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The Australia-based, The Food Revolution Group Limited (ASX:FOD) is a consumer staples industry player that is engaged in the food processing business and manufacturing of a range of high-quality juices, fibres, infused fruits and fruit waters for sale to the domestic and international markets.
On March 20th, 2019, the Group released its Investor Site Visit presentation touching upon multiple aspects of the business including the sale of the Better for you range of products through all major retailers - Coles, Woolworths, Aldi & IGA. The expansion drive into China is also progressing with distribution agreement being signed with leading Chinese distributors. The Group also has a high-quality supply chain with 80% of annual volume under contract to its growers at the backdrop of the functional food & beverage markets estimated to grow at an exponential rate as consumers seek healthier options.
During the half-year ended December 31st, 2019, FOD welcomed its new major shareholder and Chairman Norman Li which significantly enhanced the financial strength and international distribution capabilities. On March 8th, 2019, the chairman agreed to advance $ 1.89 million to FOD via a bridge funding as part of the remaining $ 16.74 million of his $ 20.25 million subscription agreement commitment. The remaining three tranches will be extended in the upcoming months as scheduled until the last lot is released on March 5th, 2020. Besides, new deals were signed with some key Chinese distributors including Careline, JJ Global and an MoU with Sinopec, one of the largest Oil and Gas companies in the world with over 35,000 convenience stores. The Group also reported continued strong growth in sales of Kombucha across the Australian domestic market. Going forward, there is a strong pipeline of opportunities to be explored.
Currently, FOD is upgrading the Mill Park processing facility to enable the production of high-end, high-margin and high-volume products that will allow for better financial metrics, increased volume and product diversification to meet high-demand from China.
The Group also announced that existing shareholders, directors and high-quality Australian wealth managers have participated in an off-market block trade of 35 million shares, facilitated by Taylor Collison. The multi-award-winning fund manager SG Hiscock would now be a substantial shareholder in the Company.
As per the interim financial report for the half-year ended December 31st, 2018, the Group recorded revenue from ordinary activities at $ 15.05 million, and the net loss attributable to members stood at ~ $ 3.44 million. Besides, the net sales of branded products increased by 1% to $ 7 million year-on-year. The statutory EBITDA was posted at ~ $ 2.74 million. At the end of the period, the net cash and cash equivalents amounted to ~ $ 1.734 million with net cash outflows from operating (~ $ 1.01 million) and investing activities (~ $ 960.4k) while net cash inflows from financing activities (~$ 1.844 million).
FOD has a market cap of AUD 47.27 million. At the time of trading on March 20th, 2019, the FOD stock closed at AUD 0.095 with ~ 3.11 million shares traded.
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