Pure Foods Tasmania has completed a strongly oversubscribed $1.76 million capital raise and reported improved preliminary FY25 results, signaling progress in its turnaround strategy.
- Oversubscribed $1.76 million capital raise exceeding target by $400,000
- Conversion of $1.19 million shareholder loans to equity strengthens balance sheet
- Directors subscribed $610,000, showing strong board commitment
- FY25 net loss improved by $1.1 million year-on-year to $2.8 million
- Cost savings of $1.9 million and restored gross margin integrity
Capital Raise Exceeds Expectations
Pure Foods Tasmania Limited (ASX – PFT) has successfully completed a capital raising round that was heavily oversubscribed, bringing in approximately $1.76 million; well above its initial $1.36 million target. This capital injection is a key part of the company’s ongoing recapitalisation efforts aimed at strengthening its financial foundation. Notably, $610,000 of the placement was subscribed by company directors, underscoring strong internal confidence in the company’s future prospects.
Alongside the capital raise, Pure Foods Tasmania converted $1.19 million in shareholder loans into equity, a move that materially improves the company’s balance sheet and reduces debt-related pressures. The shares and options issued as part of this process are subject to a 12-month voluntary escrow, reflecting a commitment to long-term value creation.
Preliminary FY25 Results Show Tangible Progress
The company also released preliminary unaudited results for the fiscal year 2025, highlighting meaningful improvements. The net loss narrowed by $1.1 million compared to the previous year, from $3.9 million to $2.8 million. This improvement was driven by annualised cost savings of $1.9 million achieved through efficiency measures and a restored gross margin, with the cost of goods sold reduced from an unsustainable 110% of revenue to a more manageable 76%.
Pure Foods Tasmania has rationalised its product portfolio by cutting unprofitable lines and sharpened its focus on core brands such as Woodbridge Smokehouse, Tasmanian Pate, Daly Potato Co, and The Cashew Creamery. The introduction of a broker distribution model aims to broaden sales reach and support future growth.
Looking Ahead – Confidence in Turnaround Strategy
While the company’s EBITDA remains negative at approximately $2.6 million, the improvement in normalised EBITDA to around $2.3 million in losses signals that the restructuring initiatives are beginning to take effect. The board expressed confidence that the strategy implemented in late 2024 is practical and achievable, setting the stage for accelerated sales growth, margin expansion, and strategic opportunities including targeted mergers and acquisitions.
Pure Foods Tasmania’s management thanked shareholders for their ongoing support and emphasized their commitment to executing the growth strategy. The company’s progress in recapitalisation and operational improvements marks an important step in its turnaround journey, though the path to sustained profitability will require continued execution and market acceptance.
Bottom Line?
Pure Foods Tasmania’s strengthened balance sheet and improved FY25 results lay the groundwork for growth, but the next milestones will test the durability of its turnaround.
Questions in the middle?
- How will Pure Foods Tasmania leverage the new capital to accelerate sales growth?
- What specific M&A opportunities is the company targeting to expand its portfolio?
- When can investors expect audited FY25 results and further financial guidance?