I am new the company and don't live in NZ so trying to develop my understanding.
Typically I view these companies as Covid beneficiaries whereby they were flogged in an IPO to retailers (AU text-book example) before the inevitable drop-off.
But actually MFB was profitable in FY17 and grew revenue and profitability in subsequent years.
What has happened here?
NZ floods haven't helped presumably but how much is that impact?
Hi Pablo, the trend in profits has been down since not long after listing but they have always been profitable since listing. The company's balance sheet had a lot of goodwill which promoters believed justified the IPO price and they were able to get it away at $1.85.
If there are future impairments to goodwill or brands then the profits will be down accordingly. Something for which to watch out.
There has been increased competition from such companies as Hello Fresh and other entries to the market. The floods will affect the supply chain of ingredients as costs to the company will rise.
The floods were particularly bad in one of the main fruit and vegetable growing areas (Hawke's Bay).
There has also been a change in purchasing habits as New Zealand's economy slows down partly due to higher interest rates. People are substituting the cheaper MFB offerings (which are less profitable for the company) for what they used to buy from them.
On the other side of the coin the company from all accounts sells a good set of products.
Thanks for the write-up.
I am new the company and don't live in NZ so trying to develop my understanding.
Typically I view these companies as Covid beneficiaries whereby they were flogged in an IPO to retailers (AU text-book example) before the inevitable drop-off.
But actually MFB was profitable in FY17 and grew revenue and profitability in subsequent years.
What has happened here?
NZ floods haven't helped presumably but how much is that impact?
Is it competition?
Or are people changing their habits?
Hi Pablo, the trend in profits has been down since not long after listing but they have always been profitable since listing. The company's balance sheet had a lot of goodwill which promoters believed justified the IPO price and they were able to get it away at $1.85.
If there are future impairments to goodwill or brands then the profits will be down accordingly. Something for which to watch out.
There has been increased competition from such companies as Hello Fresh and other entries to the market. The floods will affect the supply chain of ingredients as costs to the company will rise.
The floods were particularly bad in one of the main fruit and vegetable growing areas (Hawke's Bay).
There has also been a change in purchasing habits as New Zealand's economy slows down partly due to higher interest rates. People are substituting the cheaper MFB offerings (which are less profitable for the company) for what they used to buy from them.
On the other side of the coin the company from all accounts sells a good set of products.