Marley Spoon AG's

Management eying for profitability by end of CY19: Marley Spoon AG’s (Proposed ASX Code: MMM) is a Germany based meal-kit company and has developed more than 9,000 recipes over the period. The company has around 111,000 active customers in six countries i.e., Australia, the United States, Austria, Belgium, Germany and the Netherlands. The company lodged the prospectus with the Australian Securities and Investment Commission (ASIC) for an offer of up to 49,296,000 CHESS Depositary Interests (equivalent to 49,296 Shares i.e., 1,000 CDIs is equivalent to one share) at an offer price of A$1.42 per CDI to raise up to A$70 million. The objective of the IPO is to strengthen its balance sheet, fulfill working capital needs, run its business development program, repay existing debts; provide an additional financial flexibility and access to listed capital markets; provide liquid market for CDIs and an opportunity for others to invest in Marley Spoon. Further, benefits of an enhanced profile that arise from being a listed entity, including to attract and retain quality employees, are being looked at through the IPO. On the business segmental front, the company generates revenue mainly from the sale of its meal kits and sale of other products to its customers such as fruit boxes, holiday meal packages, dinner party meal kits and cookie boxes. Over the period of CY15-17, the revenue surged up by 92% at CAGR basis, at the back of organic and inorganic growth during the same period. However, the company’s profit marked a negative CAGR during the same period due to rise in fulfilment expenses, marketing expenses, and general & administrative expenses. Nonetheless, the company is enjoying attractive growth in the domestic market, which is still weighed over by the success of Hello Fresh. In May month this year, Hello Fresh reported group revenue of $457.4 Mn for the first quarter, more than three times what Marley Spoon is forecasting for the entire calendar year. As of now, the company’s customer base is growing by consumer awareness, customer acquisition and utilizing new market opportunities such as the lower priced Dinnerly offering. Moreover, the company focuses on to improve its efficiencies via procurement and logistics optimisation and enhancing manufacturing and automation. The closing date of the retail Offer looks to be around 21 June 2018 and it is expected that the shares will start trading on ASX around first week of July 2018. Many believe that the group can take away a portion of the market share from the supermarket sector giants including Coles and Woolworths as it has Australia as its largest growing market. This is however, yet to be seen in the coming period.
 

Key Dates as per Prospectus (Source: Company Reports)

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