Analysts trim target price at Parsley Box as ready meal firm cuts losses
Analysts have cut their expectations of ready meal business Parsley Box, despite the firm trimming its losses.
Parsley Box’s adjusted earnings before interest, tax, depreciation and amortization (EBITDA) is around 10 per cent better than management expectations for the five months to 31 May, the company said in a statement today.
Losses have been cut by around 44 per cent from a year prior, with Brits reluctant to splash the cash on ready meals once eating out rebounded following lockdown restrictions – which has seen order volumes slip behind expectations.
Although the company has improved its order fulfilment in the face of inflating delivery costs, order volumes have fallen 11 per cent below management’s forecasts.
Parsley Box is now expecting around £22.5m of revenue and an around £4m EBITDA loss for the full year.
Analysts at British investment bank FinnCap has since cut its expectations for the firm, trimming its target share price to 33p from 36p this morning.
Parsley Box’s stock price has fallen more than 50 per cent in the year to date.
Finncap analyst Nigel Parson said that although price increases have helped Parsley Box reduce its losses, its weaker-than-expected performance has been reflected in the bank’s forecasts.
However, Parsley Box CEO Kevin Dorren urged in a statement that the businesses will return to sales growth later this year.
“We continue to navigate a challenging consumer environment suffering from a well-documented reduction in consumer confidence, but continue to make progress,” Parsley Box CEO Kevin Dorren said in a statement today. “Our excellent value ambient meal range is well suited to allow us to hedge short term inflation pressure and we hope this will help alleviate pressure on our customers’ wallet.
“We remain well funded and confident that our product innovation, recommenced targeted marketing strategies and strong cash position will enable us to retain and grow our customer base in our over 65 target market, and return the group to sales growth in the second half of the year.”