Food on the Move: deja vu

FFF’s weekly roundup of listed FoodTech’s movers & shakers

No need to delve too far back into the ‘Food on the Move’ archives to find an intro para that perfectly matches the performance of listed FoodTech during the week ended 16 September 2022 - the 5 September edition, ‘In search of the lesser spotted riser’, reported: “In all, 39 companies were nursing share price falls, while only 9 ended the week in positive territory.”  Two weeks on, it’s a case of deja vu.

The strongest of this week’s nine risers with a 60% gain was Toronto-listed Farmers Edge (FDGE).  The shares, which closed at CAD0.865, still remain a long way off the CAD2.5 level they traded at as recently as June.  Not much in the way of news since August’s Q2 Results during which FDGE’s CEO revealed the “…current focus is to improve our execution and implement cost-saving initiatives to lower our operating costs and reduce our cash burn.” CEO speak for battening down the hatches.

Like FDGE, Goodfood Market (FOOD) posted double-digit gains over the week – a 17.5% increase to CAD1.14. Also, like FDGE, FOOD is Toronto-listed; FOOD didn’t put out any new news during the week and shares in the meal kit and online grocery brand are trading well below April’s CAD3.3 levels, let alone the lofty heights of CAD13 the shares reached in Jan 2021.  Ah those halcyon Goodfood(tech) Market days…

Elsewhere, shares in Deliveroo (ROO) rose 7.5% to 96.84p, despite the online food delivery company announcing its CFO offloaded £80,000 of stock he received as part of a share-based payment scheme.  Perhaps the director sale was overshadowed by news that food from luxury department store Harrods can now be ordered via the Deliveroo platform - the £7 minimum spend requirement shouldn’t be a problem for Harrods’ punters.

Among the fallers, online grocer Ocado (OCDO) shed 11% to 671p after announcing that its joint venture with Marks & Spencer, Ocado Retail, is now expected to post “a small decline” in sales for the year.  Customers are spending less on their weekly shop as the cost-of-living crisis bites.

Meanwhile, Beyond Meat’s (BYND) shares hit a record low of US$18.29 after losing almost a fifth of their value.  No company announcements this week, but the Motley Fool puts the share price volatility down to “high short interest. Currently, it is estimated that 30% of its shares are sold short” – investors betting on further share price falls.  The Motley crew think the plant-based meat substitute producer may have to tap investors for further funds: “The company has burned over $250 million in free cash flow just this year, and with less than $500 million in cash on its balance sheet, it looks like management is going to have to raise more funds soon.”  Not beyond the realms of possibility then.

Finally, tough week for vertical farmers AppHarvest (APPH), CubicFarmSystems (CUB), Kalera (KAL) and Local Bounti (LOCL) - share prices were down 22%, 18%, 39% and 24% respectively.   Of the three, CUB was the most active in terms of news flow, announcing a ‘US$6.25 Million Senior Secured Term Loan’ and ‘Additional Cost Reduction Measures to Accelerate Path to Profitability’.  And that is perhaps the nub.  The fab four vertical farmers are all still waiting for profitability to go…er…vertical.