REG - Cake Box Holdings - Final Results
11/06/2024 07:00
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RNS Number : 8846R Cake Box Holdings PLC 11 June 2024
11 June 2024
Cake Box Holdings plc
("Cake Box" or the "Company" or the "Group")
Audited Full Year Results for the 12 months ended 31 March 2024
Robust growth in revenues and profits driven by increased franchise store
sales, new store openings, and enhanced efficiencies
Cake Box Holdings plc, the UK's largest retailer of fresh cream celebration
cakes, announces its audited full year results for the twelve months ended 31
March 2024.
Financial Highlights
As restated
Full Year ended Full Year ended
31-Mar-24 31-Mar-23 Change***
Revenue £37.84m £34.80m 8.7%
Gross profit £19.94m £17.17m 16.1%
EBITDA* £7.70m £6.66m 15.6%
Adjusted EBITDA** £7.46m £6.66m 12.0%
Profit before tax £6.26m £5.43m 15.1%
Adjusted profit before tax** £6.02m £5.43m 10.6%
Net cash £7.31m £6.12m 19.5%
Basic earnings per share 11.65p 10.59p 10.0%
Final Dividend recommended 6.10p 5.50p 10.9%
* EBITDA is calculated as operating profit before depreciation and
amortisation
** Adjusted EBITDA and profit before and after tax are after adjusting for
exceptional items
*** % change is based on amounts in the Consolidated Statement of
Comprehensive Income
· Group revenue up 8.7% to £37.8m (2023: £34.8m), reflecting an
increase in franchise store like-for-like sales and the addition of 20 new
stores opening in the year.
· Gross margin increased to 52.7% (2023: 49.4%), due to enhanced
efficiencies in the production facilities and the stabilisation of raw
material and freight costs.
o The gross margin has been impacted by the national marketing levy revenue
in FY24, as the costs associated with the revenue are included in
administrative expenses
o Excluding this impact, gross margin for FY24 was 50.9%
· Strengthened balance sheet with an increase of 19.5% in net cash to
£7.3m (2023: £6.1m).
· Cash from operations of £6.3m (2023: £6.3m).
· Total dividend per share increased 10.8% to 9.0p (2023: 8.125p).
Operational Highlights
· Total number of franchise stores across the UK to 225 (2023: 205).
· 20 new franchise stores added (2023: 20), entering new locations such
as Liverpool, Cambridge and Didsbury.
· 16.1% growth in online sales to £16.1m (2023: £13.8m).
· Strategic investment for growth helped to drive up sales, including a
brand refresh, a new website and customer relationship management ("CRM")
system, and a co-funded annual marketing fund with our franchisees.
· Launched a number of new products, including the popular Premium
Mango and Speculoos caramelised biscuit ranges.
Franchisee Highlights
· Franchisee total turnover increased 9.1% to £78.8m (2023: £72.1m).
· Like-for-like(1) sales growth of 4.4% in franchise stores (2023:
1.0%).
· Number of multi-site franchisees increased to 47.
Current trading and outlook
· Sales performance continues to be robust, with trading so far in FY25
in line with management expectations.
· Whilst the trading environment for 2025 is expected to be challenging
with the continuing uncertain macro-economic conditions, the opening of new
stores, investment in marketing, alongside a brand refresh roll out and new
website, will help drive demand.
(1) Like-for-like: Stores trading for at least one full financial year prior
to 31 March 2024.
Sukh Chamdal, Chief Executive Officer, said: "It has been a successful year
for Cake Box delivering robust growth across all areas of our business. Our
strategic initiatives, including new store openings, enhanced marketing
campaigns, and innovative product launches, have driven a 9% increase in
revenues. We are pleased to have delivered full year EBITDA ahead of market
expectations and to have also further strengthened our balance sheet.
"The launch of our new CRM system, e-commerce website, and brand refresh,
along with the success of our increased investment in marketing, has enhanced
our brand awareness and customer experience, improving our presence and
helping to drive up demand.
"Our success is a testament to the dedication of our team, the franchisees,
and the loyalty of our customers. We look forward to building on this
momentum, continuing to expand our store estate, and further solidifying Cake
Box as the go-to destination for fresh cream celebration cakes."
For further information, please contact:
Cake Box Holdings plc At +44 (0) 20 4582 3500 on the day and thereafter
Sukh Chamdal, CEO
Michael Botha, CFO
Shore Capital +44 (0) 20 7408 4090
Stephane Auton
Patrick Castle
Rachel Goldstein
Fiona Conroy - Corporate Broking
Gracechurch Group +44 (0) 20 4582 3500
Harry Chathli cakebox@gracechurchpr.com
Alexis Gore
Chair Statement
I am delighted to present my inaugural Chair's Statement for Cake Box since
being appointed to the role in October 2023. It is an honour to have taken up
the role of Chair and to contribute to the continued success of Cake Box, one
of the UK's retail success stories.
Since joining as a Non-Executive Director upon our listing on the AIM market
of the London Stock Exchange in 2018, I have been consistently impressed by
the entrepreneurial ethos, commitment to values, quality of products and
ambition to drive growth.
It is pleasing to report a year of growth for Cake Box, cementing the
Company's position as the UK's largest retailer of fresh cream celebration
cakes. Despite navigating uncertain economic conditions, Cake Box has
demonstrated resilience and strength, continuing to deliver growth across the
business.
Strategic Growth Initiatives
At the start of the year, the Board and management team outlined five key
strategic pillars to strengthen the Company's operations and build a platform
for long term sustainable growth. These pillars focused on enhancing our
presence across multiple sales channels, expanding our store estate, adopting
a data-driven approach, optimising operational efficiencies, and strengthening
our governance and commitment to Environmental, Social, and Governance ("ESG")
initiatives.
Throughout the year, our management team diligently executed these strategic
initiatives, resulting in a strengthened foundation on which the Company may
continue to thrive and pursue its growth. Our multifaceted approach, blending
our high street presence with digital marketing strategies and an enhanced
online sales platform, not only boosted customer demand and improved customer
retention, but also amplified engagement levels significantly.
Entrepreneurial Excellence
Our franchisees and their success are the backbone of the business, embodying
the entrepreneurial spirit that defines Cake Box. Our franchise stores
continued to perform well with like-for-like sales increasing year on year and
we successfully opened 20 new high street stores, a testament to the
resilience and effectiveness of our franchise model. We also benefited from
the continued stabilisation in the cost of raw materials during the year and
gained further efficiency benefits from investment in the business.
New look for next phase of growth
The Company is now seeing the benefit of investment in key areas to position
it for long term sustainable growth. Significantly, our focus on targeted
marketing initiatives, coupled with the launch of an upgraded website
featuring our convenient 'Click and Collect' service, underscores our
commitment to enhancing customer experience and driving operational
efficiency. Adopting a data-driven approach has further empowered us to
discern market trends, attract fresh consumers, and nurture lasting loyalty
among our customer base.
By expanding our reach into new areas and demographics, our multi-channel
strategy has yielded tangible results, enabling us to connect with additional
customers through various touchpoints. Additionally, the successful launch of
a brand refresh in the second half of the year has been well-received and is
already contributing to increased awareness of Cake Box and demand for our
products.
Community Commitment
We believe our stores can serve as catalysts for boosting foot traffic on the
high street and play their part in fostering a sense of community within local
areas. Cake Box has been built on solid values and our strong relationships
with our franchisees and customers underpin a commitment to making a positive
difference in the communities we operate in.
We continue to initiate and support local initiatives to give back to the
communities that support us and are committed to ensuring our operations align
with our ESG principles.
Board changes
We continue to strengthen our Board and management team. Following my
appointment as Chair, I am excited to continue helping Cake Box in the next
phase of its development. Having been on the Board as an Independent
Non-Executive Director since the Company listed on AIM in June 2018, I have a
deep understanding of the business and appreciation of what is required to
continue our growth.
I replaced Nilesh ("Neil") Sachdev who, after more than five years in the
role, stepped down from the Board. I would like to take this opportunity to
thank him for his significant contribution to the business.
In February 2024, we welcomed Shaun Smith - who has extensive leadership and
board experience - as an Independent Non-Executive Director. Shaun sits on the
Remuneration, Nomination and ESG Committees and will become Chair of the Audit
Committee following the Annual General Meeting ('AGM') on 30 July 2024.
Looking ahead
Cake Box is well-positioned to capitalise on anticipated market trends in the
celebration cakes and sweet baked goods segments. There are many exciting
opportunities for growth ahead for the business and we are committed to
continue to produce high quality products that resonate with our customers.
As evidenced by the continued expansion of our store estate, with 225 Cake Box
shops trading as at 31 March 2024, we remain steadfast in our commitment to
growth. Our ambitious target of reaching 400 stores in the medium term
underscores our confidence in the scalability and resilience of our business
model. Additionally, our investment in marketing and e-commerce capabilities
will help to broaden our reach and increase demand.
With a strengthened, experienced leadership team and ambitious strategy, I am
confident that the Group will continue to deliver growth for all stakeholders.
Finally, I would like to thank the Board and the entire Cake Box team for
their dedication and tireless efforts and extend my gratitude to our
shareholders for their continued support.
Martin Blair
Chair
Chief Executive's review
I am proud to report a year of excellent progress at Cake Box with strong
growth across the business. Throughout the year, the strategic initiatives we
implemented yielded excellent results, with increases in sales, profits, cash
reserves, and dividends. This success is a testament to our commitment to cost
discipline and our ability to maintain robust trading momentum despite
challenging macroeconomic conditions.
The Company invested in a comprehensive brand refresh, revamped its e-commerce
platform with a new website, and launched a new CRM system. Our expansion
efforts, both in physical stores and online, have seamlessly integrated the
traditional charm of brick-and-mortar establishments with the latest
technology, optimising our reach, enhancing customer engagement, and
increasing online sales.
Strategic initiatives delivering growth
In early 2023, we identified key strategic initiatives to invest in the
business and drive growth for 2024 and beyond. It is pleasing to report that
these initiatives were successfully implemented, bringing tangible results for
Cake Box.
Franchise Expansion
Our franchise partners continue to play a vital role in our growth story.
During the period, we opened 20 new stores, bringing our total store count to
225 as of 31 March 2024 (FY23: 205). This included expansion into new
locations such as Cambridge, Didsbury, and Liverpool, which has allowed us to
connect with new customers and increase brand awareness.
Trading momentum was strong during the year with an increase in total
franchise store sales of 9.1% and like-for-like sales increase of 4.4%,
reflecting new store openings and strong customer demand.
We remain committed to further expanding our footprint, with a target of
reaching 400 stores. Progress with external property consultants, appointed to
develop a strategy to reach this goal, has been encouraging and we have
already identified a number of areas with potential either for a first Cake
Box store or additional stores to complement our existing presence.
The demand for new stores has remained strong among our existing franchisee
network, as well as in the form of inquiries from prospective franchisees. We
now have 95 franchisees with 47 of them operating more than one Cake Box store
as of 31 March 2024.
In addition to our focus on new stores, we concentrated on supporting our
franchisees to help deliver operational efficiencies. This, coupled with
stabilised food costs, resulted in an increase in Group margins to 52.7% and
15.1% increase in profit before tax. The positive downward trends for utility
costs combined with the stabilisation of food costs, has had a positive impact
of franchisee margins and profitability.
Marketing and multi-channel approach
Our brand awareness, customer experience and loyalty, has been further
enhanced by the success of our refined marketing strategy and capabilities.
Investment in marketing, particularly in digital and e-commerce capabilities,
has been a focal point of our growth strategy, and helped online sales
increase by 16.1% for FY24.
Our online 'click-and-collect' feature, whereby customers can order a
personalised, fresh cream celebration cake online and collect it within the
hour, sets us apart from the competition and is constantly growing in
popularity with our customer base.
The launch of our new website in June 2023 has seen excellent performance,
with website visits up 40.5% since launch, a 13.3% increase in the volume of
orders, and improved conversion rates translating into higher sales from both
new and returning customers.
In addition, we created an annual central marketing fund with our franchisees,
aimed at enhancing digital marketing initiatives to raise brand awareness and
expand our customer base. National radio and outdoor advertising campaigns,
launched in September 2023, have further bolstered brand awareness and helped
attract new customers to Cake Box.
Harnessing data for growth
Central to our marketing strategy is the utilisation of customer data to drive
long-term sales and support our multi-channel approach.
Since launching a new CRM system in May 2023, we have seen strong growth in
customer subscriptions and engagement. Marketing subscriptions increased by
68.0% and we grew our SMS sign ups from a zero base to 182,000 as at 31 March
2024, underscoring the benefits of our data-driven approach.
