The My Food Bag share price has been on a downward trend since its listing on the NZX in March 2021. Photo/Supplied
Analysts are still looking for a catalyst to lift the share price performance of meal kit company My Food Bag, but new leadership could be a step in the right direction.
On Friday the
The NZX-listed company announced that it had received the resignation of chief executive Kevin Bowler and that his last day with the company would be October 14.
Chief Financial Officer Mark Winter will act as interim CEO following Bowler’s departure.
The news sent My Food Bag shares up slightly – the stock closed up 3c or 4.7% to close at 67c on Friday.
Hobson Wealth investment strategist Ed Glennie said news of Bowler’s resignation was “understandable” but came as a bit of a surprise.
“I think the word seems to be that people think it’s Cecilia Robinson who arrived recently [and] maybe pushed for it,” Glennie told the Herald.
A leadership change could be seen as “a step in the right direction” for My Food Bag, he said.
My Food Bag co-founder and former chief executive Cecilia Robinson joined the board last month, following the resignation of Waterman Capital chief Chris Marshall.
Robinson co-founded the Auckland-based company with her husband James Robinson, Theresa Gattung and celebrity chef Nadia Lim in 2012. She served as the company’s chief executive until 2018 before the company went public.
Glennie speculated that perhaps Robinson’s return to the fold was “shaking things up”.
Robinson is currently chief executive of healthcare startup Tend Health. However, she remained passionate about My Food Bag and how the company can make a dent in the $22 billion grocery business.
James Robinson previously said in an interview with BusinessDesk that their biggest regret was selling their stake in 2016. That’s when Waterman Capital got involved before taking the company public last year. .
However, Cecilia Robinson told the Herald today that neither she nor James have any plans to run for CEO.
“In addition to Tend and the governance positions we hold, we have a busy schedule,” Robinson said.
“We are very careful to only take on what we can be 100% invested in. We therefore have no intention of nominating either of us for the position of CEO. , I will be part of the nomination process (along with the other directors) for a new CEO and continue to assist the company as a director with a particular focus on marketing and growth.”
My Food Bag listed on the New Zealand Stock Exchange in March 2021 and the company’s share price has been on a downward trend ever since. The shares were sold in an IPO at $1.85 a share, but listed at $1.74 before continuing to fall despite the company hitting its financial guidance in the prospectus.
Lately though, the business has been hit by inflation, especially in ingredient and labor costs.
Glennie said that right now, My Food Bag “lacks the catalyst” to reverse the stock price.
“If they announce the arrival of a high profile CEO – even someone outside the supermarket business would be interesting – if they pull a hire out of it, that would be a real signal that they are serious.”
He said My Food Bag still appeared to have institutional knowledge backing from Milford Asset Management, which participated in the IPO, but one problem was that Waterman still had a stake “hanging in the market”.
“If a large stake were sold [by Waterman] with the arrival of a new CEO, that would definitely be a positive catalyst, but you can’t really see that happening in the current environment.”
Milford Asset Management has been contacted for comment.
My Food Bag reported net income of $20 million after tax and revenue of $194 million in fiscal year 22. The company met its guidance and paid dividends of 7 cents per share for the year. However, its share price failed to thrive.
Glennie said he could understand why Bowler quit, although he wasn’t sure if it was of his own volition or the result of pressure.
“Even though they followed the guidelines, met and paid the dividend, which they said they would do, the stock just doesn’t seem to be pausing.
“As CEO, I can imagine that would be quite frustrating.”
Bowler has not announced what he will do next. He said he was sad to leave but felt the time had come.
Chairman Tony Carter said Bowler successfully led the company during the Covid-19 pandemic, which posed several significant challenges, such as increased health and safety risks, supply chain disruptions , periods of rapid growth and high inflation.
“It has been a difficult time for My Food Bag and despite this, with Kevin’s leadership, the business has performed well, transitioned to a publicly traded company and is investing for the future.”
The My Food Bag council begins a search for Bowler’s replacement.