Login | Register
Profile | Log out
logo

  • Home
  • News
  • Opinion
  • Other
    • Market Updates
    • Explainers
    • Satire
  • About
  • Contact Us
    • Contact
    • Get Covered
    • Posting Guidelines
  • Subscribe
Submit An Article

Latest Articles

  • Biotron Expands into Anaesthetics with Sedarex Acquisition and $2.5m Raise
    Biotron Expands into Anaesthetics with Sedarex Acquisition and $2.5m Raise
    • News

  • DroneShield Boosts Defence Capability with $13 Million Adelaide R&D Investment
    DroneShield Boosts Defence Capability with $13 Million Adelaide R&D Investment
    • News

  • Stakk Secures T-Mobile Contract to Power Super App Expansion
    Stakk Secures T-Mobile Contract to Power Super App Expansion
    • News

  • Medibank Backs Emyria with Landmark Depression Care Deal
    Medibank Backs Emyria with Landmark Depression Care Deal
    • News

  • NoviqTech Launches Quantum Intelligence Products, Opening Path to Enterprise-Grade Quantum AI
    NoviqTech Launches Quantum Intelligence Products, Opening Path to Enterprise-Grade Quantum AI
    • News

  • BRE Wins Final Permit to Advance Rare Earth Pilot Plant in Brazil
    BRE Wins Final Permit to Advance Rare Earth Pilot Plant in Brazil
    • News

  • Harris Technology eyes profitability as refurbished tech sales surge
    Harris Technology eyes profitability as refurbished tech sales surge
    • News

  • QIC Fund Backs Ark Mines with $4.5m to Accelerate Sandy Mitchell Development
    • News

  • Swift Secures $2.4m Chevron Contract to Extend Entertainment and Support Services
    Swift Secures $2.4m Chevron Contract to Extend Entertainment and Support Services
    • News

  • FBR’s tech could help reduce housing construction-related cost pressures
    FBR’s tech could help reduce housing construction-related cost pressures
    • News

My Food Bag earnings fall as customers deal with inflationary pressures

  • In News
  • February 17, 2023
  • Alinda Gupta
My Food Bag earnings fall as customers deal with inflationary pressures

Aussies just haven’t got the time and energy to work around a planned meal kit, and that’s not ending well for meal kit delivery services like My Food Bag (ASX: MFB), with its earnings down nearly 40%.

At the end of January 2023, deliveries were down 11.8% compared to last year. Revenue was down 8.0%, and EBITDA was down 39.2%. As the Company grapples with growing inflation, lowering demand and cost-cutting within households, its EBITDA guidance for FY23 amounts to between $17 million and $19 million. During Covid, its earnings were over $30 million, for perspective. 

Recently appointed My Food Bag CEO, Mark Winter, commented, “Trading in FY23 has remained challenging, with inflationary pressure on households and low consumer confidence resulting in more subdued demand. These challenges have continued through the traditional “win back” period following the summer holidays, with lower than forecast trading continuing since the two recent long weekends.”

The Company has to adjust costs to stay in the game. It is proactively managing input cost pressures and ingredient supply challenges to keep its product offerings attractive and gross margin levels remain strong. 

Winter added, “Within our brand portfolio, we have seen Bargain Box (our lowest cost brand) perform relatively strongly in this environment. While this has had an unfavourable impact on brand mix from an earnings perspective, we have seen the contribution from our growing range in the My Food Bag Kitchen continuing to support average order value.”

On the automation front, My Food Bag’s investment in pick technology at a significant Auckland assembly facility is complete. It is expected to be commissioned and go live in the coming weeks. It plans on rolling out the same pick technology at our Christchurch facility in May 2023.  

The Chairman of My Food Bag, Tony Carter, paints a more optimistic picture of the ongoing financials. Though he admits that it might be disappointing, plenty of silver linings exist. “My Food Bag remains a profitable Kiwi business, has low debt levels and continues to generate positive cash flow. The business continues to progress strategic initiatives in order to pursue growth. Our investment in pick technology will deliver a material reduction in operating costs when fully commissioned,” he noted.  

This optimism is mellowed by the impact of Cyclone Gabrielle in the North Islands, New Zealand. Winter added, “While our facilities continue to operate as normal, we expect some additional challenges and cost as a result of disruption to deliveries to the worst affected regions, and from the impact on our suppliers.”

Amid declining profits and ongoing challenges, the Company has shifted priorities and even renewed its board. In September 2022, its ex-CEO Kevin Bowler resigned overnight as CFO Mark Winter replaced him as CEO, officially in November. The Company also appointed a new CFO, Leanne Dekker, to start in March 2023.   

In 1H FY23, the Company’s net profit was $5.9 million, down over $3 million on 1H FY22. Since Covid subsiding, My Food Bag has transitioned to My Futile Bag. As it shifts focus to automation and discounts, will the Company be able to return to its Covid-like glory days, or is this the end of the meal kit delivery boom?

  • About
  • Latest Posts
Alinda Gupta
Alinda is a Business Reporter for The Sentiment
Latest posts by Alinda Gupta (see all)
  • Ovanti’s iSentric signs contracts worth $14.4m with Malaysian commercial bank - June 27, 2024
  • Baby Bunting fights back from retail downturn with 5-year strategy, includes Gen-Z focus and self-funded growth - June 27, 2024
  • CLEO meets with US FDA to develop strategy for ovarian cancer test launch - June 26, 2024
  •  
  •  
  •  
  •  
  • asx mfb
  • bargain box
  • kevin bowler
  • mfb
  • my food bag
  • News

Leave a Comment

You must be logged in to post a comment.

  • About
  • Latest Posts
Alinda Gupta
Alinda is a Business Reporter for The Sentiment
Latest posts by Alinda Gupta (see all)
  • Ovanti’s iSentric signs contracts worth $14.4m with Malaysian commercial bank - June 27, 2024
  • Baby Bunting fights back from retail downturn with 5-year strategy, includes Gen-Z focus and self-funded growth - June 27, 2024
  • CLEO meets with US FDA to develop strategy for ovarian cancer test launch - June 26, 2024

Login or register for free to access unlimited reading

Register Now!
  • About
  • Latest Posts
Alinda Gupta
Alinda is a Business Reporter for The Sentiment
Latest posts by Alinda Gupta (see all)
  • Ovanti’s iSentric signs contracts worth $14.4m with Malaysian commercial bank - June 27, 2024
  • Baby Bunting fights back from retail downturn with 5-year strategy, includes Gen-Z focus and self-funded growth - June 27, 2024
  • CLEO meets with US FDA to develop strategy for ovarian cancer test launch - June 26, 2024
  • News

  • Opinion

  • Satire

  • About

  • Contact Us

  • Subscribe

The content published on this website is solely for general information purposes and is not to be construed as financial advice. Should you seek financial advice you should consult with an appropriately qualified person. Opinions expressed on this site are subject to change without notice and The Sentiment who produced this content is under no obligation to keep the information current. The Sentiment, affiliated companies & associates may have a conflict of interest with companies discussed on the website due to commercial arrangements, for example they may be shareholders in the company, be engaged by them to assist in investor communications or receive commission/brokerage for funds raised.

Copyright © 2020 The Sentiment. All rights reserved.
Subscribe

Enter your email address below to subscribe to The Sentiment’s weekly newsletter, highlighting the top news, research, opinion and satire articles shaping ASX investor sentiment.

The Sentiment respects your privacy and will not spam you. View our privacy policy here.