As part of this strategy, we continue to invest in our technology systems to
build a complete end-to-end 'make to sell' process - the 'Cake Box Hub'. It is
a centralised system to connect all our customer touchpoints and will further
enhance our ability to leverage data insights driving commercial efficiencies
and sales in the future.
Through understanding consumer preferences and behaviour patterns, going
forward, we will be able to tailor our products, promotions and customer
experience to better resonate with our target audience, ultimately increasing
customer loyalty.
Brand refresh
In the second half of the year, we unveiled our new brand identity to broaden
our appeal to new customers and demographics and amplify opportunities for new
store openings. Nine of the new stores opened during the financial year, now
carry the new branding, which will be rolled out across the business.
The positive reception of our new brand identity from customers, franchisees
and partners, reaffirms Cake Box's position as a market leader and provides an
excellent foundation for increased brand recognition and heightened demand.
In addition, leveraging our existing distribution channels and growing brand
awareness, Cake Box can effectively penetrate new regions in the UK and reach
untapped customers, further driving sales and market share expansion.
The market opportunity
The market opportunity for our company within the Celebration Cakes and Sweet
Baked Goods segments is significant and poised for growth. In 2022, these two
main target markets had a combined market value of £2.85 billion and were
forecast to grow to £3.2 billion by 2027.
This presents a great opportunity for Cake Box to cater to the growing demand
for high-quality celebration cakes and sweet baked goods and we are
well-positioned to capture market share and expand on our position in this
space.
Outlook and current trading
Trading so far in FY25 has been in line with management expectations. Whilst
the outlook for the retail sector remains challenging, we are well positioned
for the year ahead.
The increased investment in our marketing campaigns, alongside the refresh
of our brand and website, will further strengthen Cake Box's presence and will
help drive demand.
We will continue to introduce new product lines, designs and customisation
options to enhance our celebration cakes. Through our revamped e-commerce
platform and click and collect online feature, we are reaching more people,
whilst making it easier for our customers to get the cakes they want.
By staying alert and responsive to market trends, we will continue to position
ourselves as a leader in the celebration cakes and sweet baked goods industry,
able to capture a larger share of the growing market and driving sustainable
long-term growth for our company.
Cake Box remains an asset-light, and cash-generative business with a robust
balance sheet. Our plans are in place to drive customer demand with our new
marketing initiatives, and to continue our store expansion programme with a
healthy pipeline of new store openings.
Sukh Chamdal
Chief Executive Officer
Financial review
FY 24 As restated Change***
FY 23
£m £m
Group Revenue 37.84 34.80 8.7%
Gross Profit 19.94 17.17 16.1%
Operating expenses before exceptional items (13.76) (11.60) (18.7%)
Exceptional items 0.24 -
Operating profit 6.42 5.57 15.1%
Net finance cost (0.16) (0.14) (16.4%)
Profit before tax 6.26 5.43 15.1%
Adjusted profit before tax** 6.02 5.43 10.6%
Taxation (1.61) (1.20) (33.1%)
Profit for the period 4.65 4.23 10.0%
Adjusted profit for the period** 4.41 4.23 4.2%
Revaluation of freehold property 0.22 0.19
Deferred taxation on revaluation (0.06) (0.04)
Tax rate changes on revaluation reserve for freehold property - (0.34)
Total comprehensive income for the year 4.81 4.04 19.1%
EBITDA 7.70 6.66 15.6%
Adjusted EBITDA** 7.46 6.66 12.0%
* EBITDA is calculated as operating profit before depreciation and
amortisation
** Adjusted profit before- and after tax and adjusted EBITDA are after
adjusting for exceptional items
*** % change is based on amounts in the Consolidated Statement of
Comprehensive Income
Group revenue
Reported Group revenue for the year increased by 8.7% to £37.8m (FY23:
£34.8m). This was achieved through an increase in franchise store
like-for-like sales of 4.4% as well as the addition of 20 new franchise stores
opening in the year. This was a very positive outcome, considering the
continued challenging economic and tough consumer environment, with high
inflation and interest rates impacting on consumer's disposable income.
Gross profit
Gross profit as a percentage of Group revenue increase from 49.4% to 52.7% for
the full year. This increase was as a result of the efficiencies gained from
investments in the production facilities in prior years and the stabilisation
of raw material and freight costs during the year. The stabilisation of
costs enabled the Group to minimise any increase in pricing to its franchisee
partners, which in turn benefited the margins of the franchisees. Pricing to
our customers was reviewed on a regular basis to ensure we remained
competitive in a continued tough economic climate throughout the year. We were
able to keep retail sales price increases to a lower rate than the food retail
sector, as in the prior year, while not impacting on volumes.
EBITDA
Reported EBITDA increased 15.6% to £7.7m as a result of the increased Group
revenues, with progression in gross margins offset by the planned increase in
overheads. Adjusted EBITDA increased by 12.0% to £7.5m for the year. The
difference between Reported and Adjusted EBITDA related to the reversal of a
£0.2m provision created in prior years for a website data breach, which has
been classified as an exceptional item now that the matter has been closed.
Exceptional items
The exceptional income items comprise solely of a £0.2m provision made in
FY21 following a website data breach.
Following information provided to the Information Commissioner's Office
("ICO") regarding the enhancement of the Group's security measures, the ICO
informed the Group that it would not be pursuing any enforcement action
relating to the case and considered the case closed.
As a result, the Group has released this provision in the 2024 financial
results and classified the release as an exceptional item, in line with the
treatment of the original provision.
Balance sheet
The Group's balance sheet has strengthened further, with cash balances of
£8.5m (FY23: £7.4m). The Group's only debt remains its mortgages of £1.1m
(FY23: £1.2m), secured by its freehold properties in Enfield, Bradford and
Coventry.
As the Group operates a franchise model, it has relatively low capital
expenditure requirements and flexible cost base.
The Board is confident that the Group's cash levels and liquidity are
sufficient for the operational requirements of the Group, despite the
continued tough macro-economic climate.
Property
At each year end, surveyors are instructed to value the Company's three
freehold depots, Enfield, Bradford and Coventry, to ensure a consistent value
base. The new valuation has resulted in a further uplift of £0.2m in the
reported values of the three sites for the consolidated report and accounts.
In the 2022 financial year, the Group entered into a lease for a warehouse in
Enfield, which supports the growth in all three of the Company's production
sites. This site is classified as a right-to-use asset in the report and
accounts. All bulk and raw material stock, utilised in the production of
sponge, is stored in this warehouse and distributed to the three sites when
required. The centralisation of stock has increased control and minimised
stock losses.
Taxation
The effective rate of taxation was 25.6% (FY23: 22.2%). As part of the Budget
2021 announcement by the Government on 3 March 2021, the corporation tax rate
has increased for all companies with profits above £250,000 to 25% from 19%.
This was effective from 1 April 2023 and therefore applied for the full
financial year under review.
The effective tax rate was higher than the statutory rate due to expenses not
allowable for tax purposes and adjustments relating to prior periods.
Earnings per share ("EPS")
Reported earnings per share was 10.0% above the prior year, at 11.65p (FY23:
10.59p). Profit before tax ("PBT") is 15.1% ahead of the prior year. The
difference in the growth year on year between PBT and EPS is due to the
increase in the corporation tax rate from 1 April 2023 to 25% (FY23: 19%).
Adjusted earnings per share was 11.04p (FY23: 10.59p), 4.2% ahead of the prior
year. This is after the adjustment for the exceptional item previously
mentioned (note 10).
The number of shares in issue was 40,000,000 and is unchanged since the
Company's IPO in June 2018.
Diluted earnings per share was 8.0% above the prior year, at 11.44p (FY23:
10.59p). The difference in the basic and diluted earnings per share is due to
the dilutive effect of the share options granted during the year.
Dividend
Following the positive results and cash generation reported for the 2024
financial year, the Board is pleased to recommend a final dividend of 6.1p per
share (FY23: 5.5p). The total dividend for the year will total 9.0p (FY23:
8.125p), a 10.8% increase year on year, continuing the progressive dividend
policy employed by the Board. The dividend cover is 1.23x (FY23: 1.3x).
If approved by the shareholders at the Company's AGM on 30 July 2024, the
final dividend of 6.1p will be paid on 6 August 2024. The record date for
shareholders on the register will be 12 July 2024, with an ex-dividend date of
11 July 2024.
Cash position
FY 24 As restated
FY 23
£m £m
EBITDA 7.70 6.66
Exceptional items (see note 10) (0.24) -
Adjusted EBITDA 7.46 6.66
Add back:
Working capital (0.44) 0.97
Share-based charge 0.09 -
Net finance cost (0.16) (0.14)
Corporation tax (0.83) (1.34)
Free cash flow 6.12 6.15
Capex (1.35) (1.96)
Proceeds on sale of assets 0.05 0.06
Dividends (3.36) (3.09)
Repayment of finance leases (0.27) (0.26)
Movement in net cash 1.19 0.90
Opening net cash 6.12 5.22
Closing net cash 7.31 6.12
Adjusted EBITDA of £7.5m was £0.8m above the prior year (FY23: £6.7m). This
increase was offset by an increase of £0.4m in working capital (FY23:
decrease of £1.0m), predominantly due to the receivables for new store
openings in the final quarter of the year.
Free cash flow generated was £6.1m (FY23: £6.1m), this was offset by £1.3m
of capital expenditure (FY23: £2.0m) and returns to shareholders through
dividends of £3.4m (FY23: £3.1m).
The Group had £8.5m of cash and cash equivalents at year end, a £1.1m
increase year on year (FY23: £7.4m). The Group's net cash position was £7.3m
(FY23: £6.1m), a £1.2m increase on the prior year. Net cash position is
calculated by taking the cash and cash equivalents less the outstanding
mortgage debt relating to the Group's freehold properties.
Capital employed and balance sheet
FY 24 As restated
FY 23
£m £m
Intangible assets 0.73 0.40
Property, plant and equipment 11.48 11.27
Right-of-use-assets 2.27 2.57
Other financial assets 1.05 0.75
Lease liabilities (2.43) (2.70)
Provisions - (0.24)
Working capital 1.85 1.71
Net cash 7.31 6.12
Tax (2.96) (2.14)
Net assets 19.30 17.74
Intangible assets have increased by £0.3m year on year, due to the
capitalisation of costs relating to the new ERP system and website
development. Property, plant and equipment has increased by £0.2m, due to
additions of £0.9m and a further £0.2m increase in the valuations of the
Group's three freehold properties, offset by £0.9m of depreciation charged
for the year. Right-of-use assets has decreased by £0.3m, the amortisation
charge for the year.
Loans to franchisees increased by £0.3m during the year, predominantly due to
short term bridging loans to franchisees for new store openings pending their
bank finance is being approved and funds released by their banks.
Provisions related to the website data breach in FY21, with the amount
outstanding at the end of the 2023 financial year provided for potential fines
to be imposed by the Information Commissioner's Office ("ICO"). During the
2024 financial year, based on the information submitted to the ICO regarding
the enhancements made to the Group's security measures to prevent similar
breaches, the ICO informed the Group that it would not be pursuing enforcement
action and considered the case closed. This provision has therefore been
released in the 2024 financial year.
Working capital increased by £0.1m, due to an increase of £1.5m in accounts
receivable as a result of new store openings in the fourth quarter of the
year, offset by an increase of £1.1m in accounts payable and a £0.2m
decrease in inventories.
Events after the year end
Post year end the opportunity arose to purchase the land and buildings
neighbouring the Company's current depot in Bradford. As these opportunities
are rare to acquire the land adjacent to the Company's current facilities, the
Board took the decision to move ahead and purchase the land and buildings.
This will enable the Group to service its further expansion in the north of
England and Scotland. The purchase price of the land and buildings was £0.7m.
The purchase of the land was concluded during May 2024, out of current cash
reserves.
