Having acquired the business in May 2021 for $40 million, Maggie Beer Holdings says the current economic environment has forced a revaluation.

As such, the company suffered a $12.5 million impairment charge against the goodwill of HGA in FY23, but the company is still worth more than it originally paid at $51.1 million – down from $63.6 million.

This led to a reduction in earnings for the company which owns and operates Maggie Beer’s eponymous brand, dairy manufacturer Paris Creek Farms and the aforementioned e-commerce gift basket company that was once a star performer for the listed business.

HGA also saw sales decline by 7.5 per cent in the reporting period, but was offset by a 7.2 rise in retail sales from Paris Creek Farms and Maggie Beer.

Trading earnings before interest, tax, depreciation and amortisation were $3.2 million – down from $10.5 million the previous year – while the group’s net profit after tax was $400,000 which is an improvement on last year’s $12.6 million loss.

Maggie Beer chairman Reg Weine said the results came during “difficult and evolving economic conditions as well as the shift in consumer and shopper behaviour during the year”.

“Combined with the continued impact of rising interest rates and inflation, shifting consumer habits in online shopping, together with higher freight and labour costs during the period,” he said.

“Notwithstanding the impairment, the board believes the HGA business remains a market leading e-commerce platform, with untapped potential.

“In FY24 we will continue to focus on our core operations, investing in key areas of our business, to strengthen our brands, accelerate innovation and enhance the customer experience.”

Kinda Grange joined Maggie Beer Holdings in March as the company’s new CEO, replacing Chantale Millard who sat in the top job for eight years.

The FY23 report is Grange’s first in the CEO seat, and she says the financial year was “challenging”.

“FY23 continued to be a challenging period, including the impacts of weaker consumer sentiment, rising freight, energy and labour costs and increased interest rates,” Grange said.

“Post COVID, we continued to see a shift in the consumer channel away from online which impacts gross margin.

“Our results in FY23 were also impacted by higher investments in market, people and products.”

The new CEO says these investments are part of the “strategy to expand and leverage the Maggie Beer brand”.

Grange sees growth opportunities in e-commerce, particularly outside of its Christmas peak.

“We will strengthen the foundations by delivering operational excellence and streamlining our range,” she said.

“We will also focus on providing exceptional customer service, building on our strong net promotor score.

“Secondly we will improve conversion rates on our core business. While we have good traffic and strong conversion rates on desktop, there is an opportunity to enhance conversion on mobile.”

The group expects to return to positive sales growth in FY24, and retain a strong balance sheet.

Shares in MBH are down 6.67 per cent to $0.14 per share at 11.38am AEST today.