What’s with the Youfoodz (ASX:YFZ) share price today?

After surging 80% last week, the Youfoodz share price is standing still today, despite posting solid quarterly results

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Shares in Youfoodz Holdings Ltd (ASX: YFZ) aren’t finding much traction so far on Friday after the company announced a June quarterly business update.

At the time of writing, the Youfoodz share price is wobbling between its previous close of 91.5 cents and 92 cents.

The standstill comes against the backdrop of its recent 93 cents per share takeover offer from competitor HelloFresh.

Youfoodz share price flat on quarterly update

Despite the Youfoodz share price stalling around the takeover offer price, the company continues to make headway in its financial and operational performance.

In its quarterly update for the period ended 24 June 2021, Youfoodz advised that gross revenue increased 19.5% on the prior corresponding period (pcp) to $53.9 million. This was underpinned by growth across both business-to-consumer (B2C) and business-to-business (B2B) segments.

Youfoodz highlighted B2C orders increasing 16.5% on pcp to 384,683, translating to a strong 25.7% uplift in gross revenue to $37.6 million.

Similarly, B2B performance has been improving, with gross revenues up 7.2% to $16.2 million.

With FY21 coming to a close, the company expects unaudited gross revenue of $203.8 million, hitting the mid-point of its $201 million to $205 million guidance.

In addition, unaudited net revenue should come in at $146.4 million, towards the lower end of its $146 million to $148 million guidance.

And finally, unaudited earnings before interest, tax, depreciation and amortisation (EBITDA) is also expected to be at the lower end of guidance, between $1 million to $2 million.

Youfoodz advised that the development of its new facility continued to progress, with the design finalised and agreed with the landlord. The company has completed early discovery works and submitted relevant development applications.

In addition, the company said that it was “well capitalised to fund its growth objectives”, with a cash balance of $27.4 million as at 24 June.

Management commentary

Youfoodz CEO Lance Giles commented the company’s continued growth, saying:

It is pleasing to see the business continuing to deliver top-line growth. B2C has again performed strongly, delivering a significant uplift in order volumes and revenue vs pcp and on a quarter-on-quarter basis.

Our B2B business, which experienced challenging trading conditions during FY2021, saw an improvement in order volumes and revenues vs pcp and on a quarter-on- quarter basis. This reflected strong customer engagement efforts and range expansion with key retail customers.

About the Youfoodz share price

Youfoodz debuted on the ASX in December 2020 at a listing price of $1.50 per share.

Despite the tailwinds behind the meal kit market, the Youfoodz share price tumbled as low as 37.5 cents in May this year.

The HelloFresh takeover offer saw an 80% surge in Youfoodz shares last Tuesday. Despite that upswing, investors who participated in the company’s initial public offering would still be down almost 40% on their initial investment.

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