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“We’ve suffered pain as much as you have,” My Food Bag chairperson Tony Carter told shareholders who have seen the price of their investments drop more than 70% in the past year.
Despite a “tough” start to My Food Bag’s current financial year, shareholders at the company’s annual general meeting in Auckland were told they could soon start to receive dividends again.
The cost-of-living crisis has put the company under severe pressure, with fewer customers ordering its meal-kit boxes.
The company’s profit fell to $7.9 million in the year to the end of March from $20m the previous year as meal kit deliveries dropped 12%.
Angry shareholders expressed their disappointment at the meeting, including one asking what the board was doing to reverse the share price falls.
“The board is obviously concerned about the share price,” Carter said. “It’s something we are not pleased with. We are all shareholders in our own right.”
He said the company could not control the share price, but it could take steps to improve its performance.
“That’s very much what we are focused on,” he said. “The share price will respond, providing we demonstrate improvement.”
Chief executive Mark Winter said My Food Bag had invested about $5m in picking technology at its meal-kit assembly plants over the past year.
That had seen it reduce mistakes in putting the kits together, and increasing the number of different recipes it could offer customers in any given week.
“This has been a transformational investment for our supply chain,” Winter said.
“Our new picking technology has led to an improved customer experience, with fewer picking and quality issues being reported, and improved net promoter scores.”
The investment had led to labour-savings, and less wastage, he said.
The business had also cut its workforce by around 10%.
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My Food Bag recipes are developed in its Parnell kitchen.
Other cost savings included ending its employee share-ownership scheme, and delisting its shares from the Australian ASX sharemarket, leaving them trading on the New Zealand NZX sharemarket.
It had also decided to close its meal-kit assembly plant in Highbrook in Auckland, and would complete this in September.
Another shareholder questioned share rights awarded to senior executives.
“Considering My Food Bag’s dismal performance, including the destruction of shareholder value to 10% of the 2021 list price, and the decision not to pay a final dividend for 2023, how can the board justify awarding performance rights of nearly two million shares to chief executive Mark Winter, and chief financial officer Leanne Dekker?” he said.
Carter said the shares would only vest to the executives, who joined My Food Bag in 2022 and 2023, if they hit performance targets.
“They are very much performance-related,” he said.
“While we acknowledge the share price performance, we still want great leadership for this business,” Carter said.
Winter and Dekker’s pay packages were appropriate, he said.
Another shareholder asked why My Food Bag did not report on its carbon footprint and its climate-related risks.
They were told their biggest risks were related to its transport, packaging and the company had measured its carbon footprint. They were told the company was focused on reducing its carbon footprint.
Carter said the company’s Bargain Box brand had done well as consumers looked for value, but he said the economic environment would remain tough for the rest of the current financial year, which started on April 1.
When asked by one shareholder about whether the company had any plans to buy other companies, Carter said the company had not earned the right to make acquisitions.
Directors Sarah Hindle, Jennifer Bunbury, and Mark Powell were all re-elected to the board by shareholders.
In November, the company will report on its first-half report for the six-month period ending in September.
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