Shares plunge 13.6%
Parsley Box ‘encouraged’ despite loss widening
Kevin Dorren with founder Adrienne MacAuley
Shares in Parsley Box, the Scottish direct to consumer ready meals firm, plummeted 13.6% after pre-tax losses widened to £5.4 million for the half year to the end of June, against a loss of £1.02m last year.
The company, which is backed by Scottish entrepreneur Chris van der Kuyl, said it was “encouraged” by progress as revenue grew 26% and active customers by 77%. There was a 38% growth in repeat orders and it is well-capitalised with net cash of £6.52m following its IPO in March.
However, prices are rising and, together with new products, are expected to deliver further growth. A recently launched new range of chilled meals has made an encouraging start with strong initial demand from existing customers adding chilled meals to their basket
Kevin Dorren, CEO of Parsley Box, commented: “This has been a highly rewarding period for the company, Parsley Box has achieved a great deal since our IPO in March 2021.
“The business is well capitalised and is using the opportunity to invest in new customers, product innovation and broadening our team as outlined in the run up to IPO.
“We have been successful in strengthening our team in the critical areas of innovation and IT positioning us well to deliver our goals in 2021 and beyond.
“The initial results of the investment in product innovation have been encouraging with the trial of chilled ready meals delivering an increase in customer basket size and lower new customer recruitment costs compared to our purely ambient offering.
“Delivering our initial product innovation plan has been well received by our customer base.
“The focus remains to deliver long term growth within the UK to achieve a sustainable, profitable business and a recognised brand for the Baby Boomer+ demographic.”
The shares closed 16.5p or 13.6% down at 105p against a year high of 205p soon after the IPO in March.
AJ Bell investment director Russ Mould said: “Direct-to-consumer ready meals group Parsley Box may be ‘encouraged’ by its first half performance but investors don’t seem to be as its losses widened in the six months to the end of June.
“Parsley Box delivers ready meals that don’t need to be stored in a fridge or freezer direct to the ‘Baby Boomer+’ demographic, so people aged 60 and over
“It’s an area with lots of existing competition and it is unclear exactly what marks the Parsley Box proposition out from other options.
“The company also saw the rate of new customer additions slow as pandemic restrictions were eased and its target market felt more confident about going out to eat.
“While Parsley Box is pleased with the response to its launch of chilled ready meals it is questionable whether this will really move the dial and there is a risk that as it looks to shift to higher price points it loses customer who are turned off by the increased cost.
“With the shares having nearly halved on the 200p at which they floated in March, Parsley Box has a lot to do to generate investor appetite for its story.”