MFB - My Food Bag

[winner69]

Just for fun I decided to run an exercise for the assumption of cost savings and benefits we could expect from the upcoming financial report.

Expense reducing factors underpinning upcoming results:

Lower vegetable cost as much as 25% lower in some months compared to prior years. If we conservatively assume 15% savings on vegetables over the period and assume out of $63m cost (on $70m revenue) that 1/3 is vegetable cost, we’d have a saving of $3.15m from a similar time last financial year.
Savings $3.15m

New pick technology enables reduced overall labour needed to assemble meal kits. Last reported half year only saw 4 months benefit, while upcoming results see full benefits from this technology.
Conservatively likely no addition savings, just efficiencies to add more recipes

Highbrook assembly centre closed at the end of September 2023, meaning we will see the savings in the upcoming financials of up to $500k since leasing cost was about $1m per year.
Savings $500k

Additional sales from new offerings like ‘The Butcher’ and ‘BBQ Box’ will help add to declining sales and maintain active customer interest during the summer period when sales are usually lower. Due to the short period of the offering profit contribution may be low.
Profit contribution $150k

Reduced debt will reduce financial costs, last report net debt was $14m, which was reduced from $15m, with financial cost of the last reported half year at $1m, which might suggest interest on their loan could be as high as 13-14%. With less capital expenditure and lease cost more capital is available to repay debt. Net debt should be able to reduce by $2m to $12m net debt, saving around $200k since repayment happens throughout the 6 months and not at the beginning so full savings is not likely.
Savings $200k

Total savings $3.85m + added profit $150k = $4m

Conservatively if assume $2m of that is added to the bottom line, which after tax would be $1.44 NPAT, add that to 2H FY23 of $2m NPAT, we end up with $3.44m NPAT and within my expected range, however I would not be disappointed if they exceeded that.

*Factors that would cut into the savings are increased cost observed in meat and sauces, employee wages, current lease sites and potential increase in interest rates over the period.

Good stuff sb ….but you seem to have missed that without those savings they would have made $Xm anyway in H2…would that mean full year would be $2.5m (H1) plus $Xm plus savings $1.44m? …more than $3.44m

My expectation is something about $5m …. Bearing in mind that H223 plus H123 is $4.5m ….a rolling 12 month number and you’d think it would higher this time round eh.

You seem pretty eager to getting a bargain here eh …..we’ll see what eventuates eh

[silverblizzard888]

Good stuff sb ….but you seem to have missed that without those savings they would have made $Xm anyway in H2…would that mean full year would be $2.5m (H1) plus $Xm plus savings $1.44m? …more than $3.44m

My expectation is something about $5m …. Bearing in mind that H223 plus H123 is $4.5m ….a rolling 12 month number and you’d think it would higher this time round eh.

You seem pretty eager to getting a bargain here eh …..we’ll see what eventuates eh

My base was working from H2 FY23 which was $2m NPAT and then adding back in the savings minus tax of $1.44m, giving me $3.44m NPAT for the 6 months. Add that to H1 Fy24 of $2.5m, the overall NPAT for FY24 would be $5.94m NPAT

[winner69]

My base was working from H2 FY23 which was $2m NPAT and then adding back in the savings minus tax of $1.44m, giving me $3.44m NPAT for the 6 months. Add that to H1 Fy24 of $2.5m, the overall NPAT for FY24 would be $5.94m NPAT

I understand now ….makes sense

Full Year $6m would be a good result …..and market hopefully would see it as such

[silverblizzard888]

Having seen how aggressive Hellofresh is marketing themselves lately, I think it might just be the reason MFB is keeping quiet about their performance, so that they don't give too much to their competitors. By the time they announce their results the data will have been two months old and less likely used against them.

[nztx]

Having seen how aggressive Hellofresh is marketing themselves lately, I think it might just be the reason MFB is keeping quiet about their performance, so that they don't give too much to their competitors. By the time they announce their results the data will have been two months old and less likely used against them.

