‘From bad to worse’: Shares in Parsley Box plummet as the over 60s meal delivery group admits it will need to raise more cash
- Parsley Box joined the AIM market of the stock exchange in March this year
- Group’s share price fell over 16% earlier as it admitted it needs more cash
- AJ Bell expert says ‘the worst performing IPO of 2021 is going from bad to worse’
Shares in over-60s-focused meals delivery group Parsley Box have fallen sharply today after the company revealed it wants to raise more cash via its investors.
The AIM-listed company saw its share price plummet over 16 per cent earlier, but its shares have recovered ground to bring losses to 13.05 per cent, or 5.61p, to 37.39p.
In a statement, Parsley Box said: ‘In order to support its investment plan, Parsley Box intends to raise further funding during Q1.
Top brass: Parsley Box co-founder Adrienne MacAuley, left, with her husband and co-founder Gordon, centre, and chief executive Kevin Dorren, far right
‘Certain members of the Board together with their associates have indicated their intention to invest, demonstrating their strong support for the Company.’
The company said it was on track to deliver full-year revenue marginally over its £25million forecast, representing modest year-on-year growth. It expects to have around £2.2million worth of cash in the bank at the end of the year.
Kevin Dorren, chief executive of Parsley Box, said: ‘I am pleased to announce that we have delivered on our revised 2021 plan.
‘The supply chain issues, widely felt across the food sector, need hour-by-hour focus and Simon’s appointment will allow us to continue providing excellent service to our existing customers, without delaying our longer term plans to deliver a platform for independent living.
‘At the IPO in March, we stated our intention to appoint high-calibre talent to build the right infrastructure for future growth and Simon will play a key part in this. I am looking forward to announcing the investment plan in the new year to outline the next steps in Parsley Box’s development.’
Parsley Box cut its marketing budget by around a third in the second half, prompting order numbers to slip by around 20 per cent.
It added: ‘The lower stock levels impacted average order values for much of the second half, however these have been recovering well in recent weeks as stock availability improves.’
The company has appointed former John Lewis Partnership manager Simon Russell as managing director. He will be responsible for customer service, product development and the day-to-day running of the UK business.
The group’s issue price at its IPO was 200p, giving the firm a capitalisation of over £83million at the time.
Russ Mould, investment director at AJ Bell, said: ‘The worst performing IPO of 2021 is going from bad to worse. Parsley Box is getting ready to go cap in hand to investors to ask for more money to help get the business back on track.
‘The share price has fallen again because the market has taken the view that a troubled company will only be able to raise more money if new shares are issued at a big discount.
‘Parsley Box has been a real flop since listing, with the shares now down 81 per cent since its March IPO thanks to two horrific trading updates.
‘First it said that sales growth had been hit by the end of lockdowns, with consumers having more freedom where to shop and eat. Then it suffered from supply chain problems hitting stock availability.
‘One could draw the conclusion that as a small player it wasn’t seen as a key client for suppliers and so didn’t get the type of preferential treatment which a big player would get in times of crisis.’
He added: ‘Companies like Cook and Wiltshire Farm Foods are thriving from selling posh ready meals to the older generation, so Parsley Box is left fighting for space in what is already a well-served industry.’