The Commentator’s Curse

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

It had to happen.  One week on from proposing new stock market adage, “…as Nasdaq goes, so goes FoodTech”, and the US benchmark and FFF’s listed FoodTech space part ways – and not in favour of the FoodTechies. While Nasdaq had a good week, posting a 2.5% gain, FoodTech saw the number of share price fallers exceed risers.  It was a close-run thing though with only three more fallers (26) than risers (23) - a clear win for the fallers nevertheless.  A one-off? The exception that proves the rule? Or just a case of the commentator’s curse striking again? Normal service to resume next week?  Only time will tell.   

Back to the week that was. Top performer with a 36% gain was CubicFarm Systems (CUB).  No news out but interestingly, the shares finished the week at CAD0.75, 50% higher than the CAD0.5 price of the AgTech’s CAD5 million public offering.  Could be a sign that the funding round is going well.  Perhaps, but the company’s last press release on 16 February stated that the public offering would close on or around 23 February.  That date has been and gone and then some.  And yet nothing from management.  Or at least not a squeak by close of play on Friday 3 March. That could be set to change however, for the shares may have finished the week up 36%, but almost all the gains were made on Friday 3 March.  Hmm…does someone know something?  What price a press release in the not-too-distant future…        

The case of the missing CUB press release is not the only mystery around.  There’s another one to get stuck into…Online delivery firms typically move in lockstep, their share prices fall or rise in unison.  One disappointing set of results and the market shoots first and asks questions later – the main question being will others put out underwhelming numbers too.

Time to test the theory.  On 28 February, Ocado (OCDO) unveiled a £501m pre-tax loss for the year ended November 2022, a level almost three times last year’s £177m loss and considerably higher than the £429m deficit the market had been pencilling in.  As the Financial Times reported: “Last year, sales at the UK retail business dropped 3.8 per cent to £2.2bn as shoppers bought fewer items on each visit. Retail losses were £4mn, down from £150mn profit in 2021…Analysts at Shore Capital described the results as ‘awful’, adding that given further losses are expected this year ‘one cannot yet see the rainbow, never mind any pot of gold’.” Cue a 10% fall in OCDO’s share price.

As for the rest of the sector, well not a sympathy share-price fall in sight. The likes of DoorDash (DASH) +4%; Delivery Hero (DHER) +2.5%; Just Eat Takeaway (TKWY) +7%; Deliveroo (ROO) +8%; Grab (GRAB) +6%; and Dada Nexus (DADA) +20%, all posted decent gains.  So, what’s going on?  Just Eat Takeaway’s full year results, that’s what.

Over to CEO Jitse Groen: “In 2022, our priority was to enhance profitability and strengthen our business. As a result, we materially improved our financial performance and generated Adjusted EBITDA of €19 million in 2022 compared with minus €350 million in 2021. We expect a further improvement to Adjusted EBITDA in 2023 and our ambition to create a highly profitable food delivery business is firmly on track.” As reported by Proactive Investors in “Just Eat shares have the potential to double in value says leading bank”, the results prompted Credit Suisse to up its estimates for the stock, reiterate its “outperform” recommendation and also its 4000p share price, approximately twice the current level.  Seems the rest of the sector chose to follow TKWY’s lead rather than OCDO this week.  Shame FoodTech didn’t do the same and follow the Nasdaq’s lead…