AS I SEE IT: TERRY MURDEN on the latest promises of a revival at the ready meals firm
Year end figures from Parsley Box have given the troubled ready meals company slightly better reasons to be optimistic, though we’ve been here before and investors who bought into the Edinburgh-based firm’s IPO just a year ago have had their fingers badly burned.
It has more cash in the bank – £2.5m against £900,000 in the previous period – and supply chain issues have been tackled to improve stock availability.
Media and analysts largely gave the Chris van der Kuyl outfit the benefit of the doubt, despite the company’s plummeting value since its admission to the Alternative Investment Market in March last year. The shares were floated at 200p and are now trading at a tenth of that price.
And while its £6m equity fund-raising last month was seen as providing funds to rebuild the business, few bothered to mention that this fell £1m short of the target after shareholders decided they had lost their appetite for the fledgling operation which was built on the growth in home delivered food.
Once again Mr Van der Kuyl and his CEO Kevin Dorren have talked up company’s prospects for a better year, as they did during a difficult 2021.
After slowing demand, a widening of pre-tax losses, and supply chain difficulties, Mr Dorren told investors after last year’s interims that “this has been a highly rewarding period for the company”.
Shareholders were unimpressed and Russ Mould, investment director at AJ Bell, went so far as to accuse the company of “failing to live up to the hype”.
Those investors who have remained with the company will be hoping there is more substance behind Mr Dorren’s latest pronouncement that the company sees “considerable opportunities for expansion and growth”, despite full year losses rising by more than 200%.
New customer growth for home delivered meals was always likely to ease as lockdown ended and consumers reverted to normal buying habits. Parsley Box is hoping that the trend among its baby boomer-plus age group, will remain strong enough to provide long term stability.
However, with new customers falling by more than a third, the company is becoming dependent on repeat business from existing ones. As the customer base is in the over-65 age range this might raise eyebrows about the sustainability of such a strategy.
Terry Murden held senior positions at The Sunday Times, The Scotsman, Scotland on Sunday and The Northern Echo and is now editor of Daily Business