Pure Foods Tasmania (PFT) says its 3Q24 results should be viewed “through the prism of major restructuring” that was focused on “tight capital management, cost reduction, and product rationalisation”. PFT has also announced a capital raise.
PFT’s portfolio includes Woodbridge Smokehouse, Tasmanian Pate, Daly Potato Co, Pure Tasmanian Seafood, The Cashew Creamery, and New Pastures.
It sold Lauds Plant Based Foods in the December quarter and was also undertaking a “comprehensive” product rationalisation. This was instigated due to the “unprecedented and unsustainable” order demand from major retail customers in the lead up to Christmas, which impacted the cost of production, particularly in its Daly division.
MD and CEO, Michael Cooper, said, “Q3 FY24 was a challenging quarter for Pure Foods with high demand for labour intensive products. We made the decision in February to cease production of some of these products as it was too labour intensive and therefore unsustainable.
“We have pivoted our Potato & Gravy range away from the Hot Box section of the retailers stores into the chilled take home section. We found in the Hot Box section, staff found it hard to manage cook times to ensure the product was available at the right times of the day and this led to high wastage and markdowns which PFT was required to support.
“We are confident the product will be better placed in the chiller section since we have improved shelf life to 28 days and the ready-to-eat-meal category is still growing strongly. We believe this is a good opportunity for Potato & Gravy.
It was very positive news to see our Bacon & Dijon 400gm Salad being ranged into Queensland Woolworths stores. This is the first time Daly Salads have been available in Queensland which has one of the highest consumption of salads in the country.
We are also working on new product development with two new products to be launched in Q4 and we continue to review a number of acquisitions and have completed preliminary due diligence on one target in Q3. Considerations for any acquisition is scale and positive contribution to earnings.
PFT said its $2.2 million capital raise would fund working capital and new capital investments. It would also be used to repay short term borrowings and finance ongoing due diligence on several acquisition targets.
