Lockdown lifts Youfoodz

Youfoodz has reported robust second quarter growth and confirmed its prospectus forecasts.

Lance Giles, Youfoodz chief executive - Photo Supplied

Consumers locked down in their homes, time poor households looking for a ready made meal and the flourishing growth of the home delivery meals sector has propelled sales for recently listed Youfoodz which has reported robust second quarter growth and confirmed its prospectus forecasts.

Youfoodz said on Monday it will hit its forecasts of $149.9 million in revenue for fiscal 2021 and a pre-tax profit of $500,000 although it will still produce a net loss of around $600,000 for the year as stated in its Christmas prospectus.

The bullish outlook and confirmation it would hit prospectus forecasts sent Youfoodz shares rallying 16 per cent to a two month high.

Youfoodz said in an ASX statement on Monday that key headline metrics showed continued substantial growth during the second quarter, notwithstanding the continued economic and social impact of the COVID-19 pandemic, including B2C demand volatility and raw material and service cost fluctuations.

“Youfoodz has been able to successfully manage these market-wide occurrences and anticipates the COVID-19 pandemic may continue to have unpredictable impacts across the industry,” the company said.

During the second quarter, the meal kits business produced over 4.8 million meals, up 28 per cent, generated gross revenues of $50.6m, up 26.8 per cent and net revenues of $36.7m, up 25.4 per cent.

“On a quarter-on-quarter basis, it was extremely pleasing that gross revenue for the second quarter (a quarter which is seasonally affected and historically has experienced significantly softer volumes due to the traditional holiday period) was up 2.3 per cent on the equivalent figure in the first quarter.

This translated into first half gross revenues of $100m, up 16.5 per cent, which is consistent with prospectus forecasts.

B2C (Home Delivery) remained the key contributor to growth for the period, with new customers being acquired at record levels resulting in a significant uplift in gross revenue. Sales through the B2B (Wholesale) channel continue to be constrained, reflecting in large part the ongoing impact of the COVID-19 pandemic on customer behaviour and shopping trends.

In the second quarter over 4.8 million meals were prepared (across both B2C and B2B), up 28 per cent, while B2C (home delivery) orders were up 45.8 per cent.

Youfoodz chief executive Lance Giles said the latest quarterly results include record growth in certain key areas despite ongoing uncertainty associated with the COVID-19 pandemic.

“During the period, we implemented a range of operational and marketing initiatives that have not only supported growth during the quarter but also ideally position the business as we aim to continually improve the way we service our existing customers and attract new customers.

“The remainder of fiscal 2021 will be a busy time for Youfoodz as we continue to deliver on our IPO objectives for the business, including continued development of the subscription offering to further improve retention, the launch of new products as part of strategy to broaden menu choice, the launch of the airline frequent flyer partnership and achieving significant milestones towards delivery of Youfoodz’ new facility.

Shares in Youfoodz were offered at an IPO price of $1.50 each. The stock closed on Monday up 16c, or 16.08 per cent, at $1.115.