Who is participating in the SPP?, page-164

"For me I am pretty much written this off due to the fact they are constantly buying business after business which isn't making money"

I'm not sure how you have arrived at that conclusion, SMX. If 12 months from now the Halo accounts show negative earnings, then you can make that claim, but at this stage, your comment is misleading and incorrect. THM is evidently a profitable business. It was profitable in its early years of operation (2010 to 2016), unprofitable for a short period once private equity took the reins (2017 to 2018) and then profitable again once Rhian re-took control from 2019 to the present. Most importantly, earnings per share will rise with this transaction.

The below analysis incorporates THM financials in the FY22 result.





Information below from Peloton:

Proceeds from the Placement, SPP and Debt Facility are intended to primarily be used to provide the company with funds to complete the acquisition and support its growth initiatives, including:

1. Acquisition funding for The Healthy Mummy (THM)
2. Refinance of Existing Debt Facility
3. Working Capital and Growth initiatives
4. Transaction costs.

Ultimately the proceeds will place Halo Foods in a strong position for growth and growing positive EBITDA as it has demonstrated over the last 9 months, recording normalised EBITDA of $1.6m for the 9 months to 31 December 2021. Moving forward the company will capitalise on substantial cross-sell opportunities between Halo and THM brands, along with the integration of The Healthy Mummy’s high margin subscription digital product offering to transform Halo sales mix and profitability.

In discussions with the company, we believe there are additional positive factors to consider:

In summary

• Provides access to valuable and high margin direct to consumer digital distribution channels, with the ability to cross sell Halo’s products through those channels
• Introduces high margin recurring digital subscription-based revenue to Halo
• Halo will manufacture in-house the Healthy Mummy’s products, this is anticipated to be $4-5m per annum of work creating approximately $800k synergies for the benefit of Halo Food Co
• Healthy Mummy is a profitable and cash generative business, recorded $4.1m EBITDA as at 30 June 2021 and is on track to record more than $5.0m by June 2022. This EBITDA will be recorded in Halo’s financial results from the time of completion of the transaction
• Transforms Halo’s branded sales overnight from 10% of the sales mix to c.40%
• THM has a large social media following (1.9m Facebook followers, 220k Instagram followers and an engaged community of 600k mums) for which to market both THM and Halo brands to
• Complementary distribution channels across supermarket, petrol & convenience, specialty, pharmacy, online & social
• The Healthy Mummy is a fast-growing, profitable and cash generative business, in FY21, THM recorded revenue of ~$21 million and normalised EBITDA of $4 million.

The highly strategic acquisition to deliver combined revenue of ~$84 million and normalised EBITDA of ~$5.7 million (on a historic basis) to the Company pre-synergies and $800k in synergies expected to be realised from the manufacture of THM products in-house at Halo’s existing manufacturing facilities

Taking into account Halo Food Co’s current EBITDA run rate of the last 9 months the consolidated EBITDA is expected by ~$7.5m