Cake Box Share Discussion Threads

[johndoe23] 26/6/2023 06:08

Investors here should have used update from HOTC last week as a chance to bail

[terminator101] 26/6/2023 06:04

Profit down significantly huh.

[disc0dave45] 24/6/2023 20:21

LemonadeDon't think I've ever said that franchisees are being ripped off......but with sales growth not matching the increase in shops/kiosks then the BoD are inflating the amount they are charging new franchisees to make it look like the group is profitable, if I were a new franchisee I'd think I was being ripped off - they are now charging new franchisees £160k (minimum) plus VAT, so from £192k. Think the average income per franchisee is about £177k, so yes they are being ripped off!.They do charge £200 per month as a service charge to cover ongoing training, support, seminars, etc.As posted previously I'm concerned about trust in the BoD and the direction they seem to be going, same as domino pizzas.

[levinson1] 24/6/2023 14:04

Discodave is right. Costs being passed on to franchisees and one would expect income per shop to go down in this economic climate. The shops revenue is another problem . Is this model sustainable ?

[lemonade311] 24/6/2023 10:56

I had a look over your numbers DiscoDave.

While it seems that you are correct in that the franchisee fees have increased, I can't come to the same conclusion that CakeBox is 'ripping off' it's franchisees.

- Income per store at cakebox has indeed fallen, this is expected when inflation goes up as cakes are discretionary. The share price has also collapsed.

- The franchisee package they charge is a one off fee that is a small % of revenue. I presume it's a small % of profits too.

They do not charge a recurring fee % which is actually surprising given that most other franchisors do.

They charge their franchisees the sponge, cream etc and make a % on that. Those costs to franchisees have been flat since last year which suggests to me that they aren't ripping off their franchisees as I would have expected a big increase if they were.

Here's their admission document: hxxps://investors.eggfreecake.co.uk/wp-content/uploads/2018/06/Cake-Box-Holdings-plc-Admission-Document.pdf

I don't see the red flags like you do personally, I only see a poor macro-economic situation.

- > Online orders are sent through to a store selected by the customer and the Group takes a royalty fee of 7.5 per cent.

That's just for online orders though.

- It doesn't make sense for the CEO to do this, seen as he owners the majority of CBOX shares, his incentive is to grow the business properly with the franchisees on a good relationship.

[levinson1] 21/6/2023 06:12

Passed 3 CBOX shops yesterday - all empty- a bit worrying. When the figures come out will there be a harsher forecast

[levinson1] 15/6/2023 11:55

India and overseas franchise deal with the results this month ?

[levinson1] 15/6/2023 11:07

Results and divided must be due soon. Imo definite goodies to come with it . Shore Capital ( the house) now on the bid and tellingly price improving over last few days. Market is bidding for stock

[levinson1] 15/6/2023 11:06

On the bid

[levinson1] 15/6/2023 11:06

Results and divided must be due soon. Imo definite goodies to come with it . Shore Capital ( the house) now in the bid and tellingly price improving over last few days. Market is bidding for stock

[justiceforthemany] 05/6/2023 17:07

Oil price has barely moved today actually after that OPEC cut, trend is down.
Diesel price was around 200p for much of the last year.
Now down to 140p.
Inflation still high yes numpties but coming down and fast...

[disc0dave45] 05/6/2023 14:29

Was asking a simple question, but guess it's above your intellect, obviously from your childish rant.Filtered

[disc0dave45] 05/6/2023 11:25

I expect a positive trading update soon with inflation coming down, margins improving and sales growth.What sales growth?, food inflation?

[pogue] 05/6/2023 11:19

You have noticed the BoE is expected to increase interest rates as inflation is not coming down as expected havent you?

[justiceforthemany] 05/6/2023 10:56

I expect a positive trading update soon with inflation coming down, margins improving and sales growth.
8p full year dividend.
Retail sales are holding up well and summer to come.
50% upside and not much downside hopefully.
Time will tell as ever. This was many multiples of the current share price and not that much has changed.
Balance sheet also excellent with net cash.

[sid_b] 27/5/2023 18:29

With regard to the point made about targeting areas with high Hindi population, I think a more accurate description of their target market is areas with lower to lower-medium income group.

I have tried manytimes to ask them how can they improve their offering to suit a middle to higher-middle income groups but haven't had any response.

[sid_b] 27/5/2023 18:25

That's something I would like to clarify with the owner - what's stopping them from opening more stores at a faster pace, given there is swathes of un/under-served regions. They also say that they have a pipeline of applicants waiting who have already submitted the franchise fee. What's slowing down store opening then?
If they don't expand at a faster pace they are not really making optimal use of a capital light model.

[disc0dave45] 26/5/2023 19:45

Yep good point.From memory wasn't their target 250 shops/kiosks, so with 205 now (and one still disappeared somewhere) seems like the target may be too optimistic and at some point will they be looking at Europe or somewhere else, which will require some capital raise I guess?.

[pogue] 26/5/2023 17:53

The problem with Scotland is there are only a few areas, ie big Cities, this will work and even there only in certain parts like Glasgow south side. 5 million population is smaller than London so not expecting massive expansions up there maybe 5 or 6 at best.

[disc0dave45] 26/5/2023 17:42

ThanksIt was the CEO's answer to the question about whether or not they'd increased the cost of the franchise packages, no wonder the questioner seemed perplexed when he said no increase.Still struggle with trust here. Respect the CEO for his business acumen in starting the business but would I hand him some of my money? - at the moment no.Agree, do think others have latched on to the demand for egg free products which will inevitably eat into their piece of the cake!.Not quite accurate in determining the likely additional demand in Scotland and Wales, but as a guide - the percentage of Hindus in Scotland & Wales is about one-third of the percentage in England, appreciate their customers aren't just from this demographic but would guess the majority are as that's how the business determines where to locate the new shops.

[pogue] 26/5/2023 17:15

Thanks for running the numbers, confirms what they are upto it may take some time to show up in the share price but it will plus that competition is going to start biting soon.

[disc0dave45] 26/5/2023 13:07

Looking at their f/cast year income (+5% to £34.65m), then the amount they charge new stores via their franchise package, could indeed have reduced in H2 compared to H1, the Rev H2 will be circa £17.85m an increase over H1 of £1.05m (for an extra 10 stores), but will have to see when they release the finals.Appreciate there are time lags to take on board with the new store openings which may be skewing my numbers but that's all I have to go on.