Parsley Box plunges on slump in new customers
Parsley Box, the Scottish ready meals service run by Chris van der Kuyl and Kevin Dorren, continued to suffer from the decline in online demand since the height of the pandemic.
Total revenue for the half year to the end of June plunged by 32% while income from new customers (£899,000) shrank to a third of the corresponding period (£2.96m).
This followed a cut back in marketing acquisition spend in the first quarter whilst new funds were sought.
New customer orders dropped by more than 70% to 35,000 while existing customers’ orders fell 31% to 177,000.
However, the loss before tax came in lower at £2.77m against £5.4m.
Kevin Dorren, CEO, remained confident of the firm’s long term future. He said: “As with other retailers, 2022 has been challenging for the company as consumers feel the effects of the higher cost of living.
“We have continued to invest in product innovation to deliver category expansion with the launch of our larger portion and sharing meals to drive into additional meal occasions and more snacks and bakery to increase basket size.
“We have also introduced the ‘everyday low price’ range of meals at a £2.95 price point to ensure our product range meets the needs of all customers in our target over 65s market, especially those feeling the pressure of increased energy prices.
“We have launched ParsleyClub, our new membership scheme, designed to reward our loyal customers and improve retention rates, and continue to evolve our marketing strategies to mitigate higher customer acquisition and retention costs.”
With online sales declining, Mr Dorren said the firm’s key competitive advantage is that 90% of its meals can be stored in the cupboard for up to six months, enabling customers to stock up to manage food price inflation and minimise their energy costs.
“The ease of storage and speed of preparation is also a significant benefit for the public sector, and we continue to investigate nascent B2B revenue channels in this area,” he said.
“We have taken a number of actions to adapt to the changing macro-economic climate, improve gross margins, and reduce overheads to conserve the £5.9m funds raised in March.
“The board remains focused on investment strategies to generate a longer term return to revenue growth, and are reorganising the business for the current revenue run rate to balance cash consumption.”
He maintained that the company has “strong shareholder support as evidenced during the March fund raise where board members invested over £3m of the total raised.”
However, the fund raising was largely snubbed by investors. Only £140,000 or 12.85% was raised of the £1.1m proposed total in the open offer.
Together with £5.9m pledged from a placing of shares, the company raised gross proceeds of £6.07m, about £1m short of the target.
Mr Dorren added: “Despite the current market challenges, critically we have maintained the quality of our product and continued to deliver the high standard of service our customers deserve and following the actions taken the company is now in a better position to withstand the macro-economic pressures whilst continuing to develop a long-term future.”
Shares closed unchanged at 9.75p, valuing the company at just £8.53m, little more than a tenth of its valuation in its IPO last year.