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Youfoodz to miss profit targets as pandemic hits sales

Business

Brisbane’s Youfoodz was unlikely to meet its 2021 earnings forecasts despite a strong pickup in its consumer business.

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The company, which produces ready-made meals, said a slump in its business-to-business channel, caused by the pandemic, had impacted earnings. It had also invested in marketing to drive customer acquisition.

The announcement that it would miss targets sent its shares into a 7 per cent slump in early trade.

It said its revenue for 2021 would be in the range of $146 million to $148 million versus a prospectus forecast of $149.9 million.

Its earnings before interest, tax depreciation and amortisation (EBITDA) would be between $1 million and $2 million, well below the prospectus forecast of $2.9 million.

The company generated strong revenue growth in the third quarter from its consumer channel and early results indicated the fourth quarter was showing similar results.

However, it described the business-to-business result for the third quarter as constrained and growth was not expected until 2022.

Its consumer channel saw growth of 41 per cent in the third quarter, driven by marketing initiatives.

Youfoodz said the average order value increased by 10.4 per cent to $96.80.

“The summer marketing campaign, which concluded during the third quarter, delivered strong results with national brand awareness increasing materially,” it said.

In the business channel, revenue fell 3.8 per cent which it said was related to COVID-19 restrictions on its wholesale customers.

“As pandemic restrictions have evolved, early indications in the fourth quarter are that some P&C customers are beginning to increase ranging again, however, uncertainty exists as to when gym and corporate customers will recommence ordering,” it said.

 

 

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