Id think 0.75 is a good profit per unit. Not measley. MC has...

Id think 0.75 is a good profit per unit. Not measley.

MC has been around the block enought to know taking a price cut but ramping the volume 3×4 times is how you get scale. PFT isnt trying to bring in a fat profit. Its trying to control costs whilst grabbing high growth opportunities. Far easier to renegotiate you materials supply cost after you have tge sales.

im not suggesting tgey are making 0.75 on a 5.50 item. Im suggesting they are making approx 0.75 on a 2.00 sale to Woolworths. Thats 37.5% profit. That is huge,
that is also optimistic in the extreme now i think about it. Te deal could have done for far less.

to put 37.5% in perspective the last set of operational results ( page 8 and 9 of the 4E ) the average product GP is 24%. 7.89m sales v 6.36m raw materials and labour. So to suggest 0.75c ( a fat 37% profit) is measely flies in the face of the evidence presented and basically name every other products return

the Potato and Gravy is basically first to market of its kind. There are a couple of others but neither can be sold cold, frozen or heated ready to go. Why go for 37% profit when you could go for market domination at 10% or even -5% if you thought you could then pick up Coles, Aldi, all the independants, maybe export, grind the costs down and eventually make 20% of a massive market.

PFT report growth, not profitability. If they had a profitability focus they would be reporting that, primarily they dont. When the coffers run dry they just raise cash. They just have. You know why? Because they and their investors want revenue, scale. MC states he wants a 50m revenue within 5 years. He isnt saying he wants to land a fat profit. That would only slow the growth.

Yeah its guess work but feel free to put forward some better calculations on the Potato and Gravy.

also, is that 40% stated for short shelf life fresh products? Im pretty sure woolworths want a better margin due to end of shelf life wastage risk where they need to mark it down at their own cost. As opposed to supplier driven promotions.