Maggie Beer foods is facing rising costs

Maggie Beer, the famous cook’s label known for its quince pastes and Pheasant Farm Pate, has warned its costs are running out of control and must be slashed to safeguard profitability.

Retailer Maggie Beer is struggling with rising costs. Picture: Jack Fenby/TWAM

Maggie Beer Holdings, the ASX-listed commercial arm of the famous cook’s food creations, has warned soaring costs are eating into profit, forcing the company to cut costs and undertake a strategic review.

This will see some job losses among executives and head office and a move to simplify its operations that include the Maggie Beer brands, e-commerce sales and its food hamper business bought back in 2021.

Shares in Maggie Beer have fallen 90 per cent since 2022 to underline the poor investor sentiment around the stock which once promised to fill the nation’s supermarkets and pantries at home with Maggie Beer branded products, like quince paste and pate, banking on the success and love Australians have for the popular TV cook.

However, a series of missteps, poor trading conditions and a pullback in consumer spending, especially on some premium and gourmet foods, has crunched sales and profits for the publicly listed Maggie Beer Holdings, with current management now concerned about spiralling costs.

In a trading update to the market on Wednesday, chairman Sue Thomas said increased sales for the first half had been offset by ongoing operating costs, with the board now forced to act to rein in the cost of doing business.

“Whilst we are pleased with the positive sales results to 31 December 2024, the trading period has only reinforced the board’s view that our cost of doing business remains too high. Whilst some cost increases are driven by factors outside of our direct control, the board review has highlighted that we can and need to materially cut our cost of doing business.”

The trading update reported that sales for the December half would be up by between 5.5 per cent and 6 per cent, while earnings from continuing operations would be down by 7 per cent to 8 per cent. It would end the half with roughly $11m in cash.

Rising costs at the same time of a cost-of-living crisis has crippled Maggie Beer Holdings’ sales and earnings for the last number of years, and a new focus on slashing costs would see some job losses.

“Addressing those costs is the first stage of returning the company to consistent profitability,” Ms Thomas said.

“In the second-half, Maggie Beer Holdings will therefore simplify its operations and administration through streamlining its structure, reducing senior executive roles and head office headcount.”

As part of a restructure, divisional heads will be appointed to its hampers e-commerce operations and Maggie Beer products, with each responsible for cost management, profit and strategy, reporting directly to the board, Ms Thomas said.

Maggie Beer Holdings directors would also take a more hands-on approach to reviving the company’s fortunes. Director Tom Kiing has agreed to step into an executive role to oversee the transition and identify and implement cost savings for the e-commerce business. He will also head the search for a future head of this division. Recently appointed Director Mark Lindh will lead the search to recruit the head of Maggie Beer products and will assist in running the business in the interim.

The company also said the sale process for its Paris Creek Farms division was progressing, and a number of interested parties are currently in the data room.

Originally published as Maggie Beer foods is facing rising costs