Parsley Box looking for more cash as it wraps up disappointing year

Direct-to-consumer ready meal company Parsley Box said in an update on Wednesday that its trading performance running up to the end of the year was in line with its September expectations, as it softened investors up for the possibility of a new fundraise.

The AIM-traded firm said it was on track to deliver full year revenue marginally over the lowered £25m forecast, representing modest year-on-year growth, with its year-end cash balance expected to be around £2.2m.

Parsley Box said it had worked “collaboratively” with its key suppliers and received support in rebuilding stock levels over recent weeks.

The firm said the lower stock levels impacted average order values for much of the second half, although they had been recovering well in recent weeks as stock availability improved, and after it relaunched with new recipes and dishes.

Parsley Box also announced that it had appointed Simon Russell as managing director, responsible for customer service, product development and the day-to-day running of the UK business.

The appointment would enable chief executive officer Kevin Dorren to increase his focus on developing the group's business, particularly strategic growth opportunities.

Russell was formerly at the John Lewis Partnership in various leadership roles for more than 20 years, where he was responsible for the 'shop of the future' vision from both a customer experience point of view and a business operating model.

Parsley Box said he would bring a “wealth of omnichannel retail experience” to the new position at the company.

Finally, on the financial front the board said that to support its investment plan, Parsley Box was intending to raise further funding during the first quarter.

Certain members of the board, together with their associates, had indicated their intention to invest.

“I am pleased to announce that we have delivered on our revised 2021 plan,” said chief executive officer Kevin Dorren.

“The supply chain issues, widely felt across the food sector, need hour-by-hour focus and Simon's appointment will allow us to continue providing excellent service to our existing customers, without delaying our longer term plans to deliver a platform for independent living.

Dorren noted that at the initial public offering in March, the company stated its intention to appoint high-calibre talent to build “the right infrastructure” for future growth, with Simon Russell set to play a key part in that.

“I am looking forward to announcing the investment plan in the new year to outline the next steps in Parsley Box's development.”

Russ Mould, investment director at AJ Bell, quipped that the “worst performing IPO” of 2021 was going from bad to worse, however, with Parsley Box preparing to go “cap in hand” to investors to ask for more money.

“The share price has fallen again because the market has taken the view that a troubled company will only be able to raise more money if new shares are issued at a big discount,” Mould said.

“Parsley Box has been a real flop since listing, with the shares now down 81% since its March IPO thanks to two horrific trading updates.

“First it said that sales growth had been hit by the end of lockdowns, with consumers having more freedom where to shop and eat. Then it suffered from supply chain problems hitting stock availability.”

Mould said it could be surmised that, as a small player, Parsley Box was not seen as a key client for suppliers and so failed to get the preferential treatment a larger player would get in times of crisis.

“Parsley Box says it has now relaunched half of its entire product range with new recipes.

“That is not a ringing endorsement for its meals, as a relaunch normally suggests sales have been sluggish and so something must be done to get the tills ringing again.”

Russ Mould said the company’s key problem was that it did not have a unique selling proposition.

“It provides meals for old people that can stay on the shelf for a long time without having to be put in the fridge or freezer.

“Fray Bentos has already cornered that market and there is plenty of competition from supermarkets for individual meals that are either frozen or chilled.

“Companies like Cook and Wiltshire Farm Foods are thriving from selling posh ready meals to the older generation, so Parsley Box is left fighting for space in what is already a well-served industry.”

At 1045 GMT, shares in Parsley Box Group were down 13.05% at 37.39p.