Cake Box Share Discussion Threads

[farukequity] 14/9/2023 16:19

There is Cake Box shop on my high street. Few months ago another shop opened just down the road with similar name ('Cakes & Bakes' if I recall correctly) selling similar cream cakes, with good discounts on first order. They even seemed to poach shop staff from Cake Box. Guess what - after some initial interest, every day I pass the new store on the way back from work, it seems empty, there is literally no customers - while Cake Box shop seems to be doing good business. Going by my own example, I'd rather pay a few pounds more 2x a year for a guaranteed quality & delivery of my kids birthday cake, rather than take a risk on another, untried shop (particularly if it seems empty most of the time). I think the Cake Box brand & franchise has legs & bit of a moat.

[sid_b] 14/9/2023 10:04

@levinson has this strategy worked so far for you? You should share your short position. Maybe we can all gain by learning from you :)
Take a short position and keep posting/tweeting to sell. Is that it or is there more to your investing strategy?

[levinson1] 14/9/2023 09:11

Imo get out while you can at these levels. I said this at 180p, 170p 160p and now imo they're on their way back down sharply.A P/E of 13 is far too high for a company which did not grow its profits. Profits must come under pressure surely with offerings from growing cheaper competitors.I think in a very short time you will still be lucky to get ...View Full Message

[levinson1] 14/9/2023 09:10

Price still falling

[levinson1] 14/9/2023 09:05

Imo get out while you can at these levels. I said this at 180p, 170p 160p and now imo they're on their way back down sharply.A P/E of 13 is far too high for a company which did not grow its profits. Profits must come under pressure surely with offerings from growing cheaper competitors.I think in a very short time you will still be lucky to get -30p for this stock. Overrated , imo strong sell

[levinson1] 13/9/2023 09:14

Agreed but alas don't think it will happen. I liked the Chairman who has unfortunately just left

[levinson1] 13/9/2023 09:03

Now price is slipping under the supposed bid approach price. Doesn't look like they are coming back by the price. Many more shares on offer than bid. If I had any left I'd sell whilst they are still at this level imo

[pogue] 12/9/2023 22:12

That would definitely get me interested in investing here again.

[sid_b] 12/9/2023 18:58

Agree with your point regarding CEO/Management. Hoping to see a new mgmt and revamped board.

[pogue] 12/9/2023 17:58

I dont have any CBOX shares I am waiting till I see an opportunity I sold mine long time ago, at a profit. I am here to discuss the investment opportunity but I dont see it just now especially since the CEO seems to have been missing some vital point in previous presentations I listened to regards competition, saying there was no one like CBOX and only small family bakers seems a gross stretching of the truth. Not the most trustworthy CEO I have listened to. I will wait for a decent price or something makes me believe this is a safe bet.

[sid_b] 12/9/2023 17:14

I don't see eggless cake as causing any more harm than all the other cake shops on the street. But happy to disagree. I continue to hold CB.

You can always sell if you don't see the future in CB and if you feel eggless cake can scale up faster and more profitably than CB so much so that CB won't have any further room to grow profitably.
I wish you the best.

[pogue] 12/9/2023 16:02

I am pointing out they have no moat as was suggested. There already exists a competitor that is smaller just now but could easily grow. The fact they are selling cakes at a lower price with no competition suggests they have lower costs. I am sure they are very aware of Cakebox's prices and what they could charge so not doing so suggests they are comfortable with profits as they are. Eggless Cakes have a franchise option so they believe they can scale up clearly.

[sid_b] 12/9/2023 15:05

@Pogue, I would say that you are oversimplifying the relationship between costs and prices. If need be, CB has room to reduce price to compete. But only "If need be".

To your other point, even if Eggless cake grows to the size of CB, there is surely room for multiple players to exist in this market. But the bigger thing here is that there are many ifs and buts around how Eggless cakes scales, how profitable they remain and how quickly they can scale. CB is a proven model that has scaled effectively and profitably.
Eggless cake can scale but it's still to be seen... and we know nothing about their financials and supply chain yet to comment much more.

[pogue] 12/9/2023 14:49

Cakebox have always said that it was only little one or two shop chains they were dealing with how do you know The Eggless Cake Shop wont grow it is a franchise operation.
If they are selling 22% less than Cakebox then I suggest they have a lower cost of operation.

[sid_b] 12/9/2023 14:11

@Pogue Economies of scale help on the costs side. The owners can price the product based on its pricing power in the market (and make bigger profits with economies of scale). So, CB need not pass on all cost efficiencies to the end-customer. It will price it at a point that they are comfortable with.


With regard to egglesscakeshop, we don't know what their profits are, if there are any. Secondly, with only 25 stores it's like many other cake shops that CakeBox has to compete with in their local areas. Franchisees will deal with that local area strategy. However, the key here is that CB has the potential to keep their costs low owing to their economies of scale and the market is huge. We will need to start worrying when people stop buying cake from Cakebox, i.e. like-for-like sales start to slide on a consistent basis.

[pogue] 12/9/2023 13:35

Sid_B
not sure what Levinson is saying that you are replying to as I have him filtered but Cakebox is not the cheapest egg free cake company in the uk that runs franchises.
See below for link to Cakebox and the Eggless Cake Shop for a randomly chosen chocolate and strawberry cake.
Cakebox is 22% more expensive.

[sid_b] 12/9/2023 12:07

Cakebox's MOAT is not there because of a lack of cake or bakery shops in the country. It's due to the fact that it can make decent cakes in a way that optimises economies of scale through a hub-spoke model. And there are no players currently in the market that have an optimised supply-chain sorted out to leverage scale as CakeBox does today.


There are a number of other stuff that the management can work on (maybe new mgmt. needed) but the shareholders for now can still get the benefit of unchallenged economies of scale at that price-value proposition that CB offers.

[levinson1] 12/9/2023 09:53

Now under the supposed bid approach price. Doesn't look like they are coming back by the price. Many more shares on offer than bid. If I had any left I'd sell whilst they are still at this level imo

[pogue] 04/9/2023 18:58

Not sure if this is connected to the egglesscakeshop being taken seriously however I notice on the side of the Cakebox factory there are new long terms signage attached to the building saying eggfreecake.co.uk which takes you to the cakebox website. Worried about the competition surely not, they dont exist apparently.

[levinson1] 01/9/2023 11:02

Is that why the price keeps falling ?

[johndoe23] 01/9/2023 08:35

They're actually buys

[levinson1] 01/9/2023 08:33

And the selling continues. Imo it will soon look very smart to have sold at 150p and lower

[levinson1] 01/9/2023 08:04

I've been saying sell since they were 180p. Imo get out of this stock which is falling back with queues of sellers

[levinson1] 01/9/2023 08:02

Will the 150 p bid level be pierced today ?