My Food Bag co-founder and former chief executive Cecilia Robinson has rejoined the board of the meal kit delivery company, following the resignation of director Chris Marshall.
Robinson was reappointed as a director of the board at the company's annual general meeting this morning in Auckland.
Robinson, who co-founded the Auckland-based firm with her husband James Robinson, Theresa Gattung and celebrity chef Nadia Lim in 2012, was chief executive of the company until 2018 ahead of the firm's public listing.
She is a significant shareholder in My Food Bag, which sends out 1.5 million food kits annually.
Chairman Tony Carter said Robinson would bring "significant knowledge" and "an innovative drive" to the board on her return.
Speaking to shareholders, Robinson said she believed My Food Bag still had "amazing opportunity in this market".
"I'm back to serve the investors. While I am CEO of Tend Health on a day-to-day basis and also a director inside Pie Funds, I believe that I can bring institutional knowledge to this business and help lead My Food Bag alongside the directors and leadership team into the next generation," Robinson said.
"I feel strongly that we've got a really exciting opportunity to be able to really make a dent into the wider supermarket game inside New Zealand."
My Food Bag listed on the New Zealand Stock Exchange in March 2021 and the company's share price has been unfavourable ever since.
Company shares have fallen by 7 cents, or 7.5 per cent, to 73c per share - an all-time low since listing at $1.76 per share, which was below the initial public offer price of $1.85.
During the meeting, Carter acknowledged My Food Bag's share price had been "deeply disappointing", but he said this had also been the case for other meal kit companies listed on other sharemarkets around the world, including Marley Spoon listed on the ASX, which share price had plunged by 80 per cent in recent times.
My Food Bag posted a $20 million net profit after tax and revenue of $194. In FY22.
In a trading update earlier this month, My Food Bag said it had a more sluggish start to trading than expected in the new financial year, with deliveries down 3.8 per cent compared with the end of July last year.
It said Omicron could be to blame for supply and delivery hiccups.
But it said active customer numbers recovered from the start of the year to reach 73,145 - slightly ahead of 72,105 a year earlier.
At the meeting, one shareholder said "the market did not believe My Food Bag had any growth potential" and "more work" needed to be done in this area.
He said he hoped the new director would be able to achieve this.
Carter responded: "The market might not believe we've got growth potential, but I can assure you the current board does."
Another shareholder asked about "shrinking margins" and whether this was a new reality for the company.
My Food Bag chief executive Kevin Bowler said My Food Bag was confident it could improve it margins over time, and the company's $5m investment in a picking technology would help to realise this.
"We're certainly trading through some difficult periods at the moment with costs on just about every line on the PNL under pressure, but we look at some of the investment we are making in operations, and we will see considerable improvements both in terms of the quality of the product but also cost to produce.
"We are confident there are opportunities [to grow], we're also continuing to look at vertical integration options which would result in us capturing margin that some of our suppliers are currently capturing," Bowler said.
"We are confident there are modest improve gains to be made."
Carter added that the board was "conscious not to overly increase prices" on fears of suppressing demand.
Another shareholder asked what was the board and management doing to reverse "constant loss of value" and was it confident the slide since day one could be reversed.
"We're very mindful of the share price performance. I think it is worth noting and I don't want to sound defensive, but there are listed competitors in other markets like Marley Spoon and Hello Fresh, that trade on other stock exchange, and their share prices have declined by around 80 per cent over the same period.
"The sector as a whole seems to have fallen out of favour," said Carter.
"It sounds very defensive when you say we've done better than they have, because that's no consolation to our shareholders, but that is the reality - this sector as a whole has come under pressure."
Part of My Food Bag's growth strategy is resting on the introduction of "picking technology" developed by an unnamed European vendor in a bid to "transform" its operating model and ensure future scalability.
Bowler told the Herald that once in use, the implementation of the back end technology would "unlock further growth" across its portfolio, including aiding with its planned expansion of its The Kitchen marketplace, which currently offers 380 pantry items and groceries that can be purchased alongside its meal kits.
"The investment will allow us to significantly simplify our operating processes, reducing our dependency on temporary labour and making the job of picking a lot easier, thereby reducing errors, as well as delivering improved operational productivity and quality outcomes," he said.
"This technology will give us the ability to vastly extend recipe choice as well as extend personalisation and customisation benefits. Ultimately, this is an investment in a far superior customer experience. We expects the gains of this technology investment of about $5m to be realised in FY24 and beyond."
Bowler said current trading conditions were "tough", and were being driven by inflationary pressures.
My Food Bag was working on innovation to combat this, he said, including new product development in a bid to offset the headwinds.
"Our big investment in operations automation will result in us being able to pick individual ingredients resulting in us having a much wider range of recipes and a much wider range of personalisation and customisation options for customers and we think they will be really excited about what they see a few months down the track," he said.
"Looking at the remainder of FY23, we continue to navigate the continued uncertainty in the wider environment, including inflation, labour availability and ongoing supply chain pressures; not least at which caused by weather. Our portfolio of brands across My Food Bag, Bargain Box and Fresh Start gives us flexibility to meet the changing needs in the trading environment and our supply chain improvements along with staged price increases are helping to counter some of the inflationary pressures."
Food Bag is trading well below analyst valuations, but the My Food Bag board still intends to pay an interim dividend of 3c per share in December.
Bowler said he believed this would resonate well with shareholders.
"Whilst the company may not be having the year that it had last year, it's still a very profitable, successful business and able to sustain dividends."
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