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
FOR THE YEAR ENDED 31 MARCH 2024
Company Registration No. 08777765
Note 2024 As restated 2023
£ £
Revenue 3 37,844,963 34,800,941
Cost of sales (17,905,058) (17,626,671)
Gross profit 19,939,905 17,174,270
Administrative expenses before exceptional items 4 (13,947,694) (11,314,803)
Impairment of receivables - writeback/(charge) 4 187,856 (280,425)
Exceptional items 10 243,100 -
Administrative expenses 4 (13,516,738) (11,595,228)
Operating profit 6,423,167 5,579,042
Finance income 6 153,145 25,019
Finance expense 6 (310,885) (160,494)
Profit before income tax 6,265,427 5,443,567
Income tax expense 11 (1,606,742) (1,206,896)
Profit after income tax 4,658,685 4,236,671
Other comprehensive income for the year
Items that will not be subsequently reclassified to profit or loss:
Revaluation of freehold property 13 223,178 187,665
Deferred tax on revaluation of freehold property 12 (55,795) (35,656)
Tax rate changes on revaluation reserve for freehold property 12 - (337,088)
Total other comprehensive income for the year 167,383 (185,079)
Total comprehensive income for the year 4,826,068 4,051,592
Attributable to:
Equity holders of the parent 4,826,068 4,051,592
Earnings per share
Basic (pence) 33
11.65 10.59
Diluted (pence) 33
11.44 10.59
The notes form an integral part of these financial statements.
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
AS AT 31 MARCH 2024
Note 2024 As restated 2023
£ £
Assets
Non-current assets
Intangible assets 14 727,783 399,186
Property, plant and equipment 13 11,480,193 11,267,783
Right-of-use assets 15 2,274,550 2,574,490
Other financial assets 18 564,535 508,532
15,047,061 14,749,991
Current assets
Inventories 16 2,592,838 2,790,724
Trade and other receivables 17 4,154,184 2,683,621
Other financial assets 18 487,652 245,880
Cash and cash equivalents 31 8,454,265 7,353,583
15,688,939 13,073,808
Total Assets 30,736,000 27,823,799
Equity and liabilities
Equity
Issued share capital 19 400,000 400,000
Capital redemption reserve 20 40
40
Share option reserve 20 95,266 -
Revaluation reserve 20 3,617,038 3,449,655
Retained earnings 20 15,188,345 13,889,660
Equity attributable to the owners of the parent company 19,300,689 17,739,355
Current liabilities
Trade and other payables 23 4,892,228 3,766,413
Lease liabilities 15 280,425 270,117
Short-term borrowings 22 146,544 104,498
Current tax payable 948,523 294,262
Provisions 24 243,100
-
6,267,720 4,678,390
Non-current liabilities
Lease liabilities 15 2,149,413 2,429,838
Borrowings 22 997,050 1,132,292
Deferred tax liabilities 12 2,021,128 1,843,924
5,167,591 5,406,054
Total Equity and liabilities 30,736,000 27,823,799
The notes form an integral part of these financial statements.
CONSOLIDATED STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED 31 MARCH 2024
Note 2024 2023
£ £
Cash flows from operating activities
Profit before income tax 6,265,427 5,443,567
Adjusted for:
Depreciation of property, plant, and equipment 4 & 13 856,282 777,571
Amortisation of intangible assets 4 & 14 106,810 54,110
Depreciation of right-of-use assets 4 & 15 299,940 299,940
Loss/(profit) on disposal of property, plant, and equipment 13,606 (50,733)
Share-based payment expense 7 93,445
-
Finance income 6 (153,145) (25,019)
Finance cost 6 310,885 160,494
Decrease/(increase) in inventories 197,886 (321,803)
(Increase) in trade and other receivables (1,470,563) (360,950)
(Increase)/decrease in other financial assets (297,775) 263,307
Increase/(decrease) in trade and other payables 1,125,815 1,105,042
(Decrease)/increase in provisions (243,100) 280,425
Cash generated from operations 7,105,513 7,625,951
Taxation paid (829,251) (1,341,087)
Net cash inflow from operating activities 6,276,262 6,284,864
Cash flows from investing activities
Purchase of property, plant and equipment 13 (892,226) (1,615,209)
Additions in intangible assets 14 (453,920) (346,023)
Proceeds from sale of property, plant and equipment 51,620 61,002
Finance income 6 153,145 25,019
Net cash outflow from investing activities (1,141,381) (1,875,211)
Cash flows from financing activities
Repayment of finance leases (270,118) (260,192)
Repayment of borrowings (93,196) (116,942)
Dividends paid 8 (3,360,000) (3,090,000)
Finance cost 6 (310,885) (160,494)
Net cash outflow from financing activities (4,034,199) (3,627,628)
Net increase in cash and cash equivalents 1,100,682 782,025
Cash and cash equivalents at 1 April 2023 7,353,583 6,571,558
Cash and cash equivalents at 31 March 2024 31 8,454,265 7,353,583
The notes form an integral part of these financial statements.
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
THE YEAR ENDED 31 MARCH 2024
Attributable to the owners of the Parent Company
Share capital Capital redemption reserve Share option reserve As restated revaluation reserve As restated retained earnings As restated total
£ £ £ £ £ £
At 31 March 2022 400,000 40 - 3,634,734 12,742,989 16,777,763
Profit for the year - - - - 4,236,671 4,236,671
Revaluation of freehold property - - - 187,665 - 187,665
Deferred tax on revaluation of freehold property - - - (35,656) - (35,656)
Tax rate changes on revaluation reserve for freehold property - - - (337,088) - (337,088)
Total comprehensive income for the year - - - (185,079) 4,236,671 4,051,592
Transactions with the owners in their capacity as owners
Dividends paid - - - - (3,090,000) (3,090,000)
At 31 March 2023 400,000 40 - 3,449,655 13,889,660 17,739,355
Profit for the year - - - - 4,658,685 4,658,685
Revaluation of freehold property - - - 223,178 - 223,178
Deferred tax on revaluation of freehold property - - - (55,795) - (55,795)
Total comprehensive income for the year - - - 167,383 4,658,685 4,826,068
Transactions with the owners in their capacity as owners
Share-based payments - - 93,445 - - 93,445
Deferred tax on share-based payments - - 1,821 - - 1,821
Dividends paid - - - - (3,360,000) (3,360,000)
At 31 March 2024 400,000 40 95,266 3,617,038 15,188,345 19,300,689
The notes form an integral part of these financial statements.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2024
1. General information
Cake Box Holdings plc is a listed company limited by shares, incorporated in
England and Wales, with company number 08777765 and domiciled in the United
Kingdom. Its registered office is 20 - 22 Jute Lane, Enfield, Middlesex, EN3
7PJ.
The financial statements cover Cake Box Holdings plc ('Company') and the
entities it controlled at the end of, or during, the financial year (referred
to as the 'Group').
The principal activity of the Group continues to be the specialist retailer of
fresh cream cakes and franchise operator.
2. Material accounting policy information
2.1 Basis of preparation of financial
statements
The financial information set out in this statement does not constitute
statutory accounts as defined in section 435 of the Companies Act 2006. This
set of financial results was approved by the Board on 10 June 2024. The
financial information for the years ended 31 March 2024 and 31 March 2023 have
been extracted from the statutory accounts for each year. The auditors' report
on the 2024 statutory accounts was (i) unqualified, (ii) did not include
references to any matters to which the auditor drew attention by way emphasis
without qualifying its reports and (iii) did not contain statements under
section S498(2) or S498(3) of the Companies Act 2006.
While the financial information included in this preliminary announcement
has been prepared in accordance with the recognition and measurement criteria
of International Financial Reporting Standards, this announcement does not
itself contain sufficient information to comply with those standards. The
Company expects to publish full financial statements that comply with
International Financial Reporting Standards in August 2023.
The consolidated financial statements for the year ended 31 March 2024 have
been prepared in accordance with United Kingdom adopted International
Financial Reporting Standards (UK Adopted IFRS) and those parts of the
Companies Act 2006 that are applicable to companies which apply UK adopted
IFRS.
The consolidated financial statements have been prepared under the historical
cost convention, other than certain classes of property, plant and equipment.
The numbers presented in the financial statements have been rounded to the
nearest pound (£) unless otherwise stated.
Changes to comparative period financial information
The following changes have been made to the comparative period presented
within these financial statements:
· Impairment of receivables, of £280,425, have been disclosed
separately from administrative expenses on the Consolidated Statement of
Comprehensive Income. There is no impact on net cash flows or basic and
diluted earnings per share for the period.
· Tax rate changes on revaluation of property, plant and equipment have
been recognised separately under 'Other comprehensive income for the year', as
required by IAS 12 'Income Taxes'. This has resulted in a restatement of the
Consolidated Statement of Comprehensive Income. The Consolidated Statement of
Changes in Equity was also restated to reclassify £337,088 from retained
earnings to the revaluation reserve. There is no impact on net cash flows or
basic and diluted earnings per share for the period.
The above changes were prompted by an inquiry from the Corporate Reporting
Review Team of the FRC as part of its regular review and assessment of the
quality of corporate reporting in the UK. They requested further information
in relation to the Company's 2023 Annual Report and Accounts. The Company
agreed to make the above changes within its 2024 financial statements.
The FRC's review is limited to the published 2023 Annual Report and Accounts;
it does not benefit from a detailed understanding of underlying transactions
and provides no assurance that the Annual Report and Accounts are correct in
all material respects.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2024
As restated 2023 Adjustment Reported 2023
1)Impairment of receivables disclosed in the Consolidated Statement of
Comprehensive Income
Consolidated Statement of Comprehensive Income
Administrative expenses before exceptional items (11,314,803) 280,425 (11,595,228)
2) Tax rate changes on revaluation reserve for freehold property - recognised
separately under 'Other comprehensive income for the year'
Consolidated Statement of Comprehensive Income
Other comprehensive income for the year
Items that will not be subsequently reclassified to profit or loss:
Revaluation of freehold property 187,665 - 187,665
Deferred tax on revaluation of freehold property (35,656) - (35,656)
Tax rate changes on revaluation reserve for freehold property (337,088) (337,088) -
Total other comprehensive income for the year (185,079) (337,088) 152,009
Consolidated Statement of Financial Position
Revaluation reserve
As reported in 2023 3,634,734 - 3,634,734
Revaluation of freehold property 187,665 - 187,665
Deferred tax on revaluation of freehold property (35,656) - (35,656)
Reclassification of tax rate changes on revaluation reserve for freehold (337,088) (337,088) -
property
3,449,655 (337,088) 3,786,743
Judgements
The preparation of financial statements under IFRS requires management to make
judgements, estimates and assumptions that affect the application of
accounting policies and reported amounts of assets, liabilities, income and
expenses. The estimates and associated assumptions are based on historical
experience and factors that are believed to be reasonable under the
circumstances, the results of which form the basis of making judgements about
carrying values of assets and liabilities that are not readily apparent from
other sources. Actual results may differ from these estimates. Estimates and
assumptions are reviewed on an ongoing basis and any revision to estimates or
assumptions are recognised in the period in which they are revised and in
future periods affected.
Expected Credit Loss Allowance
The Group exercises judgement in relation to the calculation of expected
credit losses on trade receivables and franchisee loans. This includes
ascertaining what constitutes a significant increase in credit risk, what is
defined as loan default and how forward-looking information has been
incorporated into the simplified approach for trade receivables. Please see
note 28 for further details.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2024
Accounting policies (continued)
Areas of significant estimation uncertainty
The following areas of estimation uncertainty which have had the most
significant effect on amounts recognised in the financial statements:
Provisions
The Group had previously recognised provisions following a data breach which
impacted the Group's website payment system. The provision related to the fine
received by the merchant service provider, and estimated costs associated
including potential fines from the ICO in respect of GDPR breaches and
associated legal and professional fees. Management used judgement in respect
of potential fees and fines and estimates to calculate the quantum of costs.
Freehold property
Freehold properties are held at valuation. When measuring the fair value of an
asset or liability, the Group uses observable market data as far as possible.
Fair values are categorised into different levels in a fair value hierarchy
based on the inputs used in the valuation techniques as follows:
· Level 1: quoted prices (unadjusted) in active markets for identical
assets or liabilities.
· Level 2: inputs other than quoted prices included in Level 1 that are
observable for the asset or liability, either directly (i.e.as prices) or
indirectly (i.e. derived from prices).
· Level 3: inputs for the asset or liability that are not based on
observable market data (unobservable inputs).
The fair value of investment property was determined by external, independent
property valuers, having appropriate recognised professional qualifications
and recent experience in the location and category of the property being
valued. The independent valuers provide the fair value of the Group's
investment property portfolio every 12 months.
2.2 Functional and presentation currency
The currency of the primary economic environment in which the Parent and its
subsidiaries operate (the functional currency) is Pound Sterling ("GBP or £")
which is also the presentation currency.
2.3 Basis of consolidation
Subsidiaries
Subsidiaries are entities controlled by the Group. The Group 'controls' an
entity when it is exposed to, or has rights to, variable returns from its
involvement with the entity and has the ability to affect those returns
through its power over the entity. The financial statements of subsidiaries
are included in the consolidated financial statements from the date on which
control commences until the date on which control ceases.
