A $40 million acquisition of Hampers & Gifts Australia (HGA) has been as sweet as pie for Barossa-based Maggie Beer Holdings (ASX: MBH), pushing up the company’s revenue and earnings during the December half.
MBH, which released its results for the December half today, says the company has “been transformed” following the acquisition “and is now a scalable, large, premium e-commerce business”.
Net sales increased by a whopping 133.8 per cent in the half, while earnings increased by $8 million to $9.8 million.
With the integration of HGA now successfully completed, MBH reports its net sales increased by 28.6 per cent on the prior corresponding period.
Maggie Beer Products (MBP), the eponymous retailer of gourmet ingredients and food, saw total net sales increase by 24.7 per cent, with e-commerce sales more than doubling (up 174 per cent) and its retail grocery sales rising by 9.7 per cent.
Meanwhile, the company’s Paris Creek Farms (PFC) business saw net sales drop by 12.3 per cent. However, excluding the private label business which MBH discontinued in March 2021, PCF sales grew by 9.3 per cent.
The company’s fourth brand, St David Dairy (SDD), grew despite COVID-19 challenges, with net sales rising by 7.6 per cent to $4.8 million.
“The first half saw the integration of HGA into the MBH Group completed successfully and on time, substantially diversifying our revenue and gross margin between e-commerce, grocery retail and food service, which has enabled us to deliver strong revenue and earnings growth in a very challenging market,” MBH CEO and managing director Chantale Millard said.
“The first half was continually challenged by persistent COVID-19 headwinds, which increased costs and disrupted international and national supply chains.
“As a group, we strategically invested in continuing to grow our sales and market share and invested in ensuring our e-commerce customers received a great on-line shopping experience and timely deliveries over Christmas. HGA’s exceptional net promoter score of 72.5 demonstrates that we have a superior value proposition and maintained our world class reputation for customer satisfaction.”
MBH says COVID-19 continued to cause disruption, particularly as it increased costs across the supply chain, including inbound freight, labour and outbound freight. It also negatively impacted sales to cafes and major grocery retailers due to staff shortages.
The company closed out the half with $23 million in cash, and operating cash flows increasing by $10.9 million on the prior corresponding period.
Looking forward, MBH says it is on track to meet its revenue guidance target of $100 million for FY22, noting EBITDA guidance is contingent on the abnormal costs and trading conditions experienced due to COVID-19.
Shares in MBH are up 2.54 per cent to $0.60 per share at 10.20am AEDT.
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