Youfoodz becomes ASX’s latest food delivery stock, but drops 20pc+ on debut
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Youfoodz (ASX:YFZ) has joined the growing tribe of food delivery stocks on the ASX, but it didn’t have a happy debut.
The Brisbane-based company, which was founded in 2012, produces and delivers ready-made meals. Across its three production facilities it makes 350,000 ready-made meals per week and employs 460 people.
Youfoodz estimates the market for ready-made meals was $3.2 billion at retail prices in FY20 and since FY16 has increased as a compound annual growth rate of 11.3 per cent.
In FY20 the company had 268,000 active customers who placed over 1.1 million delivery orders and is forecasting $149.9 million net revenue in FY21.
Youfoodz raised $70 million at $1.50 per share. At market open, shares fell to $1.16 per share – a decline of over 20 per cent.
Youfoodz is only the third ASX stock involved in food delivery.
While Dragontail shares have flatlined for much of 2020, Marley Spoon rocketed over 1400 per cent from 23 cents to $3.55 as demand for its services exploded thanks to consumers being stuck at home and not being able to eat out.
Despite dropping since the Pfizer vaccine news, it is still up over 700 per cent, at just over $2 per share.
Nevertheless, Marley Spoon only makes meal kits with some assembly required, while Youfoodz makes ready-made meals which typically only require microwave heating.
Youfoodz is also the second food IPO on the ASX in 2020 following organic food company Forbidden Foods (ASX:FFF).
Forbidden listed in September and is currently sitting 50 per cent up from its IPO.