Australian Maggie Beer Holdings has reached an agreement to sell its dairy subsidiary, Paris Creek Farms, to local group Katoomba Global Foods for A$500,000 ($325,710).
In its stock exchange filing, Maggie Beer Holdings stated that this sale aligns with its “objective to dispose of non-core assets and simplify the operating structure.”
Furthermore, the company emphasized that this deal supports its “broader strategy to streamline its portfolio, reduce complexity, and enable targeted investment in high-growth, high-value areas of the business.”
Paris Creek Farms offers a diverse product portfolio, which includes milk, butter, cheese, and flavored yogurt.
In February, the company indicated that several parties had shown interest in acquiring Paris Creek Farms.
Recognizing the financial challenges it faced, Maggie Beer Holdings decided to divest this business, as its earnings were “significantly impacted by the loss” at Paris Creek Farms in FY24.
Interestingly, this divestment is anticipated to yield annual cash flow savings of approximately A$2.2 million for Maggie Beer Holdings.
Mark Lindh, chair of Maggie Beer Holdings, remarked that the sale is “an important step in our strategy of simplification and accelerated profitability.”
Importantly, the transaction is expected to be finalized by next week.
Katoomba Global Foods is a Victoria-based company specializing in manufacturing and distribution.
They supply a variety of global brands, including Al Wadi, Maggi, and Pangkarra.
In addition to its dairy business, Maggie Beer Holdings also oversees two other business units: Maggie Beer Products and Hampers & Gifts Australia (HGA).
Hamish McLeay, general manager for the company’s Maggie Beer Products and Paris Creek Farms units, stated that this deal will enable the group to “sharpen our strategic focus on our core premium brands, particularly Maggie Beer Products.”
In February, the company took the significant step of eliminating the roles of joint interim group COO and CFO, as part of an ongoing “strategic review” aimed at boosting profits.
The Adelaide-based company sought to “reduce the cost of doing business” and “improve margins” through this review.
In the first half of its fiscal year 2025, which ends on December 31, 2024, the group reported total sales of A$54.4 million, reflecting a 5.8% increase compared to the same period in 2024.
While announcing the results in late February, the company indicated that although Maggie Beer Products and HGA demonstrated sales growth, Paris Creek Farms experienced a 5% decline in net sales due to decreased intercompany sales, the administration of a key export, and loss of a customer.
Moreover, the group reported a 16.8% drop in EBITDA, falling to A$3 million, while maintaining flat gross margins at 50.9%.
