FivePointFour blames competition for voluntary administration, financiers, businessmen caught out

A Brisbane-based food delivery firm which rivals HelloFresh and Marley Spoon has plunged into administration. The failure looks to have caught out customers, senior businessmen and an equipment financier.

UPSTART Brisbane-based food business FivePointFour has blamed increasing competition in the meal-delivery business for plunging into administration.

The appointment of administrators to FivePointFour looks to have caught out customers, senior business figures and equipment financier Silver Chef.

It also follows legal battles for the company itself.

Registered in 2013 with founders including current director 29-year-old Ben Doolan, FivePointFour used social media stars to promote its supplied meals.

But administrator Ben Carson from Farnsworth Shephard was appointed on Thursday to its holding entity. Mr Carson told The Courier-Mail he was continuing to gather information but declined to take other questions.

FivePointFour tried to capture the Millennials market, arguing it could deliver pre-cooked meals five days a week that had “four key foundations” including being “low carb or good carb”.

Five Point Four founding director Ben Doolan. Picture: Peter Cronin

It was a 2016 winner of Brisbane’s Lord Mayor’s Business Awards, and was promoted partly by health fanatics or pop singers like Marlee Jaynne posting images of themselves in sporty outfits and hashtagging the company’s name. Programs such as the “Muscle Gain” plan started from $11.75 for a meal.

But the ABC first reported that customers had received emails last week saying “in the face of increasing competition and our cost to serve, we have made the really difficult decision to stop taking orders with immediate effect as of today”.

“For our customers with future prepaid orders, the customer-service team will be working diligently to process your refund and will be in touch with you over the coming days,” the email said.

Sources with knowledge of the organisation also blamed competition for the appointment of administrators.

Rivals in the meal sector alone include the likes of Marley Spoon and HelloFresh, while a recent study by consultancy IBISWorld into the online grocery sector said that “industry competition has risen over the past five years, with many players lowering prices to remain competitive”.

“Over the next five years, meal kits are expected to continue growing as a share of industry revenue, particularly as more players introduce meal kit options for consumers,” the IBISWorld study found.

Berlin-based HelloFresh’s Australian entity last posted financial results for calendar 2017, showing it earned a pre-tax and finance profits of $897,240 off $126 million in revenue. For 2016, it lost $5.5 million off $90.6 million in revenue.

Company searches with Five Point Four show that security over some assets is held by equipment financier Silver Chef, which leases items such as ovens to the food industry.

Other directors of the food firm since 2017 are NSW businessmen Rajeev Dhawan and Garry Sladden, a former chairman of property group Folkestone.

FivePointFour also suffered some internal struggles, with The Courier-Mail’s CityBeat column last year revealing it was suing in the District Court one former founding director Tamara Trentain and her marketing firm Mitara Empresa.

Ms Trentain and Mitara was defending the lawsuit, which had seen FivePointFour level allegations including that Ms Trentain had misused a corporate credit card.

The lawsuit is still listed in the courts.