MBH’s Cost Cuts and Asset Sale: Can Profitability Finally Stabilise?
Maggie Beer Holdings Ltd reports a transformative FY25 marked by strategic restructuring, significant cost savings, and a 3.7% sales increase excluding Paris Creek Farms. Despite EBITDA pressures from non-recurring investments, the company is positioning for sustainable profitability and growth in FY26.
- Sale of Paris Creek Farms reduces EBITDA pressure by over $2 million
- Achieved $1.8 million annualised operational savings through labour and warehousing restructure
- 3.7% top-line growth excluding Paris Creek Farms with gross margin stable on an adjusted basis
- Implementation of Shopify across three eCommerce platforms enhances digital capabilities
- Organisational restructuring streamlines operations with renewed focus on profitability
A Year of Review and Restructure
Maggie Beer Holdings Ltd (MBH) closed FY25 with a clear narrative of transformation. The year was characterised by a comprehensive review of operations, a strategic refresh of organisational structure, and a sharpened focus on cost discipline. Central to this was the sale of Paris Creek Farms, which alleviated over $2 million in EBITDA pressure, allowing the group to concentrate on its core businesses.
Operationally, MBH implemented significant labour and warehousing restructures, delivering $1.8 million in annualised savings. These changes were critical in offsetting what would have otherwise been a steeper EBITDA decline. The company also streamlined its corporate and marketing functions, achieving a $1 million labour cost reduction, underscoring a commitment to leaner operations.
Steady Sales Growth and Margin Management
Excluding the divested Paris Creek Farms, MBH recorded a 3.7% increase in sales, driven by solid performances in its eCommerce and retail segments. The eCommerce platforms, Hampers Emporium, Gifts Australia, and Maggie Beer Online, benefited from the rollout of Shopify, which enhanced customer experience and operational efficiencies. Gross margin remained stable on an adjusted basis at 47.2%, despite some headwinds from inventory provisions and promotional activities.
The Hampers & Gifts Australia division saw volume growth of 9% and a 3.1% increase in average order value, although margin compression was noted due to targeted discounting and stock provisions. Maggie Beer Products maintained steady retail growth, particularly in cheese and paste categories, while managing cost pressures from utilities and IT investments.
Strategic Clarity and Future Focus
MBH’s leadership has restructured the organisation into two main divisions, E-Commerce and Maggie Beer Products, each accountable for profit, cost management, and strategy. This clarity aims to drive accountability and sharpen focus on profitability. The company also refreshed its corporate values and performance frameworks, alongside bolstering cybersecurity measures, reflecting a broader commitment to operational resilience.
Looking ahead, MBH is targeting revenue growth beyond $100 million with sustainable profitability. The strategy includes expanding product categories, innovating in gifting solutions, and leveraging data insights from Shopify to optimise pricing and marketing. The company plans to broaden its gifting occasions beyond traditional holidays, aiming to capture year-round demand through new product development and partnerships.
While FY25’s EBITDA was impacted by non-recurring investments and goodwill impairments, the groundwork laid in cost optimisation and digital transformation positions MBH for a more stable and profitable FY26. The company’s zero debt position and renewed $10 million facility provide financial flexibility to support growth initiatives.
Bottom Line?
MBH’s FY25 reset sets the stage for a focused push toward profitable growth and market innovation in FY26.
Questions in the middle?
- How will MBH balance growth ambitions with margin pressures in a competitive gifting market?
- What impact will the full integration of Shopify and data analytics have on customer acquisition and retention?
- Can the company sustain cost savings while investing in new product development and marketing?
