My Food Bag falls as energy retailers rise

Meal kit company My Food Bag's shares fell 15.5% today but thanks to energy companies like Mercury, Contact, and Meridian having a good day, New Zealand’s market still ended the day in positive territory.

Friday, November 18th 2022, 6:03PM

by BusinessDesk

The S&P/NZX 50 Index rose 86.1 points or 0.76%, to 11,380.61. Market turnover was $105.6 million.

My Food Bag revealed its weakest half-year result since 2020 today, with net profit for the six months ended Sept 30 plunging by 37% and revenue dropping by 4%.

The stock fell more than 16% immediately after the market opened this morning and by the end of the day was down 15.5% to 49 cents.

The company reported a net profit of $5.9m in the first half of its financial year, down from $9.4m the year before. Underlying earnings fell to $11.5m from $15.8m, and revenue was down $4m at $94.4m.

Grant Davies, an investment advisor at Hamilton Hindin Greene, told BusinessDesk that My Food Bag’s results were “obviously not a great update”.

“It’s a race to the bottom with some competition in that space also looking to gain market share while food prices are rising,” he said.

“It’s been pretty difficult operations for My Food Bag.”

Energy companies helped pull the market higher – Contact Energy was up 3.1% to $7.62, Mercury NZ jumped 4.1% to $5.66, and Meridian Energy was up 2.2% to $4.70. Bucking the trend was Genesis Energy down 1.8% to $2.705.

Fonterra Shareholders’ Fund Units rose 4% to $3.16 after the dairy co-op agreed to sell its Chilean business – Soprole – to Peru’s Gloria Foods for about $1.06 billion.

Chief executive Miles Hurrell said Soprole was a “very good business” but didn’t rely on NZ milk or expertise.

After A2 Milk’s annual meeting today, chair David Hearn stepped down from the board and director Pip Greenwood took over as chair.

A2 Milk was down 2.1% to $6.50 by the end of the day.

Metro Performance Glass shares were flat at 20.5 cents after NZ’s largest glass processor said it was initiating cost cuts in response to pressures affecting the construction sector.

This will include a comprehensive review of its organisational structure and manufacturing to target annual savings of $8m-to-$9m from the second half of the 2023 financial year.

Tourism Holdings (THL) and Apollo Tourism & Leisure are inching closer and closer to clinching their proposed merger after the Supreme Court of Queensland made orders today to approve the deal.

Now, the scheme only remains subject to the completion of $45m worth of Apollo’s assets to Jucy.

Today, THL was down 2% to $3.47.

Aged-care provider Ryman Healthcare fell 4.6% to $7.62 after its net profit for the six months ended September fell to $194m from $281.5m in the same six months last year.

Davies said while the result had been mostly expected by the market, the “big elephant in the room” was Ryman’s debt levels.

"It's going to constrain their ability to grow,” he said. “Although they had a pretty solid underlying profit figure, that debt did just creep up again.”

He said that Ryman's plans to raise capital with a dividend reinvestment scheme being put in place would keep more funds in the business was "a different approach from them.”

On the currency front, the NZ dollar traded at 61.40 US cents at 3pm in Wellington, the same as yesterday’s 61.40 cents.

Tags: Market Close