My Foodie Box Reports $1.39M Profit After Selling Meal Kit Business
My Foodie Box Ltd reported a $1.39 million profit for FY24 following the sale of its meal kit business to MFB (WA) Pty Ltd, receiving a 40% stake and vendor financing arrangements. The company now seeks new assets to restore shareholder value amid ongoing financial uncertainties.
- FY24 net profit of $1.39 million reversing prior loss
- Sale of core meal kit business completed May 2024 to MFB (WA) Pty Ltd
- Received 40% equity stake in MFB and provided vendor financing
- Raised $560,650 in debt during FY24 and secured further loans post-year-end
- Shares suspended on ASX since October 2023; plans re-compliance for new acquisitions
Strategic Shift Marks Profitability Turnaround
My Foodie Box Ltd (ASX – MBX) has reported a net profit of $1.39 million for the year ended 30 June 2024, a significant turnaround from a $4.18 million loss in the prior year. This improvement follows the company’s strategic divestment of its core meal kit business to MFB (WA) Pty Ltd, completed in May 2024.
The sale of the My Foodie Box business, which was the company’s primary operation, involved the cancellation of 30 million shares and 7.6 million options held by a related family trust. In exchange, My Foodie Box received a 40% equity stake in MFB, effectively transitioning from an operator to an investor in the meal kit sector.
Vendor Financing and Debt Raise Support Transition
As part of the transaction, My Foodie Box provided vendor financing of $300,000 to MFB, repayable over five years with 10% annual interest, alongside an additional $100,000 loan facility. However, repayments have been delayed, with only modest weekly payments commencing in May 2025. The company has prudently impaired the full amount receivable from MFB due to its net liability position, reflecting credit risk concerns.
During FY24, My Foodie Box raised $560,650 through unsecured loans with interest rates around 10%, and post-year-end secured further funding commitments totaling $300,000 via a lead manager mandate. These funds are intended to support the company’s minimal cash burn and facilitate its search for new acquisition opportunities.
Governance and Leadership Changes Amid ASX Suspension
The company underwent notable board changes during the year. Francis De Souza, with extensive capital markets experience, was appointed Non-Executive Chairman in May 2024, replacing Bryan Hughes who stepped down from executive roles. CEO Mai Hughes resigned following the business sale. These changes align with the company’s pivot towards corporate restructuring and asset acquisition.
My Foodie Box’s shares have been suspended from trading on the ASX since October 2023. The company anticipates needing to re-comply with ASX listing rules upon completing a new asset acquisition or business combination, signaling a potential relisting event in the future.
Financial Position and Outlook
Despite the profit from discontinued operations, the company’s continuing operations recorded a loss of $744,185 for FY24. Net liabilities remain at $787,156, and the auditor’s report highlights a material uncertainty regarding the company’s ability to continue as a going concern. The directors express confidence in securing additional funding and creditor support to sustain operations.
Looking ahead, My Foodie Box is focused on identifying and acquiring new assets to restore shareholder value. The company’s minimal cash burn post-divestment and active debt raising efforts provide a foundation for this next phase, though execution risks remain significant.
Bottom Line?
My Foodie Box’s pivot from operator to investor marks a new chapter, but its future hinges on successful acquisitions and loan repayments.
Questions in the middle?
- Will My Foodie Box secure a new asset acquisition to trigger ASX re-compliance and relisting?
- How will MFB’s financial health and loan repayments impact My Foodie Box’s balance sheet going forward?
- What strategic sectors or businesses is My Foodie Box targeting for its next acquisition?