The delivery heroes!

Food on the Move: FFF’s weekly roundup of listed FoodTech’s movers & shakers

Second week in three in which risers in FFF’s listed FoodTech space have outnumbered fallers – 24 risers, 23 fallers and two non-movers.  A sign of better times ahead? Or a symptom of today’s volatile markets? Only time will tell…

Has to be said Food on the Move would have been reporting another down week in terms of the winner/loser ratio were it not for the food delivery sector chipping in with seven risers – MissFresh (MF) +38%; Just Eat Takeaway (TKWY) +20%; Deliveroo (ROO) +11%; Delivery Hero (DHER) +7%; Ocado (OCDO) +6%; DoorDash (DASH) +5%; and Ride On Express (TKS:6082) +3%.

No news out from top performer MissFresh, but last week’s Food on the Move, ‘A week is a long time…in FoodTech’ did report that the Chinese fresh-food retailer was carrying out ‘an effective one-for-thirty reverse share (ADS) split.’ Now, it is not unknown for companies carrying out stock splits or the opposite (consolidations) to see their share prices whipsaw in both directions.  Right on cue, this week’s 38% rise comes hot on the heels of last week’s 40% fall…

No news flow shortage elsewhere in the sector though.  TKWY’s Q3 update went down well. CEO Jitse Groen’s opening remarks provide reason enough for the 20% share price gain: “After two years of significant investment following the merger and the pandemic, I am pleased that Just Eat Takeaway.com has returned to profitability earlier than anticipated.”

ROO on the other hand warned sales growth would likely be towards the lower end of guidance as customers cut back on takeaways in the face of the cost-of-living crisis.  Not exactly a textbook release for generating an 11% share price gain.  What was, however, was the earnings forecast upgrade thanks to “more efficient marketing expenditure and tight cost control”. ROO also said it remains confident of hitting its 2023/24 breakeven target - further evidence that profitability, and not sales growth, matters most in today’s markets.

Then there was Dash which put out a press release titled: “Introducing Self-Serve Ad Solutions for CPG Brands on DoorDash to Reach New Customers During Everyday Shopping Occasions”.  Bit of a mouthful but the release goes on to say that the new solution is “…designed to give CPGs more flexibility and options to reach nearly every household in America” – investors concluded this can’t be a bad thing.

OCDO meanwhile put out no fewer than four regulatory releases during the week: appointment of a Non-Executive Director; a cash flow modelling seminar to be held in November; admission of 1,000,000 ordinary shares to the market; and CEO Tim Steiner topping up his holding in the company.  Take your pick as to which helped the shares put on 6%.  Full disclosure: the CEO only acquired 38 new shares at a cost of £150 as part of The Ocado Share Incentive Plan – not the biggest incentive then…

Outside the deliverers, shares in Verde AgriTech (NPK) were up a third. The potash fertiliser company has fixed “water issues encountered during construction of improved road access...” CEO Cristiano Veloso commented: “Now we can put all our focus on achieving another year of record production and delivery”.  Music to investors’ ears that.

Only right to mention a few fallers. For the second week in a row, Kalera (KAL) stands out with a 61% loss.  News of plans to divest its ‘Seed Genetics Business and International Assets’ didn’t go down well, even though CEO Jim Leighton expects: “these divestitures will address the strategy we announced in September to bring our US farms to cash flow positive much faster than anticipated while reducing capital requirements…” Maybe the short press release raises more questions than answers.

Not the best of weeks for vertical farmers generally – Local Bounti (LOCL) was down 12.5% while AppHarvest (APPH) was off a much smaller 1.25%.  As the sector is a heavy energy user, soaring power prices have put cash flow models increasingly under the microscope. Profits, profits, profits the order of the day for Mr Market…