CAKE BOX HOLDINGS PLC has raised £7.0 million through a share offer to partially fund its acquisition of Ambala Foods Ltd, a UK-based Asian sweets manufacturer and retailer.
Cake Box, which sells fresh cream celebration cakes, placed 3.9m new shares at 180 pence each through Shore Capital Stockbrokers Ltd.
The new shares represent 8.9 per cent of the company’s total. AJ Bell reported that Cake Box shares rose 1.6 per cent to 193.00p on Wednesday morning in London.
Of the total amount raised, £210,000 came from Cake Box directors, including £100,000 from CEO Sukh Chamdal.
The company is also offering up to 111,111 new shares at 180p each to retail investors through the BookBuild platform, aiming to raise an additional £200,000.
The remaining purchase amount will be funded through a £15m term loan and existing cash.
Ambala Foods, which has been in operation since 1965, runs 22 stores in the UK and a manufacturing facility in Welwyn Garden City.
It reported a pretax profit of £1.8m on £14.0m in revenue in financial 2023.
Cake Box expects the acquisition to be earnings enhancing and has identified at least £1m in efficiency gains from integrating Ambala’s operations.
The company said it has continued to trade strongly, with Christmas and New Year’s sales exceeding £4m.
It remains confident of meeting market expectations for the financial year ending 31 March.
