Kinda Grange marked 100 days as CEO with setting the goal of quadrupling sales in five years, to become a $300 million company. Grange said there was an almost $36.6 billion scope in market opportunity for MBH – $8.3 billion in food, $5.8 billion in lifestyle/culture, and $22.5 billion in gifting.
At the end of May, the company provided a trading update, saying EBITDA for Maggie Beer Products (MBP) and Hampers & Gifts Australia (HGA) is expected to be between $3.5-4.5 million and FY23 revenue between $70-75 million.
Macroeconomic factors including rising interest rates and inflation continue to impact consumer spending across retail and e-commerce channels. Higher energy, freight, and labour costs have also dampened trading EBITDA.
2H Group sales were strong, with revenue up 5.3 per cent thanks to 13.7 per cent revenue growth by MBP. HGA had a tougher half with revenue down 12.2 per cent to the end of April, with MBH saying it reflected a shift back to bricks and mortar retailing, compounded by Mother’s Day sales down 13.2 per cent on the previous year.
MBH was also looking at an earn-out liability for HGA as part of the purchase agreement in 2021. The provision was for $10 million if HGA achieved $10 million in FY23. The MBH board said it didn’t expect the earnout to be met, so FY23 NPAT will get a positive bump.
Kinda Grange lays out FY24 and beyond
Grange said integrating MBH’s three current business units into a unified outfit will find cost efficiencies and streamline operations. She wants to expand MBP, with its core range as well as expanding the brand into lifestyle channels, using existing ecommerce capabilities.
With the goal to grow net sales from $32 million to $125 million over five years, Grange outlined a “Good Food, Good Life” concept.
Good Food incorporates cooking, entertaining and desserts, while Good Life takes in kitchen, and two new categories, home, and garden.
In FY24, there are plans to launch pasta and sauces, inhouse cheese, and expand the ice cream portfolio. For the Good Life contingent, Grange announced FY24 would see the addition of baking and cooking products to its kitchen category, and gardening products, table settings and other entertaining products for the first time.
Paris Creek Farms not for sale
After being declared a non-core asset a year ago and put up for sale, Paris Creek Farms has been welcomed back into the fold as a continuing asset and the for sale sign removed.
The board said it was another strategic review that saw the viability of PCF if its facility was upgraded and used as a financially and operationally sustainable dairy manufacturing asset to manufacture Maggie Beer Products, including its cheese products.
“The board has determined that with modest capital expenditure, the PCF facility is able to be upgraded and utilised as a financially and operationally sustainable dairy asset,” MBH said.
Bringing PCF in from the cold could see around $16-17 million additional revenue but a trading EBITDA fall of between $1.3 -1.5 million.
The goal is to capitalise on increasing demand for premium dairy, with speciality cheeses already MBP’s largest category, with a loyal super-premium shopper. In FY23 YTD, cheese hampers delivered $2.9 million in revenue for HGA.
Grange said the company would “sweat the asset” as it looked to reduce costs and adopt a “zero waste mindset”.
The investment in PCF’s capabilities would be in white mould cheese capacity and capability.
