East London cake retailer Cake Box is to float on the AIM stock market next Wednesday as it announced a £43 million valuation.

Co-founders Sukh Chamdal and Pardip Dass will sell 41 per cent of existing shares, netting them a £17 million pay day.

More mainstream audience

The company has grown quickly from its first franchised store in Forest Green, East London when some of its egg-free cakes were sold to Hindu consumers, some of whom do not eat eggs. Since then, the companies audience has become more mainstream as general awareness has grown as vegan popularity takes off across the UK.

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‘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,’ commented chief executive Sukh Chamdal.

The company has grown its franchised stores from 20 to 91 in five years and the directors believe its current rate of opening two new stores per month to reach 250 is in line to its current target of 250 franchised stores across the UK.

Cake Box plans to raise £16.5 million for secondary growth.

Group revenue has risen from £5.6 million in 2016 to £12.8 million in the year to March 2018 and its underlying group earnings increased from £1.4 million to £3.7 million over the same two-year period. Its average per store earnings, on an underlying basis, across the business was around £94,000.

Axa Investment Managers will have a 7.9 per cent stake in Cake Box after admission and Ennismore Fund Management’s stake will be 5.2 per cent, as will Lombard Odier (Europe) SA UK’s.

Shore Capital is Cake Box’s advisor and broker.