Pandemic, inflation woes dent My Food Bag earnings
AUCKLAND: My Food Bag had a more sluggish start to trading than expected this financial year, with Omicron blamed for supply and delivery hiccups.
In a trading update yesterday, the company said deliveries were down 3.8% compared with the end of July last year.
However, active customer numbers had recovered from the start of the year to reach 73,145, slightly ahead of 72,105 a year earlier.
In a trading update back in January, the company said it was preparing for a likely surge in community Omicron cases.
But yesterday’s FY23 update showed the highly infectious Covid19 strain caused major disruption anyway.
My Food Bag said Omicron had hurt supplyside confidence this year as the company and suppliers struggled with incomplete and late deliveries.
‘‘My Food Bag responded to these challenges at the time by further simplifying its product offering and reducing marketing activity, which had the effect of a slower start to FY23,’’ it added.
Inflation and a broader, nationwide economic malaise were also affecting business.
The company said pressure on domestic budgets led to a stronger Bargain Box performance in its brand portfolio.
However, that boost to Bargain Box and a tendency for financially strained consumers to opt for smaller bags negatively affected earnings.
At the end of last month, My Food Bag revenue was up 2.5% but earnings before interest, taxes, depreciation, and amortisation (ebitda) shrank by about 8.5% compared with the same time last year.
My Food Bag said it was working on increasing customer order frequency and had launched a loyalty campaign.
‘‘Cost pressures stemming from overarching inflation and weather events continue to be managed through price increases and ingredient substitution where possible,’’ it added.
Due to lower earnings performance and the expected effects of ongoing economic challenges, fullyear earnings were anticipated to be less than in the 2022 financial year.
In its annual results in May, the firm said it delivered more than 18 million meals across FY22.
In its 2022 annual report, My Food Bag said it achieved record revenue of $194 million and delivered in line with forecasts.
My Food Bag listed last year. Its cofounders were Theresa Gattung, Cecilia and James Robinson, and another couple, Nadia Lim and Carlos Bagrie.
This year, the firm and some of its prominent figures have frequently been in the spotlight.
Ms Lim and Mr Bagrie have been working on a new television show about farming.
The couple farm at a 485ha Central Otago sheep and barley farm on the Crown Range.
The programme would air from the end of October, Ms Lim told The Country’s Jamie Mackay.
And richlister Simon Henry drew outrage in May after he derided Lim’s minor photo part in an earlier My Food Bag sharemarket listing prospectus.
Mr Henry infamously told NBR, ‘‘When you’ve got Nadia Lim, when you’ve got a little bit of Eurasian fluff in the middle of your prospectus with a blouse unbuttoned showing some cleavage, and that’s what it takes to sell your scrip, then you know you’re in trouble.’’
A news and social media firestorm erupted afterwards, Mr Henry accused of misogyny.
His personal holding in DGL Group plunged nearly $140 million in five days. —