Changes in the Group's interest in a subsidiary that do not result in a loss
of control are accounted for as equity transactions.
Transactions eliminated on consolidation
Intra-group balances and transactions, and any unrealised income and expenses
arising from intra-group transactions, are eliminated.
A list of the significant investments in subsidiaries, including the name,
country of incorporation and proportion of ownership interest is given in note
30 to the Company's separate financial statements.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2024
2. Accounting policies (continued)
2.4 Application of New and Revised IFRS's
At the date of authorisation of these financial statements the following
Standards and Interpretations were in issue and have been applied in these
financial statements. There has not been a material impact on the Group
following their application:
Effective Date
IAS 1 The amendments aim to improve accounting policy disclosures and to help users 1 January 2023
of the financial statements to distinguish between changes in accounting
estimates and changes in accounting policies.
IAS 12 Amendments requiring a company to recognise deferred tax on transactions that, 1 January 2023
on initial recognition give rise to equal amounts of taxable and deductible
temporary differences.
IAS 1 & IAS 8 Amendments regarding the disclosure of accounting policies and amendments 1 January 2023
regarding the definition of accounting estimates.
IAS 12 Amendments to Deferred Tax Related to Assets and Liabilities arising from a 1 January 2023
Single Transaction.
At the date of authorisation of these financial statements the following
Standards and Interpretations which have not been applied in these financial
statements were in issue but not yet effective and are not expected to have a
material impact on the Group:
Effective Date
IAS 1 Amendments clarify how conditions with which an entity must comply within 1 January 2024
twelve months after the reporting period affect the classification of a
liability.
IFRS 16 Amendments include requirements for sale and leaseback transactions in IFRS 16 1 January 2024
to explain how an entity accounts for a sale and leaseback after the date of
the transaction.
IFRS 18 IFRS 18 is the future standard that replaces IAS 1 in its entirety and will Applicable for financial years beginning on or after 1 January 2027 and is not
thus deal with presentation of primary statements and notes. Some key impacts yet endorsed for use in the United Kingdom. The Company is considering the
are as follows: impact of IFRS 18 on its future reporting.
· Improving structure of the statement of profit or loss by requiring
information to be classified in either operating, investing, financing,
taxation, or discontinued categories.
· Improving the requirements over the level of aggregation and
disaggregation of line items and the information in notes in order to provide
more useful information.
· Providing specific requirements over the reporting of additional
sub-totals, line items, and other aspects of presentation that relate to
alternative performance measures (for example non-IFRS measures).
IFRS 19 IFRS 19 is a new standard that enables reduced disclosures in the IFRS IFRS 19 is applicable for financial years beginning on or after 1 January 2027
accounts of subsidiaries that do not have public accountability. IFRS 19 is and is not yet endorsed for use in the United Kingdom.
not relevant at this level of the Group as the Company is a parent and not a
subsidiary.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2024
2. Accounting policies (continued)
2.5 Segment reporting
Operating segments are reported in a manner consistent with the internal
reporting provided to the chief operating decision-maker ('CODM'). The CODM,
who is responsible for allocating resources and assessing performance of the
operating segments, has been identified as the executive directors that make
strategic decisions. Whilst the Group's trading has numerous components, the
CODM is of the opinion that there is only one operating segment. This is in
line with internal reporting provided to the executive directors.
2.6 Going concern
The directors pay careful attention to the cost base of the Group ensuring not
only that it is kept at a level to satisfy the commercial requirements but
also that it remains appropriate to the level of activity of the Group and the
financial resources available to it.
The current cash balance has increased by £1.0m to £8.5m, and the Group
continues to be cash generative.
Based on the current working capital forecast, there is no need to raise
additional funds as the Group considers that it is in a position where the
scenario of not meeting liabilities is remote. After making enquiries and
considering the assumptions upon which the forecasts have been based, the
directors have a reasonable expectation that the Group has adequate resources
to continue in operational existence for the period of at least twelve months
from the date of approval of these financial statements. For these reasons,
they continue to adopt the going concern basis of accounting in preparing the
annual financial statements.
2.7 Revenue recognition
The Group recognises revenue from the following major sources:
· Sale of sponges, fresh cream and other foods and goods to franchisees
· Online commission on the sales of cakes and related products to
customers
· Franchise packages
· National marketing levy
Sale of sponges and related ingredients to franchisees
For sales of goods to franchisees, revenue is recognised when control of the
goods has transferred, being at the point at which the goods are dispatched
and delivered, which occurs on the same day. Payment of the transaction price
is due within 7 days after statements are forwarded to franchisees. The Group
actively works with its franchisees to ensure credit terms are met and if
terms are required to be extended a suitable debt recovery plan is agreed.
Online commission on the sales of cakes and related products to customers
Online sales which include click and collect sales, where the franchisee has
the primary responsibility for the fulfilment of the order and the Group is
collecting the consideration paid by the customers on behalf of the franchisee
as agent, are not recognised as revenue of the Group. Only the net commission
amount is recognised. Revenue is recognised at the date of order and payment
is taken at this point.
Franchise packages
The franchise packages consist of revenues which relate to pre- and
post-opening costs mainly for store fit-out; and initial set up costs for
pre-opening support, and franchisee and staff training.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2024
2. Accounting policies (continued)
The pre- and post-opening costs are required to get the new franchisee trading
and are therefore recognised at a point in time which is at the end of the
month in which trading commences. Each package is tailored to a
specific franchisee's needs and elements can be added or removed as
appropriate which will affect the price. The performance obligation of the
Group is met, when the store is handed over to the franchisee and he/she
accepts it and commences trading. The franchisee is then obligated to settle
the invoices raised by the Group for the costs incurred by the Group in
getting the store in a position where it can start trading. Included in the
franchise packages, is a franchise fee, the amount of which will depend on
whether it is a new or existing franchisee opening the new store.
Holding deposits received from franchisees for new stores are not treated as
revenue when received. The deposits are held under 'Other Payables' in the
Group's financial statements. If the new store is completed and the franchisee
accepts it and commences trading, the deposit is allocated against the costs
associated with the new store and recognised as revenue at this point. If the
new store does not proceed, the deposit is refunded to the franchisee.
National marketing Levy
Franchisees contribute a percentage of their franchise sales to the National
Marketing Fund managed by the Group. The purpose of the fund is to build
franchise sales through increased awareness of the Cake Box brand and the
website. For the funds received, the Group provides national marketing
initiatives and services. These performance obligations are considered to
constitute a revenue stream, and the contributions received by the Group are
therefore recognised as revenue. Revenue recognition is measured on an input
basis as the costs of providing the services are incurred. The Group provides
the services on a break-even basis, such that the fund does not retain a
long-term surplus or deficit. As such, the level of revenue and costs
recognised in respect of fulfilling the national marketing obligations are
equal. Any timing difference between contributions received and costs incurred
are held as a contract asset or liability on the Consolidated Statement of
Financial Position.
2.8 Current and deferred taxation
Current tax liabilities
Current tax for the current and prior periods is, to the extent unpaid,
recognised as a liability. If the amount already paid in respect of the
current and prior periods exceeds the amount due for those periods, the excess
is recognised as an asset, limited to the extent that it is probable that
taxable profits will be available against which those deductible temporary
differences can be utilised.
A provision is recognised for those matters for which the tax determination is
uncertain, but it is considered probable that there will be a future outflow
of funds to a tax authority. The provisions are measured at the best estimate
of the amount expected to become payable.
No material uncertain tax positions exist as at 31 March 2024. This assessment
relies on estimates and assumptions and may involve a series of complex
judgements about future events. To the extent that the final tax outcome of
these matters is different from the amounts recorded, such differences will
impact income tax expense in the period in which such determination is made.
Current taxes are calculated using tax rates and laws that are enacted or
substantively enacted at the reporting date.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2024
2. Accounting policies (continued)
Deferred Tax
Deferred tax is recognised on differences between the carrying amounts of
assets and liabilities in the financial statements and their corresponding tax
bases (known as temporary differences). Deferred tax liabilities are
recognised for all temporary differences that are expected to increase taxable
profit in the future. Deferred tax assets are recognised for all temporary
differences that are expected to reduce taxable profit in the future, and any
unused tax losses or unused tax credits, limited to the extent that it is
probable that taxable profits will be available against which those deductible
temporary differences can be utilised.
The net carrying amount of deferred tax assets is reviewed at each reporting
date and is adjusted to reflect the current assessment of future taxable
profits. Deferred tax is calculated at the tax rates that are expected to
apply to the taxable profit (tax loss) of the periods in which the Company
expects the deferred tax asset to be realised or the deferred tax liability to
be settled.
Deferred taxes are calculated using tax rates and laws that are enacted or
substantively enacted at the reporting date that are expected to apply as or
when the temporary differences reverses.
Tax Expense
Income tax expense represents the sum of the tax currently payable and
deferred tax movement for the current period. The tax currently payable is
based on taxable profit for the year.
Income taxes are recognised in profit or loss unless they relate to items
recognised in other comprehensive income or equity, in which case the income
tax is recognised in other comprehensive income or equity respectively.
2.9 Property, Plant and Equipment - held at cost
Property, plant and equipment, other than investment and freehold properties,
are stated at historical cost less accumulated depreciation and any
accumulated impairment losses. Historical cost includes expenditure that is
directly attributable to bringing the asset to the location and condition
necessary for it to be capable of operating in the manner intended by
management.
Land is not depreciated. Depreciation on other assets is charged to allocate
the cost of assets less their residual value over their estimated useful
lives, using the straight‑line method.
Depreciation is provided on the following annual basis:
Freehold buildings - Over 40 to 50 years
Freehold property improvements - Over 4 to 30 years
Plant & machinery - 4 years
Motor vehicles - 4 years
Fixtures & fittings - Over 4 to 12 years
Assets under construction - Not depreciated
Assets under the course of construction are carried at cost less any
recognised impairment loss. Depreciation of these assets commences when the
assets become available for use.
The assets' residual values, useful lives and depreciation methods are
reviewed, and adjusted prospectively if appropriate, or if there is an
indication of a significant change since the last reporting date.
Gains and losses on disposals are determined by comparing the proceeds with
the carrying amount and are recognised in the profit or loss.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2024
2. Accounting policies (continued)
2.10 Property, plant and equipment - held at valuation
Individual freehold properties are carried at fair value at the date of the
revaluation less any subsequent accumulated depreciation and subsequent
impairment losses. Revaluations are undertaken with sufficient regularity to
ensure the carrying amount does not differ materially from that which would be
determined using fair value at each Consolidated Statement of Financial
Position date.
Fair values are determined by an independent valuer and updated by the
Directors from market-based evidence.
Revaluation gains are recognised in Other Comprehensive Income. Revaluation
losses are recognised in the profit and loss, unless the losses relate to
previously recognised gains, in which case it will be recognised in Other
Comprehensive Income. Any excess losses are recognised in the profit or loss.
2.11 Inventories
Inventories are stated at the lower of cost and net realisable value, being
the estimated selling price less costs to complete and sell. Cost is based on
the cost of purchase on a first in, first out basis.
2.12 Financial instruments
Recognition of Financial Instruments
Financial assets and financial liabilities are recognised when the Group
becomes party to the contractual provisions of the instrument.
Trade and other receivables
Trade and other receivables without a significant financing component are
initially measured at transaction price which approximates fair value at the
transaction date. All sales are made on the basis of normal credit terms, and
the receivables do not bear interest. Where credit is extended beyond normal
credit terms, receivables are measured at amortised cost using the effective
interest method. All trade receivables are subsequently measured at amortised
cost. At the end of each reporting period, the carrying amounts of trade and
other receivables are reviewed. Impairment allowance for current and
non-current trade receivables are recognised based on the simplified approach
within IFRS 9 using a provision matrix in the determination of the lifetime
expected credit losses. During this process the probability of the non-payment
of the trade receivables is assessed. This probability is then multiplied by
the amount of the expected loss arising from default to determine the lifetime
expected credit loss for the trade receivables. For trade receivables, which
are reported net, such allowances are recorded in a separate allowance account
with the loss being recognised in the statement of profit or loss. On
confirmation that the trade receivable will not be collectable, the gross
carrying value of the asset is written off against the associated provision.
Other financial assets
Included in other financial assets are loans to franchisees. These loans are
interest free, however include an arrangement fee, at the discretion of the
Group, which is spread over the term of the loan. These loans have been
discounted to fair value using a market rate. The impact of this discounting
has been recognised in finance costs. At the end of each reporting period, the
carrying amounts of other financial assets are reviewed on an individual
balance basis and appropriate impairments are made if losses are anticipated.
