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HelloFresh has revealed record quarterly revenues as the meal kit firm increased its customer base further, but profits fell back as the group spent more on marketing and felt the effects of input cost inflation.

Revenues jumped 16% year on year to €2bn in the second quarter, its highest-ever figure for a three-month period, with active customer numbers nudging up 4.1% compared with a year ago to eight million.

Average order value also rose 11% in the quarter thanks to customers selecting more meals per order and an increased take-up of add-ons, such as fresh produce and grocery essentials, from the new HelloFresh Market offer. The business said it also benefitted from price increases in “certain markets”.

However, despite the record sales, adjusted EBITDA in the quarter fell 7.5% to €146m, while EBITDA slumped 21.6% to €122.1m, as group marketing expenses shot up 44.2% to €307.8m.

CEO and co-founder Dominik Richter said HelloFresh had delivered a “strong” first half of the year, “defying all current e-commerce trends”.

“Even though we’ve been facing a number of macroeconomic challenges, our teams have been able to continue to make significant progress across a number of dimensions. These include progressing investments in production sites and automation, improving productivity across our distribution centers and improving the customer experience by adding more choice, more flexibility and an overall better service,” he said.

“Most importantly, we’ve been largely mitigating inflation effects without passing on the higher costs in full to our customers. Our product offering continues to come at an attractive and competitive pricing and brings additional benefits to our customers, such as having fresh food delivered to their homes, reducing food waste and taking away the hassle of having to think about what to shop and cook.”

In the first half, revenues rose 21% to €3.9bn, with adjusted EBITDA down 22.6% to €245.2m.

Shares in the group opened 5.5% higher to €31.65 this morning.

Morning update

Drinks ingredients supplier Treatt has significantly lowered profit expectations for the year as a result of a myriad of factors, including higher input costs.

The group said in a trading update that its revenue growth was still expected to be strong thanks to a “very strong” order book, its pre-tax profits would now be between £15m and £15.3m.

It compared with a figure of £20.9m last year and analyst consensus of £21.7m.

Treatt blamed lower-than-expected tea sales as consumer confidence in the US deteriorated causing lower demand for the high-margin category of iced and hard tea.

The group also experienced significant input cost inflation, which was mostly passed on to its customers. However, some some longer-term contracts meant it hadn’t yet been able to pass on all its costs across the full portfolio.

Currency volatility also hurt the bottom line following the rapid devaluation of sterling against the US dollar, while the Chinese subsidiary was also hit by ongoing Covid restrictions.

Treatt said that despite the issues it was “encouraged” by other trends seen through the second half of its financial year.

CEO Daemmon Reeve said: “Whilst clearly disappointed by the short-term impact on profitability, we remain encouraged by the underlying trading performance of the business and are confident in the long-term growth drivers for Treatt.

“We have significant opportunities across our categories and geographies and, notwithstanding the short-term impacts in tea, we see strong momentum in all of our categories given the alignment with prevailing consumer trends.

“We also remain excited about the potential in coffee over the next few years and expect this category to be reported separately at the full year given we are now seeing growth in orders and multiple opportunities for the future.”

Shares in the group plunged 29% to 570.6p on the back of the reduction in profit expectations.

English sparkling wine producer Gusbourne has more than doubled its first-half revenues thanks to a recovery of the UK on-trade from the pandemic.

Sales in the half are expected to be up 108% year on year to £3m, with a 66% increase in DTC sales as customers shopped more online and at the cellar door of its Kent vineyard.

UK on-trade sales jumped 128% as the sector continued its recovery, while internatoinal also performed strongly, with Norway, the US and Japan the largest destinations for the business.

CEO Charlie Holland said in the trading update: “e continue to enjoy strong demand for Gusbourne wines driven by the continued expansion of our customer base, both in the UK and internationally. It also reflects the luxury status and reputation of the Gusbourne brand, the dynamic growth of the English wine sector and the increasing demand for English wines.”

The group revealed a new agreement with its lender, PNC Financial Services, increasing its existing £10.5m five-year asset-based lending facilities by an additional £6m.

Gusbourne also announced a purchase of 137 acres of freehold agricultural land adjacent to its estate in Kent for £1.6m.

Holland said it formed “a key part” of the production expansion plans over the coming years.

Shares in Gusbourne increased 4.5% to 66.9p as markets opened.

The FTSE 100 started the week on a positive footing, rising 0.2% to 7,512.12pts.

Earlier risers, aside from Gusbourne and HelloFresh, included Science in Sport, up 4.8% to 33p, Bakkavor, up 4.8% to 105.8p, and McBride, up 3.4% to 20.7p.

Fallers so far, apart from Treatt, included Hilton Food Group, down 2.2% to 1,032.6p, THG, down 1.7% to 68.4p, Deliveroo, down 1.6% to 93.3p, and Finsbury Food Group, down 1.1% to 70.2p.

Yesterday in the City

After a fairly busy start, this week is again looking quiet as the summer holidays remain in full swing.

Tomorrow brings the latest Kantar grocery market share data, while in the US Wal-Mart reports quarterly figures.

The latest UK inflation rate will be revealed by the Office for National Statistics on Wednesday. Brewing giant Carlsberg also reports on its first-half performance on Wednesday, while Target follows Wal-Mart over in the US.

The week is rounded out by the latest consumer confidence index from GfK and the July retail sales from the ONS.