much for listening to us today. And as you see, we do what is or or what it says on the tin, and we've been doing that for the last eighteen years. We've grown sustainably twenty, twenty five stores a year, or we deliver on all our results every single year. We still got our progressive dividend policy, which we continue to which we hope to continue into years that to come. Thank you very much, everybody. Alright. Thank you, everybody, for listening. Fantastic. So, Michael, thank you once again for updating investors today. Could I please ask investors not to close the session, as you now be automatically redirected to provide your feedback, which will help the company better understand your views and expectations? On behalf of the management team, we would like to thank you for attending today's presentation, and good afternoon to you all. Thank you.

30:20 Thank you.