Food on the Move: FFF’s weekly roundup of listed FoodTech’s movers & shakers
Is Mr Market getting into the festive spirit? Too early to call maybe, but December has at least got off to a positive start – the week ended 5 December 2022 saw 27 share price risers, 21 fallers, one non-mover and a partridge in a pear tree! Too early for carols perhaps…
Spoilt for choice in terms of risers, but top of the Christmas tree (still too early?) was GoodFood Market (FOOD). Shares posted a 55% gain to finish the week at $0.495 after the meal-kit delivery co.’s Q4 and full year numbers went down well with investors. FOOD may have reported a 37% decrease in net sales to $50 million for the quarter compared to Q4 2021, but gross margins increased 5.4% to 28.3% which in turn fed through to an 89% increase in adjusted EBITDA to $2 million compared to last year’s $18 million Q4 loss.
The co.’s focus on profitability seems to be paying off: “…we are building a focused business with a disciplined cost structure. Our primary objective is returning to a positive and growing Adjusted EBITDA1 position in the first half of 2023 to drive positive cash flows, and to achieve long-term profitability,” said CEO Jonathan Ferrari. Music to the ears of investors in today’s markets, along with a carol or two of course.
Dada Nexus (DADA) continued its stellar run – shares added another 48% to close at $6.88, more than twice the $3 level they were trading at as recently as 9 November. The turnaround for ‘China’s leading local on-demand delivery and retail platform’ was triggered by a strong Q3 earnings report as reported by Food on the Move: Grand Old Duke of York Syndrome. No news out this week to explain the share price rise, but The Motley Fool believes that “…some tempering of anti-COVID restrictions in a carrot-and-stick approach” may be behind the rise as this could be “a sign that China's government may be relaxing its zero-COVID policies…and that's likely to be good for business if the government keeps moving in this direction.” DADA be it then.
Elsewhere, AgriFORCE Growing Systems (AGRI) put on 18% after the agtech called “a special meeting of shareholders, to approve share issuances in connection with the previously announced purchase of food processing technology from Manna Nutritional Group, acquisitions of the Stronghold property and Delphy Groep BV, as well as the recent debt financing transaction”. Christmas come early for AGRI investors.
Only right to mention a faller or two. Sense of deja-vu for ASAP (ASAP). Shares in the food delivery company, formerly known as Waitr, shed a further 37% having lost 38% the previous week on the back of a 1:20 reverse stock split. Only news out this week was the unveiling of “a national food delivery agreement with Chipotle Mexican Grill (NYSE: CMG). Effective immediately, ASAP.com will begin delivery from Chipotle restaurants in many markets.” Assume the share price fall was a further reaction to the stock split, rather than any verdict on Chipotle’s offering…
AppHarvest (APPH) was off another 22.5% – appears sentiment continues to be weighed down by APPH’s warning at the time of its Q3 numbers in November: “Management believes there is substantial doubt about our ability to continue as a going concern”, as reported by the Lexington Herald Leader in “Once called ‘future of farming,’ AppHarvest discloses ‘substantial doubt’ about its future”.
Not all bad news for the vertical farmers though. Kalera (KAL) closed up 16% after announcing it “has decided to initiate the restructuring of its German subsidiary, Kalera GmbH (f/k/a “&ever”) through a court-supervised process.” CEO Jim Leighton provided some context: “We continue to execute on our commitment to bring Kalera to cash flow positive…The divestiture of our international business is one of the key steps in this process, and we are confident that we will make progress on this and other key cash flow initiatives by year-end. The opportunities for Kalera in U.S. vertical farming are vast, and we remain focused on long-term profitable growth.” Mixed salad bag for the vertical farmers then.