Updates and Ideas

Cake Box - IPO spikes to large premium

August 2018

Investing in shares may lose you all or some of your money. Past performance is no indication of future performance. Some of the shares recommended here may be small company shares, which can be relatively illiquid and hard to trade and this makes such shares more risky than other investments.

Readers of TMI will already have enjoyed the marvellous success of cake shop chain, Patisserie Holdings (highlighted at 204.5p, now 440p). Another similar business making a splash is Cake Box, which listed on 27th June at 108p. Although existing shareholders sold £16.5m and no new money was raised, the shares quickly climbed to 162p with investors hypnotised by its revenues rising from £5.6m to £12.8m in the two years ended 31st March 2018 while pretax profit increased from £1.17m to £3.3m.Cake Box is a franchise retailer of cakes with its USP being to offer egg free cakes to appeal to those with egg allergies or observing a lacto-vegetarian diet. The first concept store opened in 2008 in East London f ...

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With small companies there is an above average degree of risk compared to buying blue chips. Please be aware that we have not assessed the suitability of any of these investments for you. The newsletter simply states a personal view and diarises the editor’s investment decisions. Please speak to your stockbroker or other qualified individual to ascertain whether any of these companies mentioned would form useful additions to your own portfolios. Past performance is no indication of future success.

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