My Food Bag clarifies CEO comments amid FMA scrutiny ahead of IPO

My Food Bag has had to backtrack from statements its chief executive made about the company’s financial prospects ahead of its initial public offer amid concerns they may have run counter to market regulations.

At issue are comments reportedly made by Kevin Bowler in a BusinessDesk story headed “My Food Bag will outperform IPO forecasts, says chief executive”.

In response to questions about the company’s growth prospects in light of the IPO Product Disclosure Statement forecasting a small decline in revenue and delivery volumes in the 2022 financial year, Bowler is reported to have said:

“We’ve got a business plan that we think will outperform that but didn’t want to put a PDS [Product Disclosure Statement] into the market that is indicating numbers that had risk in them.”

Late yesterday My Food Bag chairman Tony Carter issued a statement in a quest to clarify Bowler’s comments.

“The board believes that the prospective financial information contained in My Food Bag’s product disclosure statement datedFebruary 11, 2021 (PDS) has been prepared with due care and attention, and considers the assumptions, when taken as a whole, to be reasonable at the time of preparing the PDS.

“My Food Bag is confident that it will achieve its prospective financial information, but any suggestion that the business will outperform those financial results should be disregarded,” Carter said.

BusinessDesk had removed the article from its website last night.

Earlier, a spokesman for the Financial Markets Authority told the Herald that the regulator had contacted the company in relation to the comments.

“We are engaging with My Food Bag regarding certain comments reported in the media as being made by its CEO and, more generally, whether My Food Bag is comfortable with information in the public domain relating to its offer of shares. We note that the offer is registered but will not open to investors until 19 February.”

The spokesman noted that prospective issuers are required to ensure that any comments they make in relation to their offer are materially consistent with their PDS.

“Issuers must be careful not to make any statements that may confuse investors, and must ensure that statements they do make do not breach the ‘Fair Dealing’ provisions in the Financial Markets Conduct Act (i.e. information cannot be unsubstantiated, misleading or deceptive, including via omission).

My Food Bag last week released its PDS outlining a $342 million IPO through the sale of up to 185 million shares implying a valuation of $448.5m.

Selected financial information shows strong revenue growth up until the 2022 financial year when total revenue is forecast to decline slightly from $189.5m to $186.4, while growth remains strong at ebitda level.

My Food Bag’s offer includes 155.3m existing shares (64.1 per cent of the company) and 29.6m new shares priced at $1.85 each.

The offer price implies an earnings ratio of 22.4 times its forecast 2022 financial year earnings and a gross dividend yield of 5 per cent.

Last week Carter said the sharemarket listing would provide the business with flexibility to pursue its growth strategy.

“Our growth will be underpinned by continued leadership in the meal kit market and expanding our food-based offerings to align to consumer trends,” he said.

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