Parsley Box shares tumble despite jump in sales as losses deepen

Shares in over-60s food delivery business Parsley Box have fallen further today after it reported deepening losses and a slowdown in new customers numbers.

The newly listed company, which had an underwhelming debut on the junior AIM market at the end of March, has seen shares almost halve in price since.

Priced at 200p at its market launch, shares were today trading at 103.3p, after falling 15 per cent in the wake of its latest trading update. 

Rising sales: Parsley Box delivers ready meals direct to the ‘Baby Boomer+’ demographic

Parsley Box, which delivers ready meals that generally don’t need to be stored in a fridge or freezer direct to the ‘Baby Boomer+’ demographic, reported pre-tax losses of £5.4million for the first half, up significantly from £1million a year ago. 

This included costs of £1.1million associated with its March IPO.

The company, which was only founded in 2017, also spent £1.2million on TV advertising campaign to build brand awareness. 

Revenues rose 26 per cent to £14million, driven by a 76 per cent increase in active customers to 177,174.

However, Parsley Box said the rate of new customer additions slowed down as pandemic restrictions were eased. 

Still, the company seems to have a stable following, with orders from returning customers growing by 38 per cent to 256,089.

Repeat customers also spent a little more, with the average order increasing to £43.30, from £40.24 in the first half of last year. 

As a result, revenue from repeat orders, which the company says is ‘key to driving long term profitability’, grew by 48 per cent. 

Halved: Parsley Box listed on AIM at the end of March at 200p, but shares today are worth 103p

Revenue from new customers declined by 20 per cent given the tough comparatives provided by Covid. 

Parsley Box offers a menu of over 60 dishes, all in single portions, including cottage pie, lamb hotpot and lasagne, with meals at an average price of between £3 and £4. They also sell desserts, cakes, wines and spirits. 

It recently launched a range of chilled ready meals, which it said was well received by customers and will help it deliver further growth in the second half. 

AJ Bell investment director Russ Mould seems a bit skeptical about the company’s future.

‘It’s an area with lots of existing competition and it is unclear exactly what marks the Parsley Box proposition out from other options,’ he said. 

And added: ‘While Parsley Box is pleased with the response to its launch of chilled ready meals it is questionable whether this will really move the dial and there is a risk that as it looks to shift to higher price points it loses customer who are turned off by the increased cost.

‘With the shares having nearly halved on the 200p at which they floated in March, Parsley Box has a lot to do to generate investor appetite for its story.’ 

This post first appeared on Dailymail.co.uk