My Food Bag has cut 10 per cent of its “non-operational” team and plans to delist from the ASX due to “poor liquidity and low daily trading” as net profits plunged 60 per cent in the last 12 months.

The Kiwi meal-kit company today posted its full-year results to March 31 showing net profit after tax down 60.5 per cent on last year at $7.9 million.

The company completed a restructure in March this year which cut 10 per cent of non-operational staff.

My Food Bag chief executive Mark Winter and chair Tony Carter said the company planned to cut overheads by delisting from the ASX, “right-sizing lending facililites” and ending an employee share ownership scheme (ESOS) for eligible staff in 2024.

The delist comes as “My Food Bag’s primary or ‘home’ exchange is the New Zealand Stock Exchange (NZX)”, according to Carter.

He said the ASX listing was a secondary listing.

“If removal from the official list of ASX is approved, the company will continue to be listed on the Main Board of the NZX and trading on the NZX will continue after the ASX de-listing process.”

Carter added: “Delisting from the ASX will save the business money and is consistent with the review of our cost base to identify cost-saving initiatives.

“Trading in the company’s shares on the ASX has poor liquidity and low daily trading volumes, so the board considers the cost of continuing a listing on the ASX outweighs the benefits.”

Operating earnings (ebitda) fell 46.5 per cent in the same period to $18.2m, with revenue down 9.4 per cent at $175.7m.

Winter and Carter said ebitda was driven by “diseconomies of scale” and the impact of subdued demand.

“Inflationary pressure on households and low consumer confidence have resulted in more subdued demand over the second half of the year,” Winter and Carter said.

They said deliveries were down 11.8 per cent on last year with lower active customers and retention rates pulling down revenue.

Winter and Carter said the company delivered more than 15.7 million meals and an order value of $130.11, up $2.7 per cent on $126.63 in the previous period through strong Bargain Box sales.

Outlook

The company said it would continue a fully-imputed dividend of $0.03 per share after it didn’t pay out a dividend in the last half-year. The dividend was down from $0.08 per share declared in the last period.

The total dividend pay-out was at 92 per cent of net profit after tax, outside the company’s distribution target of 70-90 per cent.

The board decided not to pay a final dividend for the full-year.

Winter and Carter said the company intended to “stabilise sales and execute a disciplined plan to drive sustainable active customer growth” in the next year.

“Our investment in pick technology, initiatives to increase choice, flexibility, customisation and value for customers, and our focus on cost will drive performance over the coming financial year,” they said.

“We look forward to FY24 where we can demonstrate the strength of the business with a focus on leveraging our strong understanding of Kiwis’ needs, our digital platform and our nationwide supply chain to grow demand.”