If a previously impaired balance is subsequently received, the impairment is
reversed through the profit and loss. See notes 27 and 28 for further details.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2024
2. Accounting policies (continued)
Trade and other payables
Trade and other payables are initially measured at fair value and subsequently
at amortised cost. Trade payables are obligations on the basis of normal
credit terms and do not bear interest. Trade payables denominated in a foreign
currency are translated into Sterling using the exchange rate at the reporting
date. Foreign exchange gains or losses are included in other income or other
expenses.
2.13 Financial instruments
Bank loans and overdrafts
All borrowings are initially recorded at fair value, net of transaction costs.
Borrowings are subsequently carried at amortised cost under the effective
interest method.
Borrowings are classified as current liabilities unless the Group has an
unconditional right to defer settlement of the liability for at least 12
months after the reporting date.
2.14 Finance costs and income
Finance costs are charged to the profit and loss over the term of the debt
using the effective interest method so that the amount charged is at a
constant rate on the carrying amount. Issue costs are initially recognised as
a reduction in the proceeds of the associated capital instrument.
Finance income is charged to the profit and loss on receipt or accrued if
there is a signed agreement in place.
2.15 Cash and cash equivalents
Cash and cash equivalents comprise cash on hand and deposits with maturities
of three months or less from inception, and other short-term highly liquid
investments that are readily convertible to a known amount of cash and are
subject to an insignificant risk of changes in value.
2.16 Dividends
Equity dividends are recognised when they become legally payable. Interim
equity dividends are recognised when paid. Final equity dividends are
recognised when approved by the shareholders at an Annual General Meeting.
2.17 Leases
The Group assesses whether a contract is, or contains, a lease, at inception
of the contract. The Group recognises a right-of-use asset and a corresponding
lease liability with respect to all lease arrangements in which it is the
lessee, except for short-term leases (defined as leases with a lease term of
12 months or less) and leases of low value assets (such as tablets and
personal computers, small items of office furniture and telephones). For these
leases, the Group recognises the lease payments as an operating expense on a
straight-line basis over the term of the lease unless another systematic basis
is more representative of the time pattern in which economic benefits from the
leased assets are consumed.
The lease liability is initially measured at the present value of the lease
payments that are not paid at the commencement date, discounted by using the
Group's incremental borrowing rate.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2024
2. Accounting policies (continued)
Lease payments included in the measurement of the lease liability comprise:
· Fixed lease payments (including in-substance fixed payments), less any
lease incentives receivable;
· Variable lease payments that depend on an index or rate, initially
measured using the index or rate at the commencement date;
· The amount expected to be payable by the lessee under residual value
guarantees;
· The exercise price of purchase options if the lessee is reasonably
certain to exercise the options;
· Payments of penalties for terminating the lease, if the lease term
reflects the exercise of an option to terminate the lease
The lease liability is presented as a separate line in the Consolidated
Statement of Financial Position.
The lease liability is subsequently measured by increasing the carrying amount
to reflect interest on the lease liability (at a constant rate) and by
reducing the carrying amount to reflect the lease payments made.
The Group remeasures the lease liability (and makes a corresponding adjustment
to the related right-of-use asset) whenever:
· The lease term has changed or there is a significant event or change
in circumstances resulting in a change in the assessment of exercise of a
purchase option, in which case the lease liability is remeasured by
discounting the revised lease payments using a revised discount rate;
· The lease payments change due to changes in an index or rate or a
change in expected payment under a guaranteed residual value, in which cases
the lease liability is remeasured by discounting the revised lease payments
using a revised discount rate (unless the lease payments change is due to a
change in a floating interest rate, in which case a revised discount rate is
used);
· A lease contract is modified, and the lease modification is not
accounted for as a separate lease, in which case the lease liability is
remeasured based on the lease term of the modified lease by discounting the
revised lease payments using a revised discount rate at the effective date of
the modification.
The Group did not make any such adjustments during the periods presented.
The right-of-use assets comprise the initial measurement of the corresponding
lease liability, lease payments made at or before the commencement day, less
any lease incentives received and any initial direct costs. They are
subsequently measured at cost less accumulated depreciation and impairment
losses.
Whenever the Group incurs an obligation for costs to dismantle and remove a
leased asset, restore the site on which it is located or restore the
underlying asset to the condition required by the terms and conditions of the
lease, a provision is recognised and measured under IAS 37. To the extent that
the costs relate to a right-of-use asset, the costs are included in the
related right-of-use asset, unless those costs are incurred to produce
inventories.
Right-of-use assets are depreciated over the shorter period of lease term and
useful life of the right-of-use asset. Right-of-use assets currently in use
are depreciated over 10 years, which is the term of the lease.
If a lease transfers ownership of the underlying asset or the cost of the
right-of-use asset reflects that the Group expects to exercise a purchase
option, the related right-of-use asset is depreciated over the useful life of
the underlying asset. The depreciation starts at the commencement date of the
lease.
The right-of-use assets are presented as a separate line in the consolidated
statement of financial position. The Group applies IAS 36 to determine whether
a right-of-use asset is impaired and accounts for any identified impairment
loss as described in the 'Property, Plant and Equipment' policy.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2024
2. Accounting policies (continued)
2.18 Employee benefits
Short Term Employee Benefits
The cost of short-term employee benefits, (those payable within 12 months
after the service is rendered, such as leave pay and sick leave, bonuses, and
non-monetary benefits such as medical care), are recognised in the period in
which the service is rendered and are not discounted.
Defined contribution pension plan
The Group operates a defined contribution plan for its staff. A defined
contribution plan is a pension plan under which the Group pays fixed
contributions into a separate entity. Once the contributions have been paid
the Group has no further payment obligations.
The contributions are recognised as an expense in the profit or loss when they
fall due. Amounts not paid are shown in accruals as a liability in the
Consolidated Statement of Financial Position. The assets of the plan are held
separately from the Group in independently administered funds.
Termination benefits
The entity recognises the expense and corresponding liability for termination
benefits when it is demonstrably committed to either of the following
scenarios:
a. The termination of the employment of an employee or group of
staff before the normal retirement age, or
b. The provision of termination benefits in relation to an offer
made to encourage voluntary redundancy.
The value of such benefit is measured at the best estimate of the expenditure
required to settle the obligation at the reporting date.
2.19 Provisions and contingencies
Provisions are recognised when the Group has an obligation at the reporting
date as a result of a past event; it is probable that the Group will be
required to transfer economic benefits in settlement; and the amount of the
obligation can be estimated reliably.
Provisions are measured at the present value of the amount expected to be
required to settle the obligation using a pre-tax rate that reflects current
market assessments of the time value of money and the risks to a specific
obligation. The increase in the provision due to the passage of time is
recognised as interest expense.
Provisions are not recognised for future operating losses.
Contingent liabilities are not recognised in the consolidated financial
statements. They are disclosed if the possibility of an outflow of resources
embodying economic benefit is remote. A contingent asset is not recognised
in the consolidated financial statements but disclosed when an inflow of
economic benefit is probable.
2.20 Share capital
Ordinary shares are classified as equity. Equity instruments are measured at
the fair value of the cash or other resources received or receivable, net of
the direct costs of issuing the equity instruments. If payment is deferred and
the time value of money is material, the initial measurement is on a present
value basis.
2.21 Research and development
Research and development expenditure is charged to the Consolidated Statement
of Comprehensive Income in the year in which it is incurred. The expenditure
does not meet the definition of 'Development' under IAS 38.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2024
2. Accounting policies (continued)
2.22 Fair value measurement
When an asset or liability, financial or non-financial, is measured at fair
value for recognition or disclosure purposes, the fair value is based on the
price that would be received to sell an asset or paid to transfer a liability
in an orderly transaction between market participants at the measurement date;
and assumes that the transaction will take place either: in the principal
market; or in the absence of a principal market, in the most advantageous
market.
Fair value is measured using the assumptions that market participants would
use when pricing the asset or liability, assuming they act in their economic
best interests. For non-financial assets, the fair value measurement is based
on its highest and best use. Valuation techniques that are appropriate in the
circumstances and for which sufficient data are available to measure fair
value, are used, maximising the use of relevant observable inputs and
minimising the use of unobservable inputs.
Assets and liabilities measured at fair value are classified into three
levels, using a fair value hierarchy that reflects the significance of the
inputs used in making the measurements. Classifications are reviewed at each
reporting date and transfers between levels are determined based on a
reassessment of the lowest level of input that is significant to the fair
value measurement.
For recurring and non-recurring fair value measurements, external valuers may
be used when internal expertise is either not available or when the valuation
is deemed to be significant. External valuers are selected based on market
knowledge and reputation. Where there is a significant change in fair value of
an asset or liability from one period to another, an analysis is undertaken,
which includes a verification of the major inputs applied in the latest
valuation and a comparison, where applicable, with external sources of data.
2.23 Share-based payments
Where share options are awarded to staff, the fair value of the options
(measured using the Black-Scholes model) at the date of grant is charged to
the profit and loss over the vesting period. Non-market vesting conditions are
considered by adjusting the number of equity instruments expected to vest at
each reporting date so that, ultimately, the cumulative amount recognised over
the vesting period is based on the number of options that eventually vest.
Market vesting conditions are factored into the fair value of the options
granted. The cumulative expense is not adjusted for failure to achieve a
market vesting condition.
The fair value of the award also considers non-vesting conditions. These are
either factors beyond the control of either party or factors which are within
the control of one or another of the parties. Where the terms and conditions
of options are modified before they vest, the increase in the fair value of
the options, measured immediately before and after the modification, is also
charged to profit or loss over the remaining vesting period.
Lapsed share options are derecognised as soon as it is known that vesting
conditions will not be met. Previous charges to the Statement of Comprehensive
Income are credited back to this statement.
2.24 Exceptional items
Exceptional items are transactions that fall within the ordinary activities of
the Group but are presented separately due to their size or incidence.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2024
2. Accounting policies (continued)
2.25 Impairment of non-financial assets
Non-financial assets
At each reporting date, the Group reviews the carrying amounts of its
non-financial assets to determine whether there is any indication of
impairment. If any such indication exists, then the asset's recoverable
amount is estimated.
For impairment testing, assets are grouped together into the smallest group of
assets that generates cash inflows from continuing use that are largely
independent of the cash inflows or other assets of CGUs.
The recoverable amount of an asset or CGU is the greater of its value in use
and its fair value less costs of disposal. Value in use is based on the
estimated future cash flows, discounted to their present value using a pre-tax
discount rate that reflects current market assessments of the time value of
money and the risks specific to the asset or CGU. An impairment loss is
recognised if the carrying amount of an asset or CGU exceeds its recoverable
amount. Impairment losses are recognised in profit or loss. They are
allocated first to reduce the carrying amount of any goodwill allocated to the
CGU, and then to reduce the carrying amounts of the other asset in the CGU on
a pro rate basis. An impairment loss is reversed only to the extent that the
asset's carrying amount does not exceed the carrying amount that would have
been determined, net of depreciation or amortisation, if no impairment loss
had been recognised.
2.26 Intangible assets
Intangible Assets Policy
The purpose of this policy is to outline the guidelines and procedures for
managing and accounting for intangible assets, specifically focusing on
Website costs, Software, and ERP Systems. These assets are valuable resources
that contribute to the organisation's competitive advantage and need to be
properly identified, evaluated, recorded, and monitored.
2.26.1. Recognition and Initial Measurement:
a. Website Costs:
Expenditures related to developing or acquiring a website should be
capitalised when they meet the following criteria:
- It is probable that the future economic benefits associated with the website
will flow to the organisation.
- The costs of the website can be reliably measured.
- Website costs should be amortised over their estimated useful life or
expensed if they have a short useful life.
b. Software:
Software costs should be capitalised if they meet the following criteria:
- The software is intended for internal use.
- It is probable that the organisation will derive future economic benefits
from the software.
- The costs of the software can be reliably measured.
- Capitalised software costs should be amortised over their estimated useful
life or expensed if they have a short useful life.
c. ERP Systems:
The costs related to acquiring, implementing, and customising an Enterprise
Resource Planning (ERP) system should be capitalised if they meet the
following criteria:
- The ERP system is intended for internal use.
- It is probable that the organisation will derive future economic benefits
from the ERP system.
- The costs of the ERP system can be reliably measured.
