Tuesday, 21 Sep 2021

My Food Bag still benefiting from Covid alert level demand – CFO

Newly-listed meal kit company My Food Bag enjoyed a pick-up in demand during last year’s Covid-19 lockdowns.

Now that the country has returned to near normal, some of that interest has stuck, chief financial officer Mark Winter says.

“What we saw with Covid was a pull forward of demand,” he said.

“More New Zealanders looked to transition to purchase food online – under alert level four and to a lesser extent level three – which saw a real spike in demand,” he said.

As New Zealand started to come out of those extreme alert levels, some of that increased interest has stuck.

“There has been a step lift in terms of the level of demand for our product,” he said.

“It did come off a little bit as we came out of level four and level three.

“It certainly has not returned back to where it was, pre-Covid.”

My Food Bag’s shares, issued at $1.85, have lagged after listing in March.

This month, they traded at around the mid to high $1.30 mark.

Winter said management was mindful of the share price’s underperformance.

“From management’s perspective, it’s important to continue to focus on dealing with what we said we would do,” he said.

Winter reiterated the message given at the company’s latest result – that the company was trading in line with its prospectus forecasts.

Those forecasts are for revenue of $186.4m and a net profit of $20.1m for the year through to March 2022.

“We are tracking as expected.

“We have continued to get on and innovate with some of the things that we signalled at the full-year result,” he said.

In the midst of the pandemic, My Food Bag went live with a new enterprise resource planning (ERP) system that had resulted in big benefits for the business, he said.

My Food Bag says the system – by US cloud company Infor – gives it the edge in the $37 billion a year retail food market, where it competes with Germany’s Hello Fresh.

The new platform manages data within the business from the customer’s order being confirmed, through to purchasing ingredients and payments to suppliers.

“The business was eight-and-a-half years old and so we recognised two and a half years ago that to grow it was important to invest in a system that would integrate the business,” Winter said.

The the new system had acted to take staff away from manual work, had made its operations more robust and a bit more automated.

The system captures nutritional data as well as data on allergens, has removed errors and has produced productivity gains in terms of speeding things up, Winter said.

Separately, My Food Bag said Joanne Mitchell had been appointed to lead the company’s marketing team.

Mitchell, who has senior marketing roles at Kraft Foods in the UK, Charlie’s Drinks, McDonald’s Restaurants and, most recently, DB Heineken.

Richard Wafer, the company’s chief operating officer, had given notice of his decision to resign to pursue a new business interest outside of the food sector.

Wafer joined My Food Bag during its start-up phase and had played an integral role during the last seven years.

“Richard is committed to achieving a successful transition and, as such, his last day at My Food Bag has yet to be determined but is expected to be towards the end of 2021,” the company said.

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