How Pure Foods Tasmania’s Elato Deal and Retail Expansion Spark a Turnaround

Operational Reset and Financial Discipline

Pure Foods Tasmania Limited (ASX:PFT) has emerged from a challenging period with a clear focus on operational efficiency and financial stability. After a strategic realignment initiated in late 2024, the company has shifted away from aggressive growth to prioritise cost control, balance sheet strength, and improved profitability thresholds. This disciplined approach has resulted in positive cashflow from operations and EBITDA in several recent months, alongside growing gross profit margins.

The consolidation of manufacturing facilities completed by the end of 2025 is expected to yield annual savings of approximately $200,000, underpinning the company’s leaner cost structure. Executive Chairman Malcolm McAully emphasised the transformation: "We are now lean, aligned and disciplined," highlighting the company’s evolution into a flexible manufacturing and distribution platform designed to convert incremental revenue into profit.

Expanding National Footprint and Retail Partnerships

Pure Foods has significantly broadened its national distribution footprint during the first half of FY26. Notably, the company secured new product ranging with Costco Australia, including Tasmanian Pâté and Daly Potato products, with initial orders scheduled for March 2026. The Tasmanian Pâté range was also relaunched in over 70 Drakes Supermarkets stores across South Australia and Queensland.

Perhaps most striking is the expansion within Coles supermarkets, where distribution has more than doubled from approximately 300 to 700 stores nationwide. This substantial increase in retail presence is expected to drive further revenue growth and brand visibility.

Strategic Acquisition and New Growth Division

In a move to diversify and strengthen its product portfolio, Pure Foods completed the acquisition of premium ice cream brand Elato in November 2025. This acquisition formalised the establishment of the company’s Ice Cream Division, combining Elato with the existing Cashew Creamery range under a unified growth strategy.

Roz Kaldor-Aroni, founder of Elato, has been appointed General Manager of the division, tasked with expanding national distribution, accelerating brand momentum, driving product innovation, and exploring contract manufacturing opportunities leveraging Pure Foods’ Hobart production facilities. The Board views this division as a scalable platform within a premium category, poised for growth.

Capital Management and Governance Enhancements

Despite reporting a statutory net loss of $6.849 million and a net operating cash outflow of $1.59 million for the half-year, Pure Foods has made significant strides in strengthening its financial position. Total borrowings have been reduced by approximately $2.5 million over the past year, complemented by a $1.75 million capital raise to bolster the balance sheet.

The company is actively engaged with its banking partner to refinance and align facilities with its revised operating model and forecasts. Meanwhile, governance improvements have been implemented following inadvertent ASX Listing Rule breaches, with the Annual General Meeting deferred but set to be convened soon. The Board affirms confidence in the company’s governance framework moving forward.

Looking Ahead

Entering the second half of FY26, Pure Foods Tasmania is positioned to capitalise on strengthened retailer relationships, expanded distribution channels, improved margins, and a lower cost base. Management anticipates continued revenue growth across core products, alongside increasing contributions from new retail ranges, contract manufacturing, and the Elato brand.

While the restructuring phase has been demanding, the company’s foundations are now materially stronger. The Board remains committed to disciplined execution and delivering long-term shareholder value as sales momentum builds.