- Capitalised ERP system costs should be amortised over their estimated useful
life or expensed if they have a short useful life.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2024
2. Accounting policies (continued)
2.26.2. Subsequent Expenditure:
Subsequent expenditures related to intangible assets, such as enhancements,
upgrades, or additions, should be evaluated to determine if they meet the
criteria for capitalisation.
If the subsequent expenditure enhances the future economic benefits or extends
the useful life of the asset, it should be capitalised and added to the
carrying amount of the asset.
Otherwise, the expenditure should be expensed as incurred.
2.26.3. Amortisation:
Intangible assets subject to amortisation should be amortised over their
estimated useful lives.
The amortisation method should be applied consistently and reflect the pattern
in which the asset's economic benefits are consumed or utilised.
The amortisation expense should be recorded in the organisation's financial
statements.
The estimated useful lives for current and comparative periods are as follows:
Website - 4 years
Software - 4 years
ERP - 4 years
2.26.4. Monitoring and Impairment Testing:
a. Regular Reviews:
Periodic reviews should be conducted to assess the ongoing value and useful
life of intangible assets.
Changes in market conditions, technology advancements, or other factors should
be considered during these reviews.
b. Impairment Testing:
If indicators of impairment exist, such as a significant decline in the
asset's market value or changes in the asset's usefulness, an impairment test
should be performed.
If an impairment is identified, the asset's carrying amount should be reduced
to its recoverable amount, and an impairment loss should be recognised in the
financial statements.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2024
3. Segment reporting
Components reported to the CODM are not separately identifiable and as such
consider there to be one reporting segment. The Group makes varied sales to
its customers, but none are a separately identifiable component. The following
information is disclosed:
2024 2023
£ £
Sales of sponge 14,983,166 13,631,930
Sales of other food 6,700,487 5,870,607
Sales of fresh cream 4,082,584 3,976,694
Sales of other goods 7,824,308 7,454,354
Online sales commission 1,100,711 1,001,192
Franchise packages 2,484,043 2,866,164
National Marketing levy 669,664 -
37,844,963 34,800,941
All revenue occurred in the United Kingdom for both financial years.
The operating segment information is the same information as provided
throughout the consolidated financial statements and is therefore not
duplicated.
The Group was not reliant upon any major customer during 2024 or 2023.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2024
4. Expenses by nature
The Administrative expenses have been arrived at after charging/(crediting):
2024 Restated 2023
£ £
Staff costs 7,609,081 6,140,162
Travel and entertaining costs 613,284 599,151
Supplies costs 801,291 481,596
Professional costs 1,236,911 1,729,948
Depreciation of property, plant, and equipment 856,282 777,571
Amortisation of intangible assets 106,810 54,110
Depreciation of right-of-use assets 299,940 299,940
Rates and utilities costs 657,601 595,697
Property maintenance costs 328,279 265,400
Advertising costs 1,377,584 308,564
Other costs 60,631 62,664
13,947,694 11,314,803
Impairment of receivables - writeback/(charge) (see note 27) (187,856) 280,425
Exceptional items (see note 10) (243,100) -
13,516,738 11,595,228
5. Operating profit
The operating profit is stated after charging/(crediting):
2024 Restated 2023
£ £
Depreciation of property, plant, and equipment 856,282 777,571
Amortisation of intangible assets 106,810 54,110
Depreciation of right-of-use assets 299,940 299,940
Inventory recognised as an expense 17,905,058 17,626,671
Loss/(Profit) on disposal of property, plant & equipment 13,605 (50,733)
Fees payable to the Group's auditor and its associates for the audit of the 105,000 85,000
Group's annual financial statements
Fees payable to the Group's auditor and its associates for the audit of the 17,600 50,000
Group's prior year annual financial statements
Fees payable to the Group's auditor and its associates for the review of the 13,000 13,000
Group's interim financial statements
Share-based payment expense 93,445 -
The prior year comparative has been restated as the amortisation of intangible
assets is now shown separately.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2024
6. Net finance costs
2024 2023
£ £
Finance expenses
Bank loan interest 82,050 55,686
Finance lease interest 94,881 104,808
Other interest paid 14,704 -
Finance cost of discounted franchisee loans* 119,250 -
310,885 160,494
Finance income
Bank interest receivable (153,145) (25,019)
Net finance costs 157,740 135,475
*There is no comparative for the prior year as this was immaterial.
7. Staff costs
Staff costs, including directors' remuneration, were as follows:
2024 2023
£ £
Wages and salaries 6,638,952 5,426,189
Social security costs 670,237 561,337
Pension costs 84,208 74,144
Private health 122,239 78,492
7,515,636 6,140,162
Share-based payment expense 93,445 -
7,609,081 6,140,162
The average monthly number of staff, including directors, for the year was 173
(FY23:173). The breakdown by department is as follows;
2024 2023
Directors 7 6
Administration 42 41
Maintenance 20 19
Production and Logistics 104 107
173 173
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2024
8. Dividends
2024 2023
£ £
Interim dividend of 2.9p per ordinary share 1,160,000 -
Final dividend of 5.5p per ordinary share proposed and paid during the year 2,200,000 -
relating to the previous year's results
Interim dividend of 2.625p per ordinary share - 1,050,000
Final dividend of 5.1p per ordinary share proposed and paid during the year - 2,040,000
relating to the previous year's results
3,360,000 3,090,000
9. Directors' remuneration and key management personnel
The Directors' remuneration is disclosed within the Directors' Remuneration
Report. The Executive Directors and Non-Executive directors are considered key
management personnel. Employers NIC paid on Directors' remuneration in the
year was £110,431 (FY23: £90,861).
10. Exceptional items
During FY21 the Group made a provision for estimated costs and fines with
regards to a website data breach. During the 2024 financial year, based on the
information submitted to the Information Commissioner's Office ("ICO")
regarding the Group's security measures in place to prevent similar breaches,
the ICO informed the Company that it would not be pursuing enforcement action
in this case and consider the case closed.
2024 2023
£ £
Reversal of provision relating to website data breach (credit) (243,100) -
11. Taxation
2024 2023
£ £
Corporation tax
Current tax on profits for the year 1,483,512 789,096
Adjustments in respect of previous periods - 8,305
Deferred tax
Arising from origination and reversal of temporary differences 62,065 262,433
Effect of changes in tax rates - 142,951
Adjustments in respect of previous periods 61,165 4,111
Taxation on profit on ordinary activities 1,606,742 1,206,896
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2024
11. Taxation (continued)
Factors affecting tax charge for the year
The tax assessed for the year is 25.6% (FY23: 22.2%), which is higher than the
standard rate of corporation tax in the UK of 25% (FY23: 19%). The differences
are explained below:
2024 2023
£ £
Profit on ordinary activities before tax 6,265,427 5,443,567
Profit on ordinary activities multiplied by standard rate of corporation tax 1,566,357 1,034,279
in the UK of 25% (FY23: 19%)
Effects of:
Expenses not deductible for tax purposes, other than goodwill amortisation and 35,882 96,260
impairment
Income not taxable (56,662) (79,010)
Effect of changes in tax rates - 142,951
Adjustments to tax in respect of prior periods 61,165 12,416
Total tax charge for the year 1,606,742 1,206,896
At the 2021 Budget speech on 3 March 2021, the Government announced that the
Corporation Tax rate will increase to 25% for companies with profits above
£250,000 with effect from 1 April 2023, as well as announcing a number of
other changes to allowances and treatment of losses. This has impacted the
Company's current tax charge accordingly.
At the 2021 Budget speech on 3 March 2021, the Government announced that the
Corporation Tax rate will increase to 25% for companies with profits above
£250,000 with effect from 1 April 2023, as well as announcing a number of
other changes to allowances and treatment of losses. This has impacted the
Company's current tax charge accordingly.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2024
12. Deferred taxation
2024 2023
£ £
Balance brought forward 1,843,924 1,061,684
Charged to other comprehensive income:
Deferred tax on revalued freehold property 55,795 35,656
Tax rate changes on revaluation reserve for freehold property - 337,088
Charged directly to reserves:
Employee benefits (including share-based payments) (1,821) -
Charged to profit and loss:
Accelerated capital allowances 82,681 266,659
Tax rate changes - 142,951
Share-based payments (23,361) -
Adjustments in respect of prior periods 64,734 4,111
Other short-term timing differences (824) (4,225)
Balance carried forward 2,021,128 1,843,924
2024 2023
£ £
Deferred tax liabilities
Accelerated capital allowances 717,772 573,926
Other short-term timing differences (5,052) (7,797)
Share-based payments (25,182)
-
Property valuations (including indexation) 1,333,590 1,277,795
2,021,128 1,843,924
Movements in deferred tax in direct relation to freehold property revaluation
are recognised immediately in the Consolidated Statement of Comprehensive
Income, under other comprehensive income for the year.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2024
13. Property, plant, and equipment
Freehold Land and Building Freehold improvements Plant & machinery Motor vehicles Fixtures & fittings Total
£ £ £ £ £ £
Cost or valuation
At 1 April 2022 9,026,434 76,570 893,236 1,032,476 2,027,962 13,056,678
Additions - 711,560 50,150 481,942 371,557 1,615,209
Disposals - - - (112,002) - (112,002)
Revaluations 187,665 - - - - 187,665
At 31 March 2023 9,214,099 788,130 943,386 1,402,416 2,399,519 14,747,550
Depreciation
At 1 April 2022 421,434 2,162 800,025 515,020 1,065,289 2,803,930
Charge for the year 77,665 118,970 41,911 286,595 252,430 777,571
Disposals - - - (101,734) - (101,734)
At 31 March 2023 499,099 121,132 841,936 699,881 1,317,719 3,479,767
Net book value
At 31 March 2023 8,715,000 666,998 101,450 702,535 1,081,800 11,267,783
Freehold Land and Building Freehold improvements Plant & machinery Motor vehicles Fixtures & fittings Total
£ £ £ £ £ £
Cost or valuation
At 1 April 2023 9,214,099 788,130 943,386 1,402,416 2,399,519 14,747,550
Additions - 193,672 91,101 251,422 356,031 892,226
Disposals - - (53,492) (105,585) - (159,077)
Revaluations (339,099) - - - - (339,099)
At 31 March 2024 8,875,000 981,802 980,995 1,548,253 2,755,550 15,141,600
Depreciation
At 1 April 2023 499,099 121,132 841,936 699,881 1,317,719 3,479,767
Charge for the year 63,178 168,109 56,801 305,705 262,489 856,282
Revaluations (562,277) - - - - (562,277)
Disposals - - (25,896) (86,469) - (112,365)
At 31 March 2024 - 289,241 872,841 919,117 1,580,208 3,661,407
Net book value
At 31 March 2024 8,875,000 692,561 108,154 629,136 1,175,342 11,480,193
This year the Directors have disclosed the Freehold Land and Building column
in the above note on a net basis as this gives a clearer understanding of the
revaluation effect on the asset class in the year and for the future periods.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2024
13 Property, plant, and equipment (continued)
As at 31 March 2024, all freehold property was valued by independent 3rd party
qualified valuers, in accordance with the RICS Valuation - Global Standards
2017 (the Red Book). During their valuation, the valuers have considered the
various geographical areas the properties are located in and the market values
of similar properties in the same areas. The directors believe these
valuations to be representative of the fair value as at 31 March 2024.
The fair value of freehold property is categorised as a level 3 recurring fair
value measurement.
