Maggie Beer foods continue to grow in company headwinds

Luxury Food manufacturer Maggie Beer Holdings is foreshadowing subdued results for FY24 with growth in sales of Maggie Beer branded foods offset by a decline in sales from its troubled Paris Creek Farms business.

The Barossa Valley company told investors that FY24 revenue would be slightly ahead of FY23 at around $89 million, with anticipated sales growth in Maggie Beer Products of eight percent and a one percent rise in sale from its Hampers and Gifts Australia (HGA) business.

Sales in Maggie Beer products continue to increase from category expansion in sauces, stocks and ice cream as well as building strong momentum in online sales, up 24 percent in 2H FY24 vs. 2H FY23.

While full year HGA sales are expected to be ahead of the prior year, sales in the second half were adversely impacted, reflecting lower discretionary spend and cost of living impacts across the wider market and a decrease in consumer demand for hampers.

Meanwhile Paris Creek Farm dairy sales were impacted by a lower-than-expected supply of organic milk.

Maggie Beer Holdings CEO Kinda Grange said: “We have been able to grow revenue, particularly in Maggie Beer Products, and we have implemented strategies to grow the corporate hamper business.

“While Group revenue has marginally increased, challenging market conditions have placed additional pressure on EBITDA.

“The deterioration in our (Paris Creek Farms) business has had a significant impact on the group’s financial results and we are undertaking an urgent review of this business.”

Gross margin in 2H FY24 is expected to be marginally lower than 2H FY23, and trading EBITDA for 2H FY24 will be lower than 2H FY23 as a result of lower volumes, inventory provisions and operational challenges.

Group Trading EBITDA for FY24 is expected to be marginally positive but below the Trading EBITDA of $3.2 million for FY23.

During 2H FY24, key initiatives, including price increases, SKU rationalisation, a reduction in the casual labour and introduction of AI driven Customer Service have been completed, which will assist in improving profitability in FY25.

Grange said: “We are implementing further cost reductions, streamlining the business and looking at all options to increase profitable revenue and build the Maggie Beer brand.

“While the market is challenging, our financial position remains strong with a net cash position and no bank debt which continues to support the business and assist in funding growth initiatives.

Picture: Maggie Beer