Maggie Beer takes a backseat as Longtable focuses on Paris Creek acquisition
Health & Biotech
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Longtable — the food business lead by former Bellamy’s boss Laura McBain — is moving on from Maggie Beer and looking to its recent Paris Creek acquisition to boost revenue.
Longtable’s 48 per cent investment in chef Maggie Beer’s eponymous business has been reduced to a footnote while recent purchase Paris Creek takes precedence in the December half-year results.
The company (ASX:LON) made a $3 million loss in the six months to December, compared to a $224,000 loss in the same period in 2016.
The shares fell 12 per cent to 3.8c on Tuesday after a price surge on Monday which resulted in an ASX query letter. The market cap is about $104 million.
Maggie Beer made a $251,000 loss, of which Longtable had to eat a $120,000 slice thanks to its shareholding.
“Lower gross profit margins caused by the slower-than-expected roll-out of Metcash distribution, sales product mix being skewed towards products with lower margins, and increased spend in promotions,” Longtable said of the Maggie Beer business.
Before the name change to Longtable, the company chopped $8.5 million off the value of Maggie Beer last August.
Primary bought 48 per cent of the legendary Aussie chef’s business in July 2016 for $15 million.
Just a year later, new chief executive Laura McBain wrote down the value of the investment to $5.5 million.
Now Longtable is focused on its recent purchase of Paris Creek — Australia’s biggest biodynamic and organic dairy business.
“The trading results of the eight days of ownership of Paris Creek showing a profit of $7000,” Longtable said in its results.
“The company remains very pleased with its acquisition of Paris Creek. The immediate focus is transitioning the business from its family owned roots to a sophisticated business model.”
Longtable believes Paris Creek has “great opportunities” in Asia and particularly in China, but says they are focused on growing in Australia first.
Stockhead noted considerable levels of discussion around the stock on social media on Monday, anticipating good half-year results and comparing the company to other milk stocks such as Bellamys (ASX:BAL) and Bubs Australia (ASX:BUB).