Maggie Beer Holdings (MBH) has a $28m loss for FY24, with Paris Creek Farm's underperformance bringing its future into question once more. Meanwhile, sales in Maggie Beer Products rose eight per cent.
In its trading update on expected FY24 financial results, MBH said group revenue would be ~$89 million, slightly up on the $88.7 million in FY23.
While MBP recorded eight per cent growth, Hampers and Gifts Australia only grew one per cent, while Paris Creek Farms’ ongoing sales decline resulted in a six per cent drop in sales.
PCF was impacted by a lower-than-expected supply of organic milk, but its poor performance sees its future with MBH under question once again, with a strategic review underway and an advisor appointed to “consider all options” to optimise the value of the business.
MBH CEO, Kinda Grange, said, “The deterioration in our PCF business has had a significant impact on the group’s financial results and we are undertaking an urgent review of this business.
“We are implementing further cost reductions, streamlining the business and looking at all options to increase profitable revenue and build the Maggie Beer brand.”
MBP’s performance was driven by its category expansion into sauces, stocks, and ice cream and increased online business, which was up around 24 per cent in 2H24 compared to prior corresponding period (pcp).
“While full year HGA sales are expected to be ahead of the prior year, sales in the second half were adversely impacted, reflecting lower discretionary spend and cost of living impacts across the wider market and a decrease in consumer demand for hampers,” the company said.
Key initiatives in 2H24 included price increases, SKU rationalisation, a reduction in the casual labour and introduction of AI driven customer service have been completed. These would assist on improved profitability in FY25 which will assist in improving profitability in FY25, it said.
The earn-out dispute with the original owners of HGA is ongoing, with the NSW Supreme Court recently sending the dispute to expert determination (on the Court’s construction of the share purchase deed). The HGA board maintains its previously stated position that there is no obligation to pay an earn-out to the HGA vendors due to the earn-out hurdle not having been met.
Meanwhile, the company has identified a large-scale quality manufacturer to supply Maggie Beer cheese and signed a long-term supply agreement.
Grange said, “We have been able to grow revenue, particularly in Maggie Beer Products, and we have implemented strategies to grow the corporate hamper business.
“While Group revenue has marginally increased, challenging market conditions have placed additional pressure on EBITDA.
“While the market is challenging, our financial position remains strong with a net cash position and no bank debt which continues to support the business and assist in funding growth initiatives."
