My Food Bag on track for initial public offering on NZX

Celebrity chef Nadia Lim co-founded My Food Bag in 2013. Photo / Supplied

My Food Bag says it is still on track with its plans to list on the sharemarket within the next couple of years.

The grocery meal kit company, which recently branched out into the ready-made meals market, is working towards scaling the business and increasing sales ahead of its initial public offering "next year or the year after".

My Food Bag chief executive Kevin Bowler said the company had not yet fixed a date for the initial public offering but was getting the business in shape ready for an NZX listing.

He could not disclose any financials or targets it hoped to achieve ahead of the IPO but said the company's growth in the year to date was up on the same period last year despite more competition in the market.

"We're investing a lot of time and effort to get the business into a position where we've got the scale, the profitability and some robustness to be in a position to move in that direction," Bowler said.

"We're getting the business ready; all of the processes in place, making sure our IT systems are strong and cyber security is good - all the things you'd expect a mature company to have."

Bowler, who has been involved with the purchase and sale of companies but not an IPO, said he believed there was an appetite for My Food Bag to list.

"It's quite a big process, the business needs to be in a really secure state, and in a position where we can make commitments to prospective investors."

My Food Bag is in majority private equity ownership. Bowler said listing would inject more capital into the business and enable it to grow further. This could potentially mean expansion overseas, he said, however the priority at present was to expand within New Zealand.

"The business is in great health, we believe there's a lot of growth potential for it and we know that it's a well-known brand so giving Kiwis an opportunity to invest in it is something we think in the long run will be attractive to New Zealand investors," he said.

Mark Lister, head of private wealth research at Craig's Investment Partners, said there was an appetite for My Food Bag to list on the stock exchange.

Market conditions were favourable and the company was about right in its growth journey to make its sharemarket debut.

Kevin Bowler, chief executive of My Food Bag. Photo / Supplied

Lister said the stock exchange had been starved of companies coming to market over the past few years - which could work in My Food Bag's favour.

"It's been a reasonably lean period so what that means is any companies that are well-known, have an interesting growth story ahead of them and are well-priced will be certainly of interest to investors," Lister said.

"Is it a good time for companies to consider listing on the sharemarket? Yes, for sure.

"There's lots of money around, interest rates are very low so they're not getting much of a return from the banks, house prices aren't going up anymore, in fact they're falling in places like Auckland. The sharemarket has been an exceptionally good performer, up 15 or 20 per cent in the last 12 months and in previous years it has been strong so the stars are aligned for new listings to come to market."

Mark Lister, head of private wealth management at Craig's Investment Partners. Photo / NZME

People were "screaming out" for new investment opportunities, he said.

"People like brand names - they like things that resonate with them as customers."

Last year My Food Bag surpassed $100 million in annual revenue, and the company was valued at $120m by investment firm Waterman Capital in 2016.

My Food Bag is now the country's third largest retailer after the major supermarkets, five years on from inception. It was founded by Cecilia and James Robinson, celebrity chef Nadia Lim and Theresa Gattung in 2013.

My Food Bag last week rolled out its ready-to-eat meals under the brand name Made. It is has 10 different varieties but plans to develop others.