Maggie Beer Holdings Limited manufactures and sells food and beverage products in Australia. It operates through two segments, Maggie Beer Products and Hampers & Gifts Australia. The company provides pates, fruit pastes, jams, sugo, sauces, wine, and other products under the Maggie Beer brand; and hampers and gifts under the Hamper Emporium and Gifts Australia brands. The company was formerly known as Longtable Group Limited and changed its name to Maggie Beer Holdings Limited in July 2020. Maggie Beer Holdings Limited was incorporated in 2000 and is based in Tanunda, Australia.

Australia

Maggie Beer Holdings Limited

Consumer Cyclical

The company pays dividends on rare occasions. There have only been a few years with dividend payments in the past ten years. Dividend per share (DPS) has grown yearly, but the dynamics are unclear. In the past 12 months, the dividend yield has barely been above zero and was substantially below that of its peers. At the same time, the average five-year yield has been significantly higher and exceeded nearly all its peers. 

MBH.AX reported revenue of AUD 30mn in the last 12 months, down 69% from FY23. At the same time, the dynamics of cash flow, as measured by free cash flow (FCF), were drastically different. EPS grew 50% from FY23 to AUD -0.06. Market expects EPS to reach AUD 0.03 in FY25.

The stock's performance has been mixed in the past six months, with growth following a decline. There is no clear price trend compared to its global peers from the same sector and industry (as shown above). It has underperformed this peer group by 10ppts over six months and grown 0ppts slower in the past month. This is largely true for peers from the same country and sector. With respect to the stock's valuation against its peers, its overall price performance is neutral.

The company has reported very poor EBITDA margins compared to its global peers in recent years. EBITDA margin amounted to -24.5% in the last 12 months, a decline from 4.9% in FY23. 

Historically, MBH.AX has reported very poor net margins compared to its global peers. Specifically, in the last 12 months, this metric equalled -31.6%, down from 0.5% in FY23. 

Maggie Beer Holdings Limited reported a return on equity (RoE) of -52.9% in the last 12 months, down from -42.3% in FY24. The market consensus projects an RoE of -136.0% in FY25, again behind its peers. 

In the last 12 months, the return on capital employed (RoCE) declined to -50.1%, below the peers. The consensus estimate for FY25 for RoCE is -127.6%, again behind the peers. 

Another important profitability metric, return on assets (RoA), amounted to -37.9% in the last 12 months, a decrease from -32.2% in FY24. The market analysts predict that RoA will be -97.3% in FY25, again weaker than its peers. 

The ratio of return on invested capital (RoIC) to the weighted average cost of capital (WACC) has been -4.2 in the past several years. This ratio implies a fragile shareholder value creation. 

The institutional, legal, and compliance risks associated with the company's country are minimal. In combination with stringent business standards, shareholder rights are very highly protected.

MBH.AX has very poor trading liquidity. It will take considerable time for the average private investor to sell a common position under normal market conditions. Liquidity is very unstable and becomes extremely unfavourable on the days with the lowest activity. The trading volume mostly stays the same even under highly turbulent market conditions. Another factor to consider is the substantial number of days with zero trading volumes, i.e., without any ability to sell a position. The stock has a tiny market capitalisation, which usually makes its trading liquidity erratic and unpredictable. 

No other major risks have been identified.

The risk of default is high. Among the negative credit factors, we point to weak positions in its industry, slow historical revenue growth, bleak profitability, negligible return on capital, and inadequate interest coverage. We note low margin volatility and an favourable capital structure, among the positive credit factors. 

In highly turbulent market conditions, MBH.AX is exceptionally volatile. In other words, the stock will be among the worst-performers in times of extreme market volatility or shocking company news. Standalone, the worst-day losses (less than 1% of the time) will likely be critical. 

In normal market circumstances, MBH.AX is exceptionally volatile. Put differently, without outstanding market volatility or shocking company news, the stock's price will change quite unpredictably. The stock's losses on its worst days (less than 1-5% of the time) will range from critical to immense. 

From both historical and forecast perspectives, the stock is underpriced compared to similar stocks. Specifically, the stock is 'cheap' on P/E, overpriced on P/FC. 

Maggie Beer Holdings Limited

A$ 0.06

3

Maggie Beer Holdings Limited

A$ 0.06

3

Risk factor

Profitability factor

Risk / Profitability

Risk factor

Profitability factor

A$ 0.06

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