Shares of Edinburgh-based ready meals firm Parsley Box Group plc fell about 15% on Tuesday despite the firm reporting that its revenue rose 26% to £14 million in the six months to June 30.
Recently floated Parsley Box — which serves the “Baby Boomer+ demographic” — posted a pretax H1 loss of £5.4 million compared with a loss of £1 million in the year-earlier period.
Parsley Box joined the stock market in March this year at £2 per share — but the shares are now trading around £1.03.
Parsley Box CEO Kevin Dorren said: “Parsley Box has achieved a great deal since our IPO in March 2021.
“The business is well capitalised and is using the opportunity to invest in new customers, product innovation and broadening our team as outlined in the run up to IPO.
“We have been successful in strengthening our team in the critical areas of innovation and IT positioning us well to deliver our goals in 2021 and beyond.
“The initial results of the investment in product innovation have been encouraging with the trial of chilled ready meals delivering an increase in customer basket size and lower new customer recruitment costs compared to our purely ambient offering.
“Delivering our initial product innovation plan has been well received by our customer base.
“The focus remains to deliver long term growth within the UK to achieve a sustainable, profitable business and a recognised brand for the Baby Boomer+ demographic.”
AJ Bell Investment Director Russ Mould said: “Direct-to-consumer ready meals group Parsley Box may be ‘encouraged’ by its first half performance but investors don’t seem to be as its losses widened in the six months to the end of June.
“Parsley Box delivers ready meals that don’t need to be stored in a fridge or freezer direct to the ‘Baby Boomer+’ demographic, so people aged 60 and over.
“It’s an area with lots of existing competition and it is unclear exactly what marks the Parsley Box proposition out from other options.
“The company also saw the rate of new customer additions slow as pandemic restrictions were eased and its target market felt more confident about going out to eat.
“While Parsley Box is pleased with the response to its launch of chilled ready meals it is questionable whether this will really move the dial and there is a risk that as it looks to shift to higher price points it loses customer who are turned off by the increased cost.
“With the shares having nearly halved on the 200p at which they floated in March, Parsley Box has a lot to do to generate investor appetite for its story.”