Parsley Box Share Discussion Threads

[74tom] 01/4/2021 13:33

Interesting call. They have a business, but the fact they got the IPO away at an £83.8m valuation says everything about the current IPO market. Some brief notes; they outsource all manufacturing & fulfilment, this gives flexibility but reduces their gross margins (to 25% ish). This explains why they have such a 'capital light' model, they CEO confirmed they have only spent £200k on CAPEX to date, a tiny figure. The other benefit of not manufacturing or fulfilling is they don't need warehouse space for storage.

However, relying on third parties for their product means they have reduced control over quality, which could explain the 'mush' comments on Trustpilot. They confirmed that they would be profitable if they turned off the marketing spend, however that's not an option because a business with £25m revenue, zero growth, low gross margins & no assets wouldn't be valued at £83m...

I did some digging on the CEO Kevin Dorren, it's of interest that he was the CEO of Orbital Software Holdings which IPO'd back in October 2000. It was a disaster by the looks of things. It opened at 167.5p on it's first day of trading, just over a year later it was acquired by Sopheon for 46p (although the shares had been valued at just 16p before they bought it).

is another interesting article on Orbital, as it includes a quote from Kevin;

"Revenue for the third quarter to December was £322,438, up 47% on the second quarter. Gross profits amounted to £316,778, up 51% on the second quarter. The net loss for the third quarter was £1.57 million, reflecting heavy investment in sales and marketing.

CEO Kevin Dorren said today: ‘We will continue to expand our geographic coverage through planned growth and selective acquisitions to accelerate the adoption of our technology and extend our leadership in this market.’

One to avoid IMO, at least until it's at a sensible valuation, which for me would be around £30m / 70p

[davidosh] 01/4/2021 11:09

The presentaation and Q&A will start in one hour....

You are invited to a Zoom webinar.

When: Thursday Apr 1, 2021 12:00 PM London

Register in advance for this webinar:

[steve3sandal] 31/3/2021 18:50

My interest is as a Mobeus shareholder who have sold a third and recouped their/our VC stake and a little more. Not the best day to list with the Deliveroo car crash but I also think this is a very full valuation. They must must must get the food right else they are just burning cash on marketing, not building a business. Lots to prove here before they start awarding penny options. Hmm.

[its the oxman] 31/3/2021 16:50

Think it's just been hit hard on back of deliveroo flop. May well recover a bit.

[74tom] 31/3/2021 16:48

Didn't say they were terrible, just that they are mispriced.

How could founders cash out any more? They sold £12m shares in a £17m raise, with the £2m IPO costs coming out of the companies pocket. And as for lower multiples, what multiples are you talking about here? Revenue I presume? You've got to have a lot of cash to execute a land grab, £4m cash is peanuts when it comes to marketing spend.

Also just seen the late RNS, 1.7m share options issued to the exec team exercisable at 1p, so that'll replace what they sold in the IPO then. Freebies on the first day of trading is pretty unusual.

[horndean eagle] 31/3/2021 16:02

Not sure its as terrible as being flagged. Founders cashed out very little. They haven't raised much as they think they will have modest losses this year and into healthy profitability next. It trades on much lower multiples than the wider home food sector. That might not count for much given the others are on extreme multiples but equally their core base is likely to be more sticky. Its not all about headline numbers either. Having the land grab counts for a lot and aiui they are leader in the segment they are targeting. Might be worth joining tomorrows call.

[74tom] 31/3/2021 13:57

If it's hard then maybe that's why they have the market to themselves? £83m valuation is bonkers having done more research.

It's interesting to read their Trustpilot reviews, on the whole very good but a concerning trend emerges (just looking at the reviews from the last day);

"The meals to begin with were really good but the more we have ordered the food has been mush rather than a meal, sorry to say, not sure what has happened"

"Not as good as 1st order"

"I placed an order 12/03/21 Special Offer 10 Meals for £19.99 + 2 small wines. The Sweet & Sour Chicken was Brown in Colour - edible but nothing special. The Lamb Hot Pot was Passable. Today I had the Cottage Pie and it was just AWFUL. I have 1 Cottage Pie, 2 Beef Stew and 2 Lasagne which I refuse to Eat as they just look Horrible, My Neighbour has confirmed the same."

This suggests a potential quality issue, with several more describing the food as 'mush'

The cohort slide from their admission doc also suggests they will have their work cut out in scaling revenue, with retention at about 50% after the first year.



My bet is they have to chase new customers to replace churn via increased marketing spend. They spent £5.8m on marketing in FY20 and only improved their gross margin / order contribution by around £4.5m. The result was an increase in their losses before tax to £3m.

Can they scale, keep quality up & become profitable?

They had £942k in the bank at the end of Dec & have added £3.9m in net proceeds, so have just £4.8m to do so. That's just not enough IMO. This appears to be as overpriced as Deliveroo.

[davidosh] 31/3/2021 13:44

If any of you would like to ask questions direct to management then why not join the one hour Parsley Box presentation and Q&A hosted by Mello tomorrow at noon? It is free for all investors to join and as they are listing today it means you can get to see them very early on their market debut...

You are invited to a Zoom webinar.

When: Thursday Apr 1, 2021 12:00 PM London

Register in advance for this webinar:



After registering, you will receive a confirmation email containing information about joining the webinar.

[energeticbacker] 31/3/2021 11:11

Not easy to sell to the 60+ brigade.....as this site reflects! Employee sales on IPO are very small holdings. Directors and founders had small disposals and still hold 325 of equity. Big exit was from VCT holders. Introductory coverage from Investor's Champion in today's Blog

[74tom] 31/3/2021 08:56

Unsurprising to see this get a hammering from open - I was shocked when I saw they had valued it at £83m. I don't see what the USP is here? They deliver hot meals to older people - a valuable service no doubt - but they are loss making & don't have any real barriers to entry? What if any of the big players in food delivery decided to enter the market? Suspect it is brought down to around £1 in due course, so £40m cap or so, but potentially lower.



What is particularly interesting to note is that every single employee that held shares is selling them in the IPO - see pages 134-136. Senior management are also cashing in as far as they appear able to.

This appears to be primed for someone (not me) to short.