The Marley Spoon (ASX:MMM) share price has jumped 21 cents or 6.2% higher to $3.61 in early Friday trade after the global subscription-based meal kit provider upgraded its 2020 full year revenue growth expectations.
Marley Spoon said the COVID-19 pandemic accelerated the adoption of online grocery shopping, resulting in first half revenue jumping 89% higher.
Looking ahead, Marley Spoon said that due to the continued strong market environment, it was upgrading 2020 full year guidance to 80% – 100% revenue growth.
CEO Fabian Siegel said Marley Spoon is still seeing an accelerated adoption of online shopping for all kinds of goods, including groceries.
“The resulting surge in demand for our brands has led to strong growth, a record margin and a positive operating cashflow for the half year as well as a profitable second quarter,” Mr Siegel said.
The company said new customer acquisition has remained strong at an attractive cost per acquisition throughout the second quarter of the year, with customers acquired since the start of the pandemic showing equally strong or better than normal retention rates.
Marley Spoon has continued to build up its back book of recurring revenue, which accounted for 91% of Marley Spoon’s revenue in the first half of the year.
In its most recent update, the Perennial Value Microcap Opportunities Trust said it was “very impressed with the high customer retention rates that Marley was able to achieve, while customer acquisition costs have dropped.”
“In many ways the investment proposition of Marley Spoon has been significantly de-risked with this operational performance, thus despite the higher share price, it remains a core holding,” the fund manager said.
The Marley Spoon share price has rocketed almost 1300% higher so far in 2020, making it one of the very best performers in the ASX Emerging Companies Index.