TasFoods 4Q24 results landed the company its third consecutive quarter of positive operating cash flows, despite revenue from its poultry operations being down seven per cent on the prior comparable period (pcp), due to an oversupply of mainland poultry and Pyengana Dairy sales dropping 23 per cent for the quarter.
The overall results reflect a company reset that started in 2021, focusing the business on poultry (Nicholas Poultry), cheese (Pyengana Dairy), and pet treats (Isle and Sky).
TasFoods reported $134,000 operating cash flow for the quarter - an $868,000 improvement on pcp it said was driven by cost-efficiency initiatives with “major improvements” in poultry and corporate divisions.
Its indirect costs dropped 25.3 per cent pcp due to cost management strategies and despite persistent challenges in consumer spending and poultry oversupply. While gross margins for poultry remained flat, the company said the Tasmanian market was showing early signs of stabilisation.
Pyengana’s sales drop was primarily due to reduced discretionary spending and lower foot traffic at its farmgate cafe, the company said. Despite this, TasFoods said its growth strategy was progressing, with increased volumes, expanded distribution into Coles, and nearing completion of export accreditation requirements.
Pet snack brand, Isle and Sky, launched in October 2023, recorded a three per cent revenue increase in the quarter and has a range of new SKUs being launched this year. Right sizing the corporate structure has reduced costs by $1.3 million pcp.
TasFoods CEO, Joshua Fletcher, said early signs of improvements in market conditions were evident late in the quarter.
“However, trading conditions are expected to remain challenging into 2025 for food manufacturing companies operating in the domestic grocery, food service, and e-commerce channels. Persistent cost-of-living pressures ad economic uncertainty continue to weigh heavily on both business and consumer confidence,” Fletcher said.
