Gourmet foods group Maggie Beer saw top-line growth for the half year ending December 31 last year, driven by stronger sales in its core products (up 6 per cent) and gift hampers (up 5 per cent).
But the news was less rosy on the bottom line.
Sales for the period reached $54.4 million, marking a $2.9 million on-year increase.
Gross margin also improved, rising to $27.7 million from $26.2 million in the prior period. However, EBITDA (earnings before interest, taxes, depreciation, and amortisation) fell from $3.6 million last year to $3 million this year.
Chairman Mark Lindh said the company targets annualised cost reductions of $3.5 million to $4 million through streamlining operations, margin improvements, and improved overhead and inventory management.
“Operationally, the company is delivering on material improvements in key financial measurements, including sales growth, inventory reduction, working capital, and margin,” he added.
Continued operations aim for annualised gross margin savings of $1.5 million and cost of doing business savings of $2 million to $2.5 million.
These cost-saving initiatives exclude Paris Creek Farm, which the company said has already shown improved gross margins and better operating cash flow following changes implemented during the half year.
“The financial focus in the second half will be on delivering targeted annualised cost reductions of up to $4 million to improve earnings in both the short and longer term whilst maintaining continued growth in revenue,” Linh concluded.
