Parsley Box warns on revenues as orders fall

Parsley Box warned on Wednesday that full-year revenues would be lower than expected as total order numbers fell and the cost of acquiring new customers continues to rise.

In an update for the first six months of 2022, the meal delivery company said revenues fell to £9.6m from £14m in the same period a year earlier, with new customer revenue down to £0.9m from £3m and repeat customer revenue of £8.7m, versus £11m. The adjusted EBITDA loss was reduced by 42% to £2.1m.

Parsley Box said the cost of acquiring new customers has continued to rise, reaching £34 in the first half from £31 a year earlier. It also said that deploying cost effective marketing spend "continues to be a key challenge".

"The group has developed a new partnership with the Daily Mail online to acquire new customers through food hamper offers for occasions such as the Queen's Jubilee and Wimbledon which has opened a new customer acquisition channel that will continue in the second half of the year," it said.

In addition, a new TV campaign is due to launch in September, although Parsley Box said it will reduce other marketing acquisition activities from the fourth quarter "should the high cost of acquisition continue".

Total order numbers in the first half fell to 212,000 from 385,000. As a result, the company now expects full-year revenue of £19m, down from a previous forecast of £22.5m. Full year adjusted EBITDA is expected to remain broadly in line with expectations at a loss of £4.1m.

Chief executive Kevin Dorren said: "We have continued our product innovation at pace to increase the opportunities for customers to order from us, and remain focused on balancing investment in customer acquisition and maintaining cash reserves, whilst we navigate the challenging consumer environment.

"We recently brought down the price of a range of customer favourite meals to £2.95 to help alleviate the rising cost of living, and have frozen all prices until September. We remain well funded and continue to deliver quality, good value, and nutritious food."

At 0940 BST, the shares were down 29% at 12.50p.