ZB

My Food Bag lifts annual profit, pays dividend

Author
Jamie Gray, NZ Herald,
Publish Date
Fri, 20 May 2022, 10:21am
(Photo / Supplied)
(Photo / Supplied)

My Food Bag lifts annual profit, pays dividend

Author
Jamie Gray, NZ Herald,
Publish Date
Fri, 20 May 2022, 10:21am

My Food Bag said tight cost management allowed the meal kit company to mitigate the impact of a number of macro-economic challenges and deliver an 18.1 per cent lift in operating earnings to $34.2 million for the March year.

The company's net profit - including a $14.1m deduction of one-off transaction costs - came to $20m, up from $2.4m in 2021.

My Food Bag, which listed in March last year, declared a fully imputed dividend of 4 cents per share, bringing the total for the year to 7 cents.

Today's numbers were in line with an earnings guidance issued in April.

"In 2022 the business mitigated a number of macro-environment challenges, such as inflation, labour availability and supply chain pressures," chairman Tony Carter said.

"These were alleviated via selective price increases and tight cost management, as well as working closely with suppliers to adjust customer offers as required and micro-management to navigate labour uncertainty, particularly in Q4," he said.

Revenue came to $194m, up $7.6m on its listing document forecasts and up $3.3m on 2021.

The company delivered more than 18 million meals in 2022 and achieved an average order value of $126.60 - up $2.23 on 2021.

In July, the company introduced My Food Bag Kitchen, a curated collection of food solutions for different meal occasions.

"By the end of 2022, we have been achieving attachment rates of 14 per cent and average order value of $21, which puts us in a good place as we scale the initial pilot offering in 2023," Carter said.

Across the year the contribution margin was up 1.6 percentage points year-on-year, largely driven by improved procurement.

Conversion of active customers into high value customers also remained strong, with this group growing 7 per cent year-on-year.

Active customer numbers were particularly strong in Q2 and Q3, up 3.8 per cent and 1.5 per cent year-on-year, respectively.

However, numbers softened in Q4, as the business worked through the supply-side challenges during the Omicron outbreak.

Current active customers - as of May 18 - were about 66,700.

Chief executive Kevin Bowler said the business anticipates continued uncertainty across macro-environment pressures, but said it had clear opportunities to grow.

"We have a strategy to continue taking a greater share of Aotearoa's $37 billion retail food sector, via a pipeline of growth initiatives," Bowler said.

"Underpinned by our strong brand and distribution reach, we continue to look for opportunities by offering exceptional recipes and ingredients, enhanced customer flexibility and choice," he said.

Shares in My Food Bag were offered to investors last year at $1.85 a share but the stock has been on a slide ever side, closing on Thursday at 79c.