Shares of Edinburgh-based ready meals firm Parsley Box Group plc fell about 17% on Monday despite the firm publishing a trading update saying it expects revenue for the first half of 2021 of over £14 million, an increase of 26% over the same period in 2020 and 411% over the first half of 2019.
Parsley Box shares are now trading around £1.40. The firm joined the stock market in March this year at £2 per share.
“Parsley Box’s proposition may have appealed to people stuck indoors during lockdown, but now it is finding new customer recruitment harder as Covid restrictions are eased,” said AJ Bell investment director Russ Mould.
“That’s led to analysts slashing their earnings forecasts and the shares trading 25% below the price at which they joined the market in March.
“If people are able and confident enough to get out and about, why use someone like Parsley Box when mainstream supermarkets offer plenty of choice at arguably cheaper prices?”
Parsley Box said: “Active customers at the period end were at record levels as a result of the substantial number of new customers acquired in H1 2021, albeit new customer additions returned to a more normalised level compared to the unusually high level of new customers in H1 2020.
“Repeat customer orders, the key driver for long term profitable growth, showed a significant increase on the comparable period in H1 2020, demonstrating the benefit of the acceleration of customer growth seen in 2020, which also continues to flow through into higher order values.
“As Covid-19 restrictions ease, shopping behaviours are beginning to normalise and this has had some impact on sales growth.
“However, the board anticipates that this effect will be short term and is confident that the accelerated shift in consumer behaviour towards our direct-to-consumer model is permanent and that the underlying growth drivers of the business and the favourable demographic trends, remain in place.
“The board expects H2 revenue growth to be substantially ahead of H1, driven by product innovation and continuing progress in repeat AOV.”
Parsley Box CEO Kevin Dorren said: “The continued growth delivered in the first half of the financial year driven by strong growth in repeat orders has continued our positive momentum and is very encouraging.
“This, together with our key food development hires of Cassandra Suddes and Serena Philipson, gives us every confidence in the growth prospects for our business.
“We look forward to delivering the first phase of our product innovation pipeline in H2 2021.”