My Food Bag turns around, resumes dividend payments

My Food Bag has reported a turnaround in second-half earnings.

Meal kit firm My Food Bag (MFB) will resume paying dividends after a turnaround in its second-half earnings.

While the firm’s net profit was $6.0 million in the 2024 year to March, compared to $7.9m in 2023, the business achieved a second-half net profit of $3.5m compared to $2.0 million a year earlier, a 75 per cent improvement.

For the year, MFB’s revenue came to $162.2m, down 7.7 per cent.

The company’s annual earnings before interest, tax, depreciation and amortisation was $16.0m, down from $18.2m in 2023.

Bargain Box deliveries were up 19.5 per cent in the year.

Net debt debt fell by $3.5m to $11.8m.

The company announced an imputed final dividend of 0.5 cents per share.

MFB said the second-half turnaround demonstrated the success of the business’s cost-out initiatives and realignment of its “strategic pillars”, and its resilience in a difficult macro-economic environment.

The average order value was $129.54 across the year, marginally down from $130.11 in 2023.

Chairman Tony Carter said the financial year marked a successful transition for MFB’s business.

“The steps we took in early 2023 to realign aspects of our business to reflect trading conditions, capitalise on market opportunities and add value for our customers are working,” he said.

“Against the backdrop of a difficult macro-economic environment, we have transformed our operations, and the second half of the year has demonstrated that having stabilised and reset the business we can continue to grow profit,” Carter said.

Active customer numbers have remained relatively stable at 56,800 at the end of FY24, versus 57,500 at the end of 2023. Gross margin also remained stable at 48.5 per cent.

“We remain a profitable business with a strong brand and customer offer, and the ability to take a greater share of New Zealand’s online food market,” Carter said.

Chief executive Mark Winter said MFB had transformed its operations throughout the year.

“We have a broad range of meal kit and food solutions that sets us apart from our competitors, and building on the unique properties and proposition of each brand means we’re able to meet more specific customer needs and appeal to a wider audience,” he said.

Winter said market conditions would remain challenging in the year ahead.

“To counter this, we will invest further for the health and growth of our business, via four key priority areas: further strengthening our brand, continuing to improve convenience, building a seamless customer experience, and fuelling our offer with unique ready-made solutions,” he said.

Winter said he was encouraged by the start to 2025, with the first eight weeks of trading showing overall net sales and active customers (59,009) broadly in line with the prior year.

The board expects to continue to pay dividends in 2025.

MFB last traded at 12.4c, having fallen 31 per cent over the past 12 months.

Jamie Gray is an Auckland-based journalist, covering the financial markets and the primary sector. He joined the Herald in 2011.