Maggie Beer Holdings looks set to offload dairy assets Paris Creek Farms and St David Dairy, with the two accounting for more than half of the financial impacts of Covid, flood events, and the war in Ukraine.
Snapshot
- Hampers and Gifts Australia (HGA) sales up 25.6% for FY22 YTD April compared to pcp
- Maggie Beer Products (MBP) up 19.3% for FY22 YTD April compared to pcp
- MBP ecommerce sales up 165.6% for FY22 YTD April compared to pcp
- On track for net sales revenue guidance of $95m-$100m for FY22
- EBITDA expected to be in the range of $9.25m-$10.5m for FY22
In a trading update, the company said it had carried out a strategic review and determined the two dairy businesses were non-core assets.
Their underperformance, with Mother's Day ecommerce sales not generating sufficient incremental revenue growth, caused the company to restate its full year trading EBITDA to $9.25-10.5 million.
Since 1H results, the group has been impacted by further unforeseen costs and supply chain issues including sea freight charges, increased fuel costs, and disruption to retail orders and customer deliveries because of floods, Ukraine and sustained covid lockdowns in China.
The dairy assets were significantly impacted by Covid with skill shortages, staff churn, and increased training, milk haulage, and distribution costs.
The impact is expected to be $4.2 million, with the dairy assets accounting for $2.8 million of that.
St David Dairy was impacted financially in H2 FY22 from skills and labour shortages - causing the loss of some customers due to supply and delivery issues. Its general manager also recently resigned, with company chair Reg Weine stepping in for the short term.
Meanwhile, the launch of Paris Creek Farms branded milk was delayed due to flooding in New South Wales and Queensland. It has reached 200 stores this month and hopes to reach 400 by September.
The company said it was exploring all options and would update the market when it delivers its full year results.
