Parsley Box has reduced its headcount by nearly a third as the ready meal delivery company grapples with a decline in online shopping volumes amid the cost-of-living crisis.
The Edinburgh-based company, which caters to consumers over the age of 65, narrowed its losses in the first half of this year despite a slump in revenues from both new and existing customers. It cut marketing spending by more than half on the same period a year earlier, while employee numbers fell from 120 to 90.
Chief executive Kevin Dorren said directors are reorganising the business to balance cash consumption against current revenue run rates. This is aimed at preserving money from a £5.9 million fundraising completed in March, which left the company with £5.3m in cash as of the end of June.
Higher energy costs have led suppliers across the industry to reduce their credit terms, posing a “significant challenge” to managing working capital. Parsley Box does not produce the food it sells, relying instead on manufacturers to make meals to its specifications.
READ MORE: Shares in Scotland's Parsley Box hit record low after revenue downgrade
Mr Dorren remained positive about the company’s long-term prospects, saying it is now in a better position to withstand these macroeconomic pressures.
“As with other retailers, 2022 has been challenging for the company as consumers feel the effects of the higher cost of living,” he said.
“We have continued to invest in product innovation to deliver category expansion with launch of our larger portion and sharing meals to drive into additional meal occasions and more snacks and bakery to increase basket size. We have also introduced the ‘everyday low price’ range of meals at a £2.95 price point to ensure our product range meets the needs of all customers in our target over-65s market, especially those feeling the pressure of increased energy prices.”
READ MORE: Parsley Box chief snaps up further shares
Overall revenues during the six months to the end of June fell to £9.6m from £14m previously. New customer revenue plunged to £900,000 versus £3m the prior year, while revenue from repeat customers dropped from £11m to £8.7m.
The previous year’s pre-tax loss of £5.4m was cut to £2.8m. Underlying losses for the full year are expected to be in the region of £4.1m, with revenue levels holding steady in the first 10 weeks of the second half.
Shares in Parsley Box, which have lost 90% of their value in the past year, closed unchanged yesterday at 9.75p.
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