The following table summarises the quantitative information about the
significant unobservable inputs used in recurring level 3 fair value
measurements:
Fair value at 31 March 2024 Valuation technique Sq ft Rate per sq ft - average
£
Property
Enfield 7,050,000 Vacant possession 39,121 180
Coventry 1,200,000 Vacant possession 13,000
92
Bradford 625,000 Vacant possession 9,358
67
Total 8,875,000
If the Freehold properties had been accounted for under the historic cost
accounting rules, the properties would have been measured as follows:
2024 2023
£ £
Historic cost 3,433,746 3,433,746
14 Intangible assets
Website Software ERP system Total
£ £ £ £
Cost
At 1 April 2022 170,670 60,270 57,265 288,205
Additions 263,432 18,358 64,233 346,023
At 31 March 2023 434,102 78,628 121,498 634,228
Amortisation
At 1 April 2022 108,125 47,754 25,053 180,932
Charge for the year 28,447 11,347 14,316 54,110
At 31 March 2023 136,572 59,101 39,369 235,042
Balance at 31 March 2023 297,530 19,527 82,129 399,186
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2024
14 Intangible assets (continued)
Website Software ERP system Total
£ £ £ £
Cost
At 1 April 2023 434,102 78,628 121,498 634,228
Additions 133,881 111,000 209,039 453,920
Disposals (22,215) - - (22,215)
At 31 March 2024 545,768 189,628 330,537 1,065,933
Amortisation
At 1 April 2023 136,572 59,101 39,369 235,042
Charge for the year 83,293 9,201 14,316 106,810
Disposals (3,702) - - (3,702)
At 31 March 2024 216,163 68,302 53,685 338,150
Balance at 31 March 2024 329,605 121,326 276,852 727,783
15 Leases
The Consolidated Statement of Financial Position shows the following amounts
in relation to leases:
Property
£
Cost
At 1 April 2023 2,999,405
Additions -
At 31 March 2024 2,999,405
Depreciation
At 1 April 2023 424,915
Charge for the year 299,940
At 31 March 2024 724,855
Net book value
At 31 March 2023 2,574,490
At 31 March 2024 2,274,550
2024 2023
£ £
Lease liabilities
Current 280,425 270,117
Non-Current 2,149,413 2,429,838
2,429,838 2,699,955
The Group's obligations are secured by the lessor's title to the leased assets
for such leases.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2024
15 Leases (continued)
Amounts recognised in the Consolidated Statement of Comprehensive Income are
as follows:
2024 2023
£ £
Amortisation expense of right-of-use assets 299,940 299,940
Interest expense on lease liabilities 94,881 104,808
The total cash outflow for leases amount to £365,000 (FY23: £365,000).
16 Inventories
2024 Restated 2023
£ £
Raw materials 361,842 295,891
Goods held for resale 2,230,996 2,494,833
2,592,838 2,790,724
Inventories are charged to cost of sales in the Consolidated Statement of
Comprehensive Income. Inventories have been disclosed between raw materials
for production purposes and goods held for resale. Prior year disclosure has
been restated to reflect the above change in disclosure.
17 Trade and other receivables
2024 Restated 2023
£ £
Trade receivables 3,532,253 1,974,313
Impairment allowance (92,569) (230,537)
Trade receivables net of impairment allowance 3,439,684 1,743,776
Other receivables 266,508 370,222
Prepayments 447,992 569,623
4,154,184 2,683,621
The prior year disclosure has been restated to show the gross trade
receivables and impairment allowance as at the end of the financial year. The
balances have not changed, only the manner in which it is disclosed.
The fair value of those trade and other receivables classified as financial
assets at amortised cost are disclosed in the financial instruments note (note
27).
The Group's exposure to credit and market risks, including impairments and
allowances for credit losses, relating to trade and other receivables is
disclosed in the financial risk management and impairment of financial assets
note (note 28).
Trade receivables are non-interest bearing, are generally on 14-day terms and
are shown net of impairment allowance. Management's assessment is that a
loss allowance of £92,569 (FY23: £230,537) is required against some
receivables from franchisees.
The age profile of the trade receivables is shown in note 27.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2024
18 Other financial assets
2024 2023
£ £
Current 487,652 245,880
Non-current 564,535 508,532
1,052,187 754,412
2024 2023
£ £
Total loans to franchisees 1,052,187 804,300
Impairment allowance - (49,888)
1,052,187 754,412
Other financial assets consist of loans to franchisees. Loans are interest
free and payable in equal monthly instalments. All non-current assets are due
within five years of the statement of financial position date. The carrying
amount of the loans are valued at fair value at market rates. See note 27
(Financial Instruments) and 28 (Financial Risk Management) for further
information regarding the impairment of Other Financial Assets.
19 Share capital
2024 2023
£ £
40,000,000 Ordinary shares of £0.01 each 400,000 400,000
All of the ordinary shares of £0.01 each carry voting rights, the right to
participate in dividends, and entitle the shareholders to a pro-rata share of
assets on a winding up.
20 Reserves
The following describes the nature and purpose of each reserve within equity:
Capital redemption reserve
Amounts transferred from share capital on redemption of issued shares.
Revaluation reserve
Gain/(losses) arising on the revaluation of the Group's properties (other than
investment property).
Retained earnings
All other net gains and losses and transactions with owners (e.g., dividends,
fair value movements of investment property) not recognised elsewhere.
Share option reserve
The share option reserve represents the movement in cost of equity-settled
transactions in relation to the long-term incentive plans. See note 21 for
more information.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2024
21 Share-based payments
The expense recognised for share-based payments in respect of employee
services received during financial year ended 31 March 2024 was £93,445
(FY23: £NIL).
Long Term Incentive Plan ('LTIP')
All employees and full-time Executive Directors of the Group are eligible to
participate in the LTIP at the discretion of the Remuneration Committee. Share
awards may be granted subject to objective performance conditions and vest
over a vesting period determined by the Remuneration Committee at the time of
grant.
During 2024 the Remuneration Committee approved the grant of the following
share options under the LTIP scheme. All grants are in the form of equity
settled share options.
Enterprise Management Incentive Scheme ('EMI')
It was proposed and agreed by the Remuneration Committee to issue a total of
534,842 share options under the EMI scheme to 24 employees (including two
Executive Directors). These options are capable of vesting on the third
anniversary of the grant of the options, based on the following performance
criteria being met:
- 25% of the option vests if an aggregate Earnings Per Share ("EPS")
of 14.0p is achieved over the three financial yeas starting from the financial
year in which the date of the grant occurs in.
- An additional 0.1% of the option vests for every 0.0033p achieved
above an aggregate EPS of 14.0p, up to a maximum of 100% of the option held.
- In full if an aggregate EPS of 16.5p is achieved over the three
financial years starting from the financial year in which the date of grant
occurs in.
The options may not be exercised later than on the tenth anniversary of the
date of grant.
Unapproved Share Option Scheme
It was proposed and agreed by the Remuneration Committee to issue a total of
199,876 share options under the EMI scheme to two Executive Directors. These
options are capable of vesting on the third anniversary of the grant of the
options, based on the following performance criteria being met:
- 25% of the option vests if an aggregate Earnings Per Share ('EPS')
of 14.0p is achieved over the three financial years starting from the
financial year in which the date of the grant occurs in.
- An additional 0.1% of the option vests for every 0.0033p achieved
above an aggregate EPS of 14.0p, up to a maximum of 100% of the option held.
- In full if an aggregate EPS of 16.5p is achieved over the three
financial years starting from the financial year in which the date of grant
occurs in.
The options may not be exercised later than on the tenth anniversary of the
date of grant.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2024
21. Share-based payments(continued)
Exercise price Outstanding at 31 March 2023 Granted during the period Exercised during the period Forfeited during the period Outstanding at 31 March 2024 Weighted average remaining life Exercisable at 31 March 2024
Number Number Number Number Number Years Number
EMI Scheme 1p - 162p - 534,842 - - 534,842 9.75 -
Unapproved share option scheme 1p - 162p - 199,876 - - 199,876 9.64 -
Total - 734,718 - - 734,718
Weighted average exercise price 65p 65p -
The fair value of awards granted is estimated at the date of grant using the
Black-Scholes option-pricing model using the terms and conditions upon which
they were granted. The expected volatility reflects the assumption that the
historical volatility over a period similar to the life of the options is
indicative of future trends, which may not necessarily be the actual outcome.
The following table summaries the inputs used in the fair value models for
grants made in the period ended 31 March 2024, together with the fair values
calculated by those models:
EMI Scheme Unapproved share option scheme
Weighted average fair value - pence 119.2 148.3
Weighted average share price at grant - pence 156.1 149.0
Weighted average exercise price - pence 89.0 1.0
Number of periods to exercise - years 10.0 10.0
Dividend yield - % 4.8 4.8
Risk-free rates - % 4.0 4.1
Expected volatility - % 41.4 41.6
For options granted the volatility reflects the historical volatility based on
share transactions since listing. Daily closing share prices from since 27
June 2018 to the grant dates were reviewed and the standard deviation of the
percentage movements in share price calculated and utilised in determining the
expected volatility.
The risk-free rate is the interest rate on a debt instrument that has zero
risk, specifically default and reinvestment risk. The interest rate on
zero-coupon government securities, such as Treasury bills, notes, and bonds in
the UK, is treated as a proxy for the risk-free rate. The interest rate on a
10-year government bond on the date of grant has been used in the fair value
calculations of the options.
22. Borrowings
2024 2023
£ £
Current borrowings
Bank loans 146,544 104,498
Non-current borrowings
Bank loans 997,050 1,132,292
Total 1,143,594 1,236,790
Bank loans have fixed charges over the properties to which they relate and
interest of 2.15% - 2.23% above Bank of England base rate are charged on the
loans. The loans are repayable in monthly instalments with final payments due
between May 2029 and March 2030.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2024
23. Trade and other payables
2024 2023
£ £
Trade payables 2,953,202 2,648,770
Other taxation and social security 246,417 268,635
Other payables 399,605 316,375
3,599,224 3,233,780
Accruals 1,293,004 532,633
4,892,228 3,766,413
The fair value of the trade and other payables classified as financial
instruments are disclosed in the financial instruments (note 27).
The Group's exposure to market and liquidity risks related to trade and other
payables is disclosed in the financial risk management and impairment of
financial assets note (note 28). The Group pays its trade payables on terms
and as such trade payables are not yet due at the statement of financial
position dates.
24. Provisions
During FY21 the Group made a provision with regards to an estimation of costs
and potential fines relating to a website data breach. The amount outstanding
at 31 March 2023 related to potential fines to be imposed by the ICO in
respect of the data breach.
2024 2023
£ £
Website data breach
Balance brought forward 243,100 243,100
Released during the period (243,100) -
- 243,100
During the 2024 financial year, based on the information submitted to the ICO
regarding the Group's security measures in place to prevent similar breaches,
the ICO informed the Company that it would not be pursuing enforcement action
in this case and consider the case closed, and the Company therefore released
the balance of the provision (see note 10 Exceptional items).
25. Pension commitments
The Group operates a defined contribution pension scheme. The assets of the
scheme are held separately from those of the Group in an independently
administered fund. The pension cost charge represents contributions payable by
the Group to the fund and amounted to £84,208 (FY23: £74,144). Contributions
totalling £20,206 (FY23: £16,904) were payable to the fund at the statement
of financial position date and are included in other payables (note 23).
26. Related party transactions
Transactions between the Company and its subsidiaries, which are related
parties, have been eliminated on consolidation. Related party transactions are
considered to be at arms-length.
Key management personnel are only the Executive and Non-Executive directors
and details of the amounts paid to them are included within note 9 and the
Directors Remuneration Report.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2024
26. Related party transactions (continued)
Key management personnel had an interest in dividends as follows:
2024 2023
£ £
Sukh Chamdal 853,685 777,435
Dr Jaswir Singh 52,591 45,815
Neil Sachdev (resigned 31 October 2023) 2,815 2,589
Alison Green 504 464
Martin Blair 1,680 1,545
911,275 827,848
During the year the Group made sales to companies under the control of the
Directors. All sales were made on an arms-length basis. These are detailed as
follows with Director shareholding % shown in brackets:
2024 2023
Mr. Sukh Chamdal Sales Balance Sales Balance
£ £ £ £
Cake Box (Crawley) Limited (0%) * 142,210 37,671 170,370 11,163
Cake Box CT Limited (0%) * 280,758 20,985 287,837 18,198
Cake Box (Strood) Limited (0%) * 133,116 19,449 132,353 6,824
556,084 78,105 590,560 36,185
*100% owned by Mr Chamdal's daughter
2024 2023
Dr Jaswir Singh Sales Balance Sales Balance
£ £ £ £
Luton Cake Box Limited (10%) 445,802 18,618 410,560 18
Peterborough Cake Box Limited (30%) 230,447 9,827 229,149 (324)
Cream Cake Limited (30%) 285,131 13,574 246,223 -
MK Cakes Limited (0%)** 222,777 9,258 228,082 -
Bedford Cake Box Limited (0%)** 230,995 9,523 197,808 -
Chaz Cakes Limited (50%) - - 177,785 -
Ilford Cakes Limited (50%) 186,387 9,520 - -
Eggless Cake Company Limited (50%) 193,378 7,610 178,344 -
1,794,917 77,930 1,667,951 (306)
** 100% owned by Dr Singh's son or wife
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2024
27. Financial instruments
The Group is exposed to risks that arise from its use of financial
instruments. This note describes the Group's objectives, policies, and
processes for managing those risks and the methods used to measure them.
Further quantitative information in respect of these risks is presented
throughout these financial statements.
The material accounting policies regarding financial instruments are disclosed
in note 2.
There have been no substantive changes in the Group's exposure to financial
instrument risks, its objectives, policies and processes for managing those
risks or the methods used to measure them from previous years unless otherwise
stated in this note (note 28).
