Me Today to raise funds after reporting $17.8m loss

Honey, supplements and skin care company Me Today wants to raise funds after reporting a $17.8m loss. Photo / File

NZX-listed manuka honey, supplements and skincare company Me Today said it intended to raise capital after impairments helped drive it to a $17.8m net loss for the March year.

The result included nine months trading of the King Honey business since its acquisition on June 30, 2021, together with 12 months' trading from other members of the Me Today group.

Me Today has changed its balance date and will prepare audited financial statements for the 15-month period ending June 30, 2022, to be released to the market by August 30 this year.

The result for the group records net sales of $7.22m and an operating loss before tax of $5.89m.

In addition to operating losses, the group has incurred extraordinary non-cash items of $11.92m.

The extraordinary items include an impairment of $9.9m of the goodwill recognised on acquisition of the King Honey business.

Last September the company said sales by the King Honey business would be significantly lower than expected.

Sales revenue continued to be challenging, which had created cashflow pressure.

The King Honey business has had a successful harvest, with 380 tonnes of honey produced in the 2022 season just completed.

In addition, King Honey has 265 tonnes of Honey available from the 2020 and 2021 seasons.

"With the significant volume of honey stocks, the group has made the decision to downsize its beekeeping operations and reduce the cashflow draw created by the next season's harvest," the company said.

A decision has been made to close the Kaitaia, Kerikeri and Blenheim beekeeping operations.

The group will continue to review all aspects of the King Honey business to ensure the cost structure is sized right for sustainable growth.

"To enable continued investment in brands, and to take advantage of international opportunities, the Me Today board has agreed to undertake a pro rata capital raise of up to $10m through a rights issue of 1.3 new shares for every one share existing held at an issue price of one cent per new share," it said.

Shares in Me Today last traded at 2.8c, having dropped by 76 per cent over the last 12 months.

The company's largest shareholder, MTL Securities Limited, has agreed to apply for $4.2m of new shares.

The operating EBITDA loss for the group was $4.27m.

The company is chaired by Grant Baker, a co-founder of the once-listed skincare company Trilogy and Vodka company 42 Below before that.

In 2018, Trilogy was sold to Citic Capital China Partners for $203m or $2.90 a share - a 28 per cent premium to its market price.

Me Today is the result of a reverse takeover by the former scrap metal company CSM - which was listed on the now-defunct junior board, the NZAX.

Backdoor listings such as the one employed by Me Today are sought because they don't require a prospectus and are cheaper than a standard listing on the NZX.

CSM started trading as Me Today in late March, 2020, amid the market chaos arising from the pandemic.