- The Food Revolution Group (FOD) hiked up its prices in September to increase the amount of cash flowing into the business
- Despite increases in revenue and earnings compared to the September quarter of 2019, FOD still went cashflow-negative during the September 2020 quarter
- The meant at the end of September, Food Revolution has just $325,000 in available funds — enough to last less than half a quarter
- As such, the company upped the prices of Original Black Label (OBL) juice products in all major retailing customers, along with some other products
- The company said at the end of October, it had bolstered its cash position to $1.6 million
- Shares in FOD were suspended by the share market operator yesterday regarding its failure to comply with certain listing rules and last traded for 4.4 cents each on Friday, October 30
The Food Revolution Group (FOD) hiked up its prices in September to increase the amount of cash flowing into the business.
Over the September quarter, FOD tabled sales revenue of $9.6 million, which is 28 per cent higher than the same time period last year.
On the same hand, the company’s earnings before interest, tax, depreciation and amortisation (EBITDA) were $1.5 million for the three months, which is a much better results than the $483,000 EBITDA loss from the year before.
However, despite the positive increases in revenue and earnings, The Food Revolution Group is still spending more than it’s earning, resulting in a net cashflow-negative result of $1.2 million for the quarter.
This meant at the end of September, FOD had just $325,000 in available funds. At current spending levels, this would last less than half a financial quarter.
As such, the business upped some of its prices in the quarter, claiming that this should be to improve cashflow enough during the final quarter of 2020 that the company can keep its business running.
Specifically, FOD said it has locked in “significant price increases” with all of its major retailing customers for Original Black Label (OBL) juice products, along with price increases for house brands packed for the major retailers.
In light of this, the company has already seen some steady cashflow during the December quarter and said it had $1.6 million in the bank at the end of October.
On top of this, the company is expecting just under $6 million funding from a 2018 deal with Careline Australia to come through following a shareholder vote at the FOD 2020 Annual General Meeting (AGM).
The company said Careline had to seek an extension to make this payment because the COVID-19 pandemic meant it was unable to transfer the funds to Australia in a timely manner.
The company has not yet given the date for its 2020 AGM.
Shares in FOD were suspended by the share market operator yesterday regarding its failure to comply with certain listing rules. The company’s shares last traded for 4.4 cents each on Friday, October 30.