How about the "keeping the market informed' responsibility under NZX listing rules ?

Surely a few positive vibes tossed about, like in past years (Feb-Mar) rather than a big fat no show wouldn't go astray & draw in a bit of confidence ?

If anything, the competition would be confused & may get a headache or two out of it ..

[carrom74]

The trading pattern over few weeks looks as if there is a deliberate attempt to keep the sp down.But it could also be no news coming out from the company- it’s 5 months and literally nothing.SB is right on HF.. but the last update in Nov was also wishy washy… Popcorn time soon!

[Baa_Baa]

The trading pattern over few weeks looks as if there is a deliberate attempt to keep the sp down.But it could also be no news coming out from the company- it’s 5 months and literally nothing.SB is right on HF.. but the last update in Nov was also wishy washy… Popcorn time soon!

This MFB has literally been an abject lesson in why small companies with greedy founding investors IPO on NZX. There was absolutely no purpose whatsoever for listing, other than the founding money exiting at massively inflated valuations, to make them rich. And, guess what, those founders were oh so successful at doing it, sucking the money in from new entrants including clients and staff. Disgraceful and it was noted here well before the IPO occurred.

Now what we have left is virtually a shell of its former self, probably appropriately valued by the market at massive multiples less than the founders contrived IPO exit. NZX should hold its head in shame for facilitating this robbery.

My assessment of company value (and SP) many many month ago appears to be almost correct except the SP is a cent lower at the moment. I don't think this will ever get back to anywhere near close to the IPO exit SP.

[bulltrap]

A change in my circumstances has enabled me to try 'dog fooding' the MFB product and also HelloFresh for comparison. I had assumed they coexist as a duopoly, with similar products and pricing. I'm now questioning that viewpoint.

In my second week of MFB currently, I've been impressed with the quality of the ingredients, the nutritional balance, the variety and ease of preparation. Nice job.

My #1 gripe here is there's no way to flag dietary restrictions, and I've had to hand off some kits that contained verboten ingredients. Partly my fault, but from reading reviews it's a common complaint. Fix that pronto.

For the next week I'm trying HelloFresh, and my immediate impression on sign-up is that they are desperate scumbags. I'm happy to go into details, but I'm sure we've all encountered desperate scumbags and have some idea of how they operate. My first order will be my last, even if the food turns up and turns out OK.

My revised view of these two is that MFB is the better company/product, and should be the ultimate benefactor of HelloFresh's combo of aggressive marketing and terrible service.

While as a shareholder I'd still welcome a takeover bid to end my suffering, as a customer and a patriot I'd find it tragic to have this home-grown success story assimilated into an evil multinational.

[billkiapi]

This MFB has literally been an abject lesson in why small companies with greedy founding investors IPO on NZX. There was absolutely no purpose whatsoever for listing, other than the founding money exiting at massively inflated valuations, to make them rich. And, guess what, those founders were oh so successful at doing it, sucking the money in from new entrants including clients and staff. Disgraceful and it was noted here well before the IPO occurred.

Now what we have left is virtually a shell of its former self, probably appropriately valued by the market at massive multiples less than the founders contrived IPO exit. NZX should hold its head in shame for facilitating this robbery.

My assessment of company value (and SP) many many month ago appears to be almost correct except the SP is a cent lower at the moment. I don't think this will ever get back to anywhere near close to the IPO exit SP.

You are saying exactly what I was thinking- doesn't speak well of new IPOs in the future after these deals are founder friendly and not shareholder friendly in the end.

[blackcap]

You are saying exactly what I was thinking- doesn't speak well of new IPOs in the future after these deals are founder friendly and not shareholder friendly in the end.

THey are founder friendly, only in so much that new shareholders accept the "BS" of the IPO. If new shareholders did DD and did not purchase any IPO shares then these IPO's would have to lower their entry point. I guess its the gullible, and brokers willing to flog off to the gullible that allow for this to happen.

Back in 4th form economics we were taught "Caveat Emptor". I guess that is not taught at schools anymore?