Longtable scoops up the rest of Maggie Beer
Written on the 28 February 2019 by David Simmons
After 40 years, one month and nine days Maggie Beer has decided to sell her eponymous food brand.
It has been a long time coming for Maggie who first sold 48 per cent of the brand to Melbourne based food company Longtable (ASX: LON) in 2016.
Speaking to Business News Australia Beer said the decision to sell came at the right point in her life.
"For me it was about having a succession plan," says Beer.
"We have two daugthers who didn't want to come into the business and I'm 74 already, and as much as I will be working in the business over the next two years it is time to wind down a bit."
Beer will continue to work with her brand in product development for the next two years and will be a significant shareholder in Longtable following the listed company's acquisition of the remaining 52 per cent it does not yet own.
She will also continue to work on the Maggie Beer Foundation that is dedicated to improving the quality of food in aged care.
"The part of the business that I'm still involved in is product development, which is the thing that excites me and that's what I'll continue to do, which is all about personal joy," says Beer.
Longtable announced the acquisition in their half year results this afternoon, saying that they have seen considerable success with the Maggie Beer brand since acquistion in 2016.
Beer says she found the perfect partner in Longtable, and she is comfortable with leaving her legacy in the company's capable hands.
"I am very proud of what we've done with Maggie Beer," says Beer.
"I know that my legacy will live on with the people that I have around me and the people that are part of the team at Maggie Beer Products."
Maggie Beer was Longtable's first acquisition back in 2016 when the company was a technology business called Primary Opinion. The company then turned into Longtable and acquired biodynamic dairy business Paris Creek Farms.
In August 2018 Longtable acquired Melbourne's premium inner-city dairy business St David Dairy.
Since Longtable acquired their chunk of Maggie Beer the brand has performed well, encouraging Longtable to go all-in on the investment, according to managing director Laura McBain, former CEO of Bellamy's Organics.
"The Maggie Beer team has successfully managed costs to create a profitable, sustainable business with a very powerful brand that is highly regarded by consumers looking for premium food products," says McBain.
Maggie Beer delivered positive earnings of $1.5 million in earnings and a profit of $0.4 million.
The success of the Maggie Beer brand contributed to Longtable's 1H19 results that were materially impacted by a busy year for the listed company.
The group achieved revenue of $11.1 million and incurred a loss after tax of $4.73 million.
Longtable attributed the loss to the acquisition of St David Dairy, the revitalisation of Paris Creek Farms' products and business model, and the successful turnaround of the Maggie Beer Products investment.
St David Dairy was a standout for Longtable, increasing its customer base by 27 per cent in Melbourne and Sydney and boosting sales by 31 per cent to $3.6 million.
Paris Creek Farms performed poorly thanks to a significant transformation of the brand led by Longtable. This transformation included a brand refresh, new packaging, a new national yogurt range, and raising prices across the product portfolio.
"We have successfully repositioned Paris Creek Farms in terms of the product, packaging and brand," says McBain.
"With access to the largest pool of biodynamic-organic milk in Australia, reinforced by increased milk availability and cost-out initiatives underway, the opportunity remains in converting this milk to value added products coupled with a strong push into new geographic distribution."
"We are actively preparing for our launch in wellness and nutrition for value-added dairy products, including powders."
McBain says 2H19 will be another strong half for Longtable during which more pieces of the business will fall into place.
"We are very focused on driving growth through increasing the distribution and availability of our premium food and beverage products to new customers," says McBain.
"Our entire portfolio of brands and products are on trend, delivering localisation, premiumisation and wellness attributes. They are therefore well placed to grow and underpin Longtable's expansion."
"Having demonstrated success with the turnaround in Maggie Beer Products' financial performance, we hope to finalise our negotiation and purchase of the remaining 52 per cent of Maggie Beer Products we don't already own and bring it fully within our portfolio of premium brands for further grow this leading premium food brand."
Business News Australia
Author: David Simmons