Maggie Beer Holdings has issued a profit warning as sales and earnings hit
The food and hamper business that owns the brand of the celebrated TV cook says its full-year earnings will take a big hit.
Maggie Beer Holdings, the food and hamper business named after the celebrated TV cook, says its full-year earnings will be hard hit by a slowing of consumer spending on gourmet foods, ingredients and gifts.
The ASX-listed Maggie Beer on Tuesday said rising interest rates and inflation were affecting consumer spending while higher energy, freight and labour costs were pressuring the business and would contribute to a large fall in profitability this year.
The business, built around popular cook Maggie Beer’s products as well as a recently acquired food hamper business, has flagged 2023 earnings before interest, taxes, depreciation and amortisation would likely more than halve to between $3.5m and $4.5m. This compared with EBITDA in 2022 of $11.3m.
For the half year, total revenue was at $49.9m, down from the previous corresponding period’s $52.3m result. For the year to the end of April revenue was $63.9m. Full-year revenue is expected to be between $70m and $75m, compared with $75.2m in 2022.
Shares in Maggie Beer fell 1c, or 6.45 per cent, to 14.5c – an all-time low. The shares are down 62 per cent in the past 12 months.
The company said demand for Maggie Beer-branded products stayed strong in the second half, but gifts and hampers arm HGA’s sales fell in line with the broader e-commerce market weakness and a shift back to bricks-and-mortar retailing.
“This trend has continued into May with disappointing Mother’s Day sales in HGA leading to month to date sales 13.2 per cent lower than last year,” the company said.
This month, candles and fragrances retailer dusk also said that it had recorded a poor Mother’s Day trading.
Given the weak performance of the HGA business, its earnout hurdle has not been met, impacting Maggie Beer Holdings’ profit by $10m.
New chief executive Kinda Grange is reviewing the business and a final decision on the discontinued Paris Creek Farms arm is due by the end of June.
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