Profit warning on Beer Holdings

Maggie Beer Holdings, the food and hamper business named after the celebrated TV cook, has admitted its full-year earnings will take a massive hit from slowing consumer spending on gourmet foods, ingredients and gifts as rising interest rates and other cost of living pressures crunches household budgets.

The ASX-listed Maggie Beer said on Tuesday that rising interest rates and inflation are impacting consumer spending while higher energy, freight and labour costs were pressuring the business and would contribute to a large fall in profitability this year.

The business, built around popular cook Maggie Beer’s products as well as a recently acquired food hamper business, has flagged 2023 earnings before interest, taxes, depreciation and amortisation would likely more than halve to between $3.5m and $4.5m. This compared to EBITDA in 2022 of $11.3m.

For the half year, total revenue was at $49.9m, down from the prior corresponding period‘s $52.3m result. For the year to April end, revenue was $63.9m. Full year revenue is expected to be between $70m and $75m, compared to $75.2m in 2022. Shares in Maggie Beer fell 1c, or 6.45 per cent, to 14.5c – an all-time low. The shares are down 62 per cent in the last 12 months.

The company said demand for Maggie Beer-branded products held strong in the second half, but gifts and hampers arm HGA‘s sales fell in line with the broader e-commerce market weakness and a shift back to bricks and mortar retailing. This month candles and fragrances retailer dusk also said that it had recorded a poor Mother’s Day trading.

New chief executive Kinda Grange is also reviewing the business and a final decision on the discontinued Paris Creek Farms arm is due by end June.