The Marley Spoon AG (ASX: MMM) share price could be on the move today after the meal kit provider released a promising half year result.
How is Marley Spoon performing?
At the end of the first half Marley Spoon's revenue had grown by 55% on the prior corresponding period in constant currency to €61.4 million (~A$101 million). This means that the company is now operating with an annualised revenue run rate of >A$200 million.
This impressive revenue growth has been driven by strong repeat customer orders and a 38% year on year increase in active customers to 172,000. In respect to the former, approximately 91% of the company's revenue was the result of repeat customer orders.
In constant currency, during the half Australian revenue increased 44%, U.S. revenue surged 86% higher, Europe revenue grew 20%, and Global revenue lifted 52%.
The release explains that Marley Spoon's marketing strategy is designed to support sustainable long-term revenue growth by attracting new customers at consistently attractive unit economics and retaining loyal high-value customers. Pleasingly, this is starting to show in its results, with its marketing spend as a percentage of revenue decreasing from 32% a year ago to 29% in the first half of FY 2019.
This led to the company's EBITDA margin improving from -36% to -28% during the first half. Furthermore, by the end of the second quarter the company's EBITDA margin improved to -16%, which management believes "demonstrates the Company's progress towards profitability as revenues continue to grow." It expects to be profitable on an operating EBITDA level by 2020.
One way it expects to achieve this target is through its strategic alliance with Woolworths Group Ltd (ASX: WOW) in Australia. This alliance is expected to drive growth and synergies in the Australian market.
Marley Spoon CEO Fabian Siegel said: "We are operating in a high growth category that is just starting to switch from offline to online shopping. To capture this opportunity, we are building the infrastructure and laying the foundations for a large, globally operating, direct-to-consumer brand business. Our first year as a public company was an important milestone in this journey and we look forward to continued growth ahead."
