Cake Box Share Discussion Threads

[sapporo59] 31/8/2022 15:17

john doe 23 brutally shafted

[trytotakeiteasy] 31/8/2022 14:07

Would pretty much agree with the below comment. The founder sold at 350p. CFO resigned and then sold a lot before this warning.

"My opinion is that this was a well timed listing for the founders who have since used it as a money extraction scheme…"

The company has seemed to have a lot of positive PR and done lots of investor relations things. AJ Bell webinars, Vox Markets etc.

[johndoe23] 31/8/2022 14:00

Short to sub 100p

[trytotakeiteasy] 31/8/2022 13:11

Looks like a slice of pain!

[pogue] 31/8/2022 10:39

dead cat bounce will probably happen that was a violent drop but after that...? I think there is no hope of turning it around short term until the economy picks up.

[sapporo59] 31/8/2022 09:25

far oversold, I see a partial recovery, good trade at this price

[chesty1] 31/8/2022 09:11

Cake Box - a slice of pleasure or pain?

PAIN!!!!!!!!!!

[pogue] 31/8/2022 09:07

Time to be patient and hold off buying I suggest I am not seeing how this can recover short term in current environment unless fleecing deposits of new franchisees who may go bankrupt is the business model.

[brummy_git] 31/8/2022 08:37

Tough day at the office for CBOX.

All the news, latest valuation & commentary here.

www.linkedin.com/posts/paul-hill-a5994116_cbox-cbox-cbox-activity-6970642005911576577-lwyD?utm_source=share&utm_medium=member_desktop

[chisdeal] 31/8/2022 08:37

Surely this company would benefit from being bought out by someone with competence to run a small/medium PLC. Current management seem clueless

[actybod] 31/8/2022 08:25

From Brummyg Longer term too, #CBOX "continues to increase its geographic reach, with a strong pipeline of potential new franchisees and site deposits". So putting all this together, I would value the stock on a 12x-14x FY'23 EV/EBIT multiple. Which adding in the Est FY'23 net cash balance of £5.0m (vs £5.2m LY), generates an intrinsic worth of between 180p-205p/share (vs 127p currently), alongside paying a healthy 5.5p dividend (4.3% yield). Time to be patient.

[multibagger] 31/8/2022 08:20

With so many family holders and related parties (about 26% or so I seem to recall) there will be pressure to pay dividends...not a sustainable business IMHO in the current high inflation and discretionary spend climate. Plenty more pain to come sadly.

[tomboyb] 31/8/2022 08:11

Not as bad as some of the others I have seen -

floated at 108p so they have made around £16mill for founders on float and current share price is above float price so far -

Won't touch it at these levels however, and I do think a dividend at this stage probably not best for the business -

74tom agreed with that opinion -

[pogue] 31/8/2022 08:09

Sorry but I did predict falling sales and declining margins seems today has just proven me right. Hate to say it but it was so obvious. Discretionary retail will not do well with high inflation in a recession so more pain to come. Plus you have the high energy costs for baking at the factory etc. I suggest expanding the business is not a good idea preserving capital should be the key thing just now. Will keep watching as its interesting to have a barometer.

[74tom] 31/8/2022 07:39

Suspect this goes sub £1 on that update, the CEO will be getting a ~£500k dividend in a few weeks despite the business performing significantly below expectations, that’s nearly 10% of the gross cash balance going in his pocket… For PI’s a 5.1p dividend is irrelevant if they lose half their invested capital.

My opinion is that this was a well timed listing for the founders who have since used it as a money extraction scheme…

[trytotakeiteasy] 24/8/2022 14:42

Interesting that someone buying today and holding for say 12 months gets about a 6.7% dividend assuming no dividend increase in the next fiscal year.. if there is a dividend increase as is likely they should get over 7% by way of dividend yield.... this is all because by holding for 12 months you get the final dividends for the previous fiscal year and the current fiscal year.

By way of the sums... the final dividend for the prior fiscal year was 5.1p.. ex-dividend on that tomorrow..

So then we add the dividend for the total dividend payments for the current fiscal year - interim and final. If we assume they are the same as last year we have 7.6p in total.....

So this gives 7.6p + 5.1p dividends over 12 months = 12.7p

/ current share price gives a yield of 6.6% if held for 12 months but this assumes the dividend payments (interim and final) don't increase this year. If they do, someone owning the shares for 12 months from today should get a total dividend yield of 7% or more.

Dividends paid / current share price of 190p...

People will say this not the natural yield.. correct.... the historic yield using last year's total dividend payments is 7.6p/190 = 4%.

In forecasts I have the dividend is not expected to increase in this fiscal year which is surprising to be honest. It is forecast to stay at 7.6p... but in the following year, it is forecast to increase to 8.01p.

All this is assuming of course that the whole thing doesn't go wrong. But it is generally unusual for dividends to be cut unless there is significant business stress. CBOX has net cash and the dividend cover is approaching 2X.

[ditchsid] 23/8/2022 08:09

Next dividend goes ex-div on 25 August.

[trytotakeiteasy] 22/8/2022 23:24

I also don't get why they have an increasing net cash position, why not pay it out as dividends? Capital investment needs don't seem to be high. Plus I don't get why they seem to have a debt position. Why not just pay this off with the cash balance?

These may be minor qualms and the key really is that the new auditor has signed off the accounts and there is an interim finance director on board. One thing that does concern me is the former FD selling most of his shares.

Is there an incentive to do anything dodgy? The founder I think sold a lot of shares at 350p. But they don't need to raise any more money. I think the share count has stayed the same since the IPO, which is impressive.

So it is a tough call and it all depends on whether there are more skeletons in the cupboard and medium-term trading conditions. Next trading update I think is early October for the six-month period to the end of September.

Hot weather may mean more parties and cake and we also had the Queen's Jubiliee. But people are feeling the pinch too so it is hard to say.

[ataieb72] 22/8/2022 16:29

Nice catch - I didn't check the interest income since it is not significant, but the change of interest income / average cash balance is a little bit strange actually

[trytotakeiteasy] 22/8/2022 14:39

Interest income seemed to be down despite the cash balance being up. That seems strange. Any thoughts on that?

Energy bills - This is a fair point but I think the advantage of the model is that Cakebox franchisees are takeaway only and so do not have serving staff (wage inflation) or the need to heat large premises. This contrasts with pubs or restaurant chains. They are also only baking sponges I think which I doubt is too energy intensive versus something like making huge quantities of bread in a baker.

This is just a layman's view and I don't have a particularly strong insight.

Like-for-like sales have been strong implying that CBOX stores have been getting busier which provides more scope to cover cost increases. Also, internet orders have been increasing which I think frees up staff time on the till.

I think I read that something like 98% of their franchisees are profitable. One possible inflation offset is that rents for commercial properties may decline given oversupply.

[ataieb72] 22/8/2022 14:23

Also, while I am comfortable with the company's balance sheet, I do not think that the franchisees can handle a huge increase in energy bills next year

[ataieb72] 22/8/2022 14:20

I wasn't able to tie the change in trade receivables and payables between the balance sheet and the cash flow statements (it tied for the previous years so it is a little bit strange)

[trytotakeiteasy] 21/8/2022 22:19

Cakebox annual report out. Auditors appear to give it a clean bill of health. A lot of information there. Does anyone spot any issues in it?

[justiceforthemany] 21/7/2022 15:26

Huge spread