Maggie Beer to sell dairy business after posting major loss
Maggie Beer Holdings has appointed advisors to sell its dairy business after a “very challenging year” which saw losses of more than $28 million.
Paris Creek Farms will be sold by Maggie Beer Holdings after it dragged down the company’s overall net sales and attracted a multi-million dollar impairment in FY24.
Announced today, the Adelaide-based listed company said its full-year losses were $28.2 million, down from a $462,000 profit in the prior year.
It follows a nearly $6 million loss for the business in the first half of the financial year, driven by an impairment to the Paris Creek Farms business.
Group revenue rose by 0.8 per cent, but impairments to the goodwill of its Hampers and Gifts Australia business of $13.8 million, a $4.4 million impairment to Paris Creek Farms, $2.6 million in legal fees and other costs weighed heavily on the bottom line.
Speaking to shareholders this morning, newly appointed Maggie Beer Holdings COO and CFO Penny Diamantakiou said the planned divestment of Paris Creek Farms – a South Australian bio-dynamic organic dairy outfit – would refocus the cost base of the company.
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She said the company would move into its “next evolution” during FY25 to become “Australia’s leading purveyor of premium food and gifting products”.
“We own one of Australia’s most iconic premium food brands and one of Australia’s leading e-comm gifting businesses and brands,” she said.
“We have powerful digital assets and capability across the organisation, underpinned by our exceptional infrastructure.”
The company hopes to achieve its goals by focusing on building e-commerce scale and prioritising seasonal events like Christmas with tailored new product lines to launch in FY25.
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By doing this, the company hopes to return to profitability. The outfit will be leaner without Paris Creek Farms which saw net sales fall by 9.5 per cent in FY25 due to lower milk supply.
The company achieved $89.4 million in net sales during the year, up 0.8 per cent on the prior year, with the Maggie Beer Products brand outperforming the company’s other assets with 6.3 per cent sales growth driven by category expansion in retail and positive momentum in online sales.
Hampers and Gifts Australia net sales were up 0.7 per cent, with the Christmas period delivering 8 per cent sales growth in the second quarter.
Earnings were just $300,000 in FY24 – down from $3.2 million the prior year – reflecting earnings losses from Paris Creek Farms.
The company has no debt and $4.7 million in cash on hand as of 30 June.
Alongside the new appointment of Diamantakiou, who took over from Craig Louttit, the company announced in July that CEO Kinda Grange had resigned, just 16 months into the job.
Chair Sue Thomas said the company had “an absolute focus on returning the business to profitability, and capitalising on our two great assets: an iconic Australian brand and a leading online gifting business”, but struggled during a “very challenging year”.
“These assets will enable the delivery of our vision to become Australia’s leading purveyor of premium food and gifting products,” she said.
“The foundations implemented during FY24 will assist the group with a strengthened platform into FY25.
“We are focused on further reducing the company’s cost base, ensuring that we maintain margins and optimise operations to return the business to profitability in FY25. We have commenced this process and have identified significant areas of savings.”
Shares in MBH are up 1.52 per cent to $0.067 per share in early trade today.
