Food and beverage company Longtable Group (ASX: LON) has provided an interim update to the market and its shareholders regarding its most recent activities with respects to its trio of leading brands St David Dairy, Maggie Beer Products and Paris Creek Farms.
The Melbourne-based company said it is committed to building upon its position as the “preeminent premium food portfolio in Australia” through a combination of strong revenue numbers, strong customer engagement and positive developments with regards to new product development across its range of food and beverage brands.
Longtable said that it is focused on executing its existing market strategy and has forecast a “positive indicative first quarter in FY 2019.”
One overarching factor which could potentially serve as a valid insight into future performance is recent management-level stock purchases.
Longtable director Tom Kiing recently acquired $447,000 worth of LON shares on the market and Tony Robinson a further $40,382.
St David Dairy
The milk business was acquired by Longtable in August this year with “strong sales performance” and triple-digit improvements being recorded since the buyout.
Longtable has announced that its quarterly revenue grew by a healthy 33% compared to the same time last year and attributed the outperformance on an increase in customers and strong demand for all its products.
The brands’ milk sales increased 18% and butter sales more than trebled in the first quarter.
“Our distributor in Sydney is increasing both distribution and product penetration, focusing on high-end restaurants and cafes. This lays the beachhead for the development of a physical presence in Sydney that will grow sales further by connecting consumers to a localised brand,” the company said.
There was further good cheer for its milk brand after Longtable confirmed that milk supply for its Fitzroy operations continued to meet demand and that its farming partner had recently raised its herd size – a potential validator for growing demand within the industry.
“We expect St David to deliver strong, consistent EBITDA margins to the business, and we remain positive in its outlook,” according to Longtable.
Maggie Beer Products
In a similar vein to its milk business, Longtable’s Maggie Beer business recorded a profitable quarter and “outperforming management expectations” according to Longtable.
In the first quarter of the new financial year, Maggie Beer showed a strong turnaround and delivered a profitable EBITDA, driven by a combination of modest sales increases and a focus on cost reductions across all areas of the business.
The premium food company said it Maggie Beer products launched in June last year are proving a hit with consumers and delivering pleasing results, both in revenue sales but also in terms of engagement with retailers regarding new product development.
Longtable said that “whilst it is still early in the financial year, the first quarter results provide confidence in the strategic direction and execution by the Maggie Beer Products team.”
Paris Creek Farms
Longtable has said its Paris Creek Farms has just finished undergoing a “brand, packaging and pricing reset” with the aim of reinvigorating the brand and raising retail recognition.
The commercial results achieved so far suggest that Longtable’s strategy is working with net sales from Paris Creek Farms totalling $4.2 million in Q2 2018. The company added that sales for the quarter were predominantly for the “old range” of products which reflected a “temporary de-stocking” phase that would soon make way for new lines with major retailers.
Longtable commenced the makeover 2 weeks ago in South Australia which meant Paris Creek Farms products were placed across Woolworths, Coles and other independent stores.
The final phase of its makeover is set to take place in South Australia next week with Paris Creek milk to be launched in Coles stores across the city.
Furthermore, Longtable has confirmed it intends to build on the momentum generated by its South Australian relaunch by commencing nationwide sales “over the next two weeks.”
Working with its distribution partners Distributors and Metcash, Longtable said it will use Paris Creek Farms to raise its commercial footprint from a current level of 150, to target a total of 750 stores across Australia’s eastern coast, and in particular, high premium, high-end supermarkets and banner groups.
“South Australia is an important part of our sales strategy with 75% of our sales in this State. We have strong distribution in South Australia with more than 80% penetration, and we anticipate that the launch of the new Paris Creek products will drive additional stores and broader product distribution in existing stores,” the company said.