Sunday 18 November 2018

Cake Box founders to pocket £17m on stock market debut

Sukh Chamdal and Pardip Dass launched the franchise in 2009.

Pardip Dass (right) and Sukh Chamdal (centre) launched the Cake Box franchise in 2009 (Cake Box/PA)
Pardip Dass (right) and Sukh Chamdal (centre) launched the Cake Box franchise in 2009 (Cake Box/PA)

By Kalyeena Makortoff, Press Association Chief City Correspondent

Cake Box’s founders are set to pocket £17 million after the cream cakes retailer makes its stock market debut in London next week.

The company – which specialises in egg-free fresh cream cakes to order – will be worth around £43.2 million upon listing on London’s Alternative Investment Market (AIM).

None of the initial funds raised will go towards the 91-store franchise, which has been cast as having a “capital-light growth model”.

That cash will instead be taken home by founders Sukh Chamdal and Pardip Dass.

With no direct national competitor for egg-free, fresh cream, personalised cakes, Cake Box is well positioned to continue to expand its slice of the sizeable UK cake market both in stores and online Chief executive Sukh Chamdal

Chief executive Mr Chamdal said the IPO has had “an excellent reception”.

Cake Box started as a single site in east London in 2008 and launched as a franchise a year later.

The company is now aiming to grow to 250 franchise sites in the UK.

“Our growth has been driven by the quality of our delicious fresh cream cakes and the attractive proposition we offer to our expanding number of franchisees,” Mr Chamdal said.

“We are currently growing our franchise estate by two stores a month, with a significant number of potential locations for further new stores already identified.

“With no direct national competitor for egg-free, fresh cream, personalised cakes, Cake Box is well positioned to continue to expand its slice of the sizeable UK cake market both in stores and online.”

Revenue for the group has risen from £5.6 million in 2016 to £12.8 million in the year to March 2018.

Underlying group earnings rose from £1.4 million to £3.7 million over the same two-year period.

Average annual franchise store earnings – on an underlying basis – across the business was around £94,000.

Cake Box will launch on AIM on Wednesday June 27, with Shore Capital serving as the sole bookrunner for the initial public offering (IPO).

Press Association

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