Coronavirus effects give TasFoods Limited a hard time | farm online
Revenues rose but profit margins fell for TasFoods Limited as customer activity and supply chain issues slowed the coronavirus in the December quarter.
The Launceston-based dairy and poultry company said ASX revenue for the quarter was 7% higher than the corresponding quarter a year earlier.
Revenue growth was driven by an 8% increase in sales in the poultry division and a 5% increase in the dairy division.
Even so, the gross profit margin fell by 27 percentage points.
TasFoods said this was due to rising prices for labour, freight, grain and milk.
He said the board and management were continuing to review the supply chain to ensure the best prices available, but that “revenue enhancement strategies” to improve gross profit margin would take some time to develop. improve operational performance.
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“COVID-19 continues to negatively impact the business, with subdued customer activity across all channels, particularly catering and the hotel-restaurant-café channel, and many are also experiencing labor shortages. work,” TasFoods said in a recent business activity report.
“Input costs increased during the quarter, particularly in poultry, as supply constraints further up the value chain are limited.”
He said the company’s new management team has almost finalized a business review and strategy that will help it expand further in the domestic market and the export market in time.
“Supply constraints notwithstanding, our new organic chicken products continue to receive strong customer feedback and new product development focused on sustainable consumer growth trends will be central to TasFoods’ strategy. in the future,” he said.
He said his Betta Milk business is in a highly competitive market sector and continues to face competitive pressures from lower-priced private label brands in grocery stores.
“Betta Milk is a proudly Tasmanian brand and management is actively considering its best fit within our product strategy…,” the report said.
Customer revenue totaled $18.66 million for the quarter.
Net cash outflow from operations increased to negative $2.23 million.
The company had $1.4 million in cash and $2.5 million in unused financing facilities at the end of the quarter.
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The story of TasFoods revenue rising but the hurting coronavirus period first appeared on The Advocate.