Despite aggressive marketing strategies and advertising, premium food business Maggie Beer (ASX: MBH) failed to catch people’s fancy in H1 FY23 as its net sales fell 4.5% to $49.9 million. While retail did okay, its online segment struggled to keep up.
Fewer Aussies visited its website as people are now departing from the online shopping trend and stepping into stores. Online sales fell by about 7% as retail sales grew by a mere 1%. Undeterred, the Company continued investing into its e-commerce channels, increasing investment into its subsidiary, Hampers & Gifts Australia, by nearly 40%.
CEO Chantale Millard commented, “Against a challenging and changing economic environment, the MBH group has performed strongly for the first half of FY23. The Group has been investing in our brands and has some exciting new products launching in H2 FY23, which are aligned to the trend of people returning to home cooking and entertaining as discretionary spending slows.”
In Q2 FY23, the Company’s net sales were up 4.3%, as retail sales increased by 4.6% and e-commerce by 4.2%, thanks to the Christmas shopping boost. Plus, it appears that Maggie Beer’s customers are all about home entertaining and cooking as the launch of its chilled range of cheese and entertaining hampers in March 2022 has proven to be very successful with over $2.2 million in net sales in H1 FY23.
Its earnings amounted to $5.6 million bolstered by a profit of $7.2 million. With cash of $17.4 million in hand and no debt as of H1 FY23, the Company considers itself poised for profitability in the coming year.
And to create a safety net for profits, it plans on launching five new innovative cooking products nationally in a major grocery retailer in April 2023. Within e-commerce, it will launch the new “Maggie’s Living”, which will also be in some retail stores for Mother’s Day.
Millard added, “MBH now has a solid foundation in place, ready for its next phase of growth, which can be funded by the Group’s strong cash flows and balance sheet. Based on our confidence in our business model, the Board has announced the commencement of its dividend program with a fully franked dividend of half a cent per share. This dividend is intended to reward our shareholders whilst still providing balance sheet flexibility to support the growth initiatives and ambition of the incoming CEO.”
Its discontinued operations, i.e. Paris Creek Farms, continue to perform according to expectations. A final decision in relation to Paris Creek Farms is expected to be made by the Board and the incoming CEO in H2 FY23.
With more people saying cheese for Maggie Beer, it has decided to launch two new products to take advantage of its popularity. This includes two new 1L Cooking Stocks and three Finishing Sauces. Plus, it will launch two new non-alcoholic sparkling drinks, a Sparkling Moscato and a Sparkling Prosecco, in addition to its existing non-alcoholic sparkling range. It will also be launching an innovative new fruit paste and vegetarian pate for Easter.
Besides the new products, the Company will also be gaining a new CEO starting March 1: Kinda Grange, formerly the Managing Director of regional food company Goodman Fielder.
For the coming year, Maggie Beer’s plan is to tap into festive demand and keep going at its ecommerce strategy. But with home cooking and online shopping taking a backseat, it will be interesting to see how well this strategy works.
Alinda is a Business Reporter for The Sentiment
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