Savvy investors who picked up shares in online meal kit delivery Marley Spoon AG (ASX: MMM) would be laughing all the way to the bank right now. Since the beginning of 2020, Marley Spoon shares have gained a whopping 686%. Surging from just $0.35 to the current price of $2.78 in under 18 months. At one point in August of last year, they even touched an all-time high price of $3.80.
What was behind the share price gains?
Marley Spoon was uniquely suited to meet the demands created by lockdowns and pandemic anxiety. The company is essentially a grocery delivery service with a twist. Customers can log on to Marley Spoon's online platform and select from a list of meal options each week. Marley Spoon then delivers a box containing the recipes and pre-portioned ingredients required to cook them. The company aims to cut down on food waste while promoting healthy eating and home cooking.
When government-imposed lockdowns confined people to their homes and forced restaurants to close, Marley Spoon saw a rapid rise in new customers. The Berlin-based company operates in many geographies that had major COVID-19 outbreaks and strict lockdowns in 2020. This included parts of Europe and North America. A company that delivered fresh ingredients right to your doorstep seemed like a much better alternative to anxiety-inducing trips to the supermarket during a global pandemic.
Recent financials
Marley Spoon recently released its results for the 12 months ended 31 December 2020, in which it reported a huge surge in revenues. The company's net revenue doubled in 2020 (to EU$254 million), driven by an 83% year-on-year increase in active subscribers.
The US geography led the charge. Net revenues there jumping 133% year-on-year on a constant currency basis to EU$127 million. It now makes up the bulk of Marley Spoon's total net revenues. With EU$86 million generated in Australia and EU$41 million in Europe.
Operating earnings before interest, tax, depreciation and amortisation expenses (EBITDA) also increased markedly year-on-year, from -EU$29.8 million in FY19 to -EU$0.5 million in FY20.
Outlook
2020 may have been something of a one-off particularly in terms of paradigm-shifting growth rates. However, Marley Spoon still sees plenty of room to expand. The company estimates the global grocery market to be valued at $7 trillion. Online penetration, however, has so far only reached 3% to 4%.
Marley Spoon forecasts revenue growth of between 25% and 30% for FY21 (which would mean a result somewhere between EU$318 million and EU$330 million). Investment priorities over the next 12 months will be focused on extending Marley Spoon's product range, beefing up its fulfilment centre capacity, and improving its digital platform.
Shareholders will be hoping that continued good stewardship by management will translate into further gains in the Marley Spoon share price.