The principal financial instruments used by the Group, from which financial
instrument risk arises, are as follows:
Financial assets
Held at amortised cost
2024 2023
£ £
Cash and cash equivalents 8,454,265 7,353,583
Trade and other receivables 3,798,761 2,344,536
Impairment of trade receivables (92,569) (230,537)
Net trade and other receivables 3,706,192 2,113,999
Other financial assets 1,052,187 804,300
Impairment of Other financial assets - (49,888)
Net other financial assets 1,052,187 754,412
13,212,644 10,221,994
Financial liabilities
Held at amortised cost
2024 2023
£ £
Trade and other payables 3,599,224 3,233,780
Secured borrowings 1,143,594 1,236,790
4,742,818 4,470,570
28. Financial risk management
The Board has overall responsibility for the determination of the Group's risk
management objectives and policies and, while retaining ultimate
responsibility for them, it has delegated the authority for designing and
operating processes that ensure the effective implementation of the objectives
and policies to the Group's finance function. The Board receives regular
reports from the Chief Financial Officer through which it reviews the
effectiveness of processes put in place and the appropriateness of the
objectives and policies it sets.
The overall objective of the Board is to set policies that seek to reduce risk
as far as possible without unduly affecting the Group's competitiveness and
flexibility. Further details regarding these policies are set out below:
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2024
28 Financial risk management (continued)
Credit risk and impairment
Credit risk arises principally from the Group's trade and other receivables
and it's other financial assets (which includes loans to franchisees). It is
the risk that the counter party fails to discharge its obligation in respect
of the instrument. The maximum exposure to credit risk equals the carrying
value of these items in the financial statements as the Group has the power to
stop supplying the customer until payment is received in full.
Definition of default
The loss allowance on all financial assets is measured by considering the
probability of default.
Receivables are considered to be in default when the principal or any interest
is more than 90 days past due, based on an assessment of past payment
practices and the likelihood of such overdue amounts being recovered.
Determination of credit-impaired financial assets
The Group considers financial assets to be 'credit-impaired' when the
following events, or combinations of several events, have occurred before the
year-end:
• significant financial difficulty of the counterparty arising
from significant downturns in operating results and/or significant unavoidable
cash requirements when the counterparty has insufficient finance from internal
working capital resources, external funding and/or group support;
• a breach of contract, including receipts being more
than 240 days past due;
• it becoming probable that the counterparty will enter
bankruptcy or liquidation.
Write-off policy
Receivables and other financial assets are written off by the Company when
there is no reasonable expectation of recovery, such as when the counterparty
is known to be going bankrupt, or into liquidation or administration.
Receivables will also be written off when the amount is more than 300 days
past due and is not covered by security over the assets of the counterparty or
a guarantee.
Impairment of trade receivables and other financial assets
The Group calculates lifetime expected credit losses for trade receivables and
other financial assets using a portfolio approach. All items are grouped based
on the credit terms offered and the type of product sold. The probability of
default is determined at the year-end based on the aging of the receivables
and historical data about default rates on the same basis. That data is
adjusted if the Group determines that historical data is not reflective of
expected future conditions due to changes in the nature of its customers and
how they are affected by external factors such as economic and market
conditions.
The age profile of the trade receivables and expected credit loss is shown in
the table below:
2024 2023
Expected loss rate £ £
0 - 30 days 0.1% 2,370,195 1,509,715
30 - 60 days 0.2% 623,834 43,111
60 - 90 days 0.5% 132,591 32,822
More than 90 days 1.0% 405,633 388,665
3,532,253 1,974,313
Impairment provision (92,569) (230,537)
3,439,684 1,743,776
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2024
28 Financial risk management (continued)
The Group applies the IFRS 9 simplified approach to measure credit losses
using an expected credit loss provision for trade receivables.
The Group provides loans to franchisees as part of their financing for new
store openings. The loans are interest free with an upfront arrangement fee
included in the loan. The loans are unsecured however if loan repayment
schedules are not adhered to, supply of product and ingredients are put on
hold and franchisees are in breach of their franchise agreement. As a result,
the Group has the option to resell the franchise to another interested party
with the purchase price being used to first repay the loan and any outstanding
trade receivables, with any excess going to the original franchisee. The loan
periods are for periods of one or five years.
The Group uses three categories for loans which reflect their credit risk and
how the loan loss provision is determined for each of those categories. A
summary of the assumptions underpinning the Group's expected credit loss model
is as follows:
Category Group definition of category Basis for recognition of expected credit loss provision
Performing Loans whose credit risk is in line with original expectations. 12 month expected losses. Where the expected lifetime of an asset is less than
12 months, expected losses are measured at its expected lifetime (stage 1).
Underperforming Loans for which a significant increase in credit risk has occurred compared to Lifetime expected losses (stage 2).
original expectations; a significant increase in credit risk is presumed if
interest and/or principal repayments are 30 days past due(see above in more
detail).
Non-performing (credit impaired) Interest and/or principal repayments are 60 days past due or it becomes Lifetime expected losses (stage 3).
probable a customer will enter bankruptcy.
Write-off Interest and/or principal repayments are 120 days past due and there is no Asset is written off.
reasonable expectation of recovery.
Over the term of the loans, the group accounts for its credit risk by
appropriately providing for expected credit losses on a timely basis. In
calculating the expected credit loss rates, the Group considers historical
loss rates and adjusts for forward-looking macroeconomic data. The Group
provides for credit losses against loans to franchisees as follows:
Group internal credit rating as at 31 March 2023 Expected credit loss Gross carrying amount (stage 1) Gross carrying amount (stage 2) Gross carrying amount (stage 3)
High 0.1% 754,412 - -
Medium 10.0% - - -
Low 20.0% 49,888 - -
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2024
28 Financial risk management (continued)
Group internal credit rating as at 31 March 2024 Expected credit loss Gross carrying amount (stage 1) Gross carrying amount (stage 2) Gross carrying amount (stage 3)
High 0.1% 1,052,187 - -
Medium 10.0% - - -
Low 20.0% - - -
Performing Under-performing Non-performing Total
As at 31 March 2023 £ £ £ £
Individual financial assets transferred to underperforming (lifetime expected - 49,888 - 49,888
credit losses)
Performing Under-performing Non-performing Total
As at 31 March 2024 £ £ £ £
Individual financial assets transferred to underperforming (lifetime expected - - - 49,888
credit losses)
No significant changes to estimation techniques or assumptions were made
during the reporting period. The Group has assessed the default risk as very
low on franchisee loans as these loans are made to franchisee's rather than a
traditional third party. No expected credit loss has been recognised for Stage
1 loans in line with management's assessment.
The loss allowance for loans to franchisees as at 31 March 2023 and 31 March
2024 reconciles to the opening loss allowance for that provision as follows:
Out of the total impairment provision of £92,569 (FY23: £280,425), £92,569
(FY23: £230,537) relates to specifically impaired trade receivable debt and
£NIL (FY23: £49,888) relates to franchisee loans.
Liquidity risk
The Group's policy is to ensure that it will always have sufficient cash to
allow it to meet its liabilities when they become due.
The Board receives cash flow projections on a regular basis which are
monitored regularly. The Board will not commit to material expenditure in
respect of its ongoing development programme prior to being satisfied that
sufficient funding is available to the Group to finance the planned
programmes.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2024
28 Financial risk management (continued)
The following table sets out the contractual maturities (representing
undiscounted contractual cash-flows) of financial liabilities:
2024 2023
£ £
Borrowings - due within one year 146,544 104,498
Borrowings - due within one to two years 158,337 109,296
Borrowings - due after more than two years 838,713 1,022,996
1,143,594 1,236,790
Lease liabilities - due within one year 280,425 270,117
Lease liabilities - due within one to two years 291,123 280,425
Lease liabilities - due within two - five years 941,720 907,113
Lease liabilities - due after more than five years 916,570 1,242,300
2,429,838 2,699,955
Trade and other payables
2024 2023
£ £
0 - 30 days 3,603,819 2,995,879
30 - 60 days 1,265,251 768,490
60 - 90 days 19,914 -
90 to 120 days 3,244 2,044
4,892,228 3,766,413
Interest rate risk
The Group is exposed to interest rate risk due to entities in the Group
borrowing funds at both fixed and floating interest rates. The risk is managed
by the Group by maintaining good relationships with banks and other lending
providers and by ensuring cash reserves are high enough to cover the debt.
Where possible fixed terms of interest will be sought.
The Group analyses the interest rate exposure on a regular basis. A
sensitivity analysis is performed by applying a simulation technique to the
liabilities that represent major interest-bearing positions. Various scenarios
are run taking into consideration refinancing, renewal of the existing
positions, alternative financing and hedging. Based on the simulations
performed, the impact on profit or loss and net assets of a 100 basis-point
shift (FY23:100 basis-point shift) would be a change of £11,436 (FY23-
£12,368).
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2024
28 Financial risk management (continued)
Capital risk management
The Group considers its equity capital to comprise its ordinary share capital
and retained profits. In managing its capital, the Group's primary objective
is to provide return for its equity shareholders through capital growth and
future dividend income. The Group's policy is to seek to maintain a gearing
ratio that balances risks and returns at an acceptable level and also to
maintain a sufficient funding base to enable the Group to meet its working
capital and strategic investment needs. In making decisions to adjust its
capital structure to achieve these aims, either through new share issues or
the issue of debt, the Group considers not only its short-term position but
also its long-term operational and strategic objectives.
Details of the Group's capital is disclosed in the Consolidated Statement of
Changes in Equity.
There have been no other significant changes to the Group's management
objectives, policies and procedures in the year nor has there been any change
in what the Group considers to be capital.
Currency risk
The Group is not exposed to any significant currency risk. The Group manages
any currency exposure by retaining a small holding in US Dollars however all
other cash balances are held in Sterling.
29 Events after the reporting period
Final dividend
Post year end the directors have recommended a final dividend of 6.1p per
share (FY23: 5.5p per share).
Purchase of land and buildings
Following the year end, the opportunity arose to purchase the land and
buildings neighbouring our current depot in Bradford. As the opportunity to
acquire the land adjacent to our current facilities are rare, the Board took
the decision to take advantage of the opportunity and move ahead and purchase
the land and buildings. This will enable the Group to service its further
expansion in the north of England and Scotland. The purchase price of the land
and buildings was £0.7m, with a further estimated £0.6m to construct a new
warehouse on the land. The purchase of the land was concluded during May 2024,
out of current cash reserves.
30 Subsidiary undertakings
Name Country of incorporation Class of shares Holding Principal activity
Eggfree Cake Box Limited United Kingdom Ordinary 100% Franchisor of specialist cake stores
Chaz Limited United Kingdom Ordinary 100% Property rental company
The above subsidiaries have the same registered office address as Cake Box
Holdings plc.
31 Note supporting statement of cashflows
2024 2023
£ £
Cash at bank available on demand 8,453,905 7,353,183
Cash on hand 360 400
8,454,265 7,353,583
There were no significant non-cash transactions from financing activities
(FY23 : none).
Non-cash transactions from financing activities are shown in the
reconciliation of liabilities from financing transactions below:
Non-current lease liabilities Current lease liabilities Non-current borrowings Current borrowings Total
£ £ £ £ £
As at 31 March 2022 2,699,957 260,192 1,185,978 167,754 4,313,881
Cash flows
Repayments - (365,000) - (172,628) (537,628)
Non-cash flows
Interest - 104,808 50,812 4,874 160,494
Non-current liabilities becoming current during the year (270,119) 270,119 (104,498) 104,498 -
As at 31 March 2023 2,429,838 270,119 1,132,292 104,498 3,936,747
Cash flows
Repayments (365,000) (175,246) (540,246)
Non-cash flows
Interest 94,881 11,302 70,748 176,931
Non-current liabilities becoming current during the year (280,425) 280,425 (146,544) 146,544 -
As at 31 March 2024 2,149,413 280,425 997,050 146,544 3,573,432
32 Ultimate controlling party
The Group considers there is no ultimate controlling party.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2024
33. Earnings per share
2024 2023
£ £
Profit after tax attributable to the owners of Cake Box Holdings plc 4,658,685 4,236,671
Number Number
Weighted average number of ordinary shares used in calculating basic earnings 40,000,000 40,000,000
per share
Weighted average number of ordinary shares used in calculating diluted 40,734,718 40,000,000
earnings per share
Pence Pence
Basic earnings per share 11.65 10.59
Diluted earnings per share 11.44 10.59
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