TasFoods : Revised - Business Activity Report and Appendix 4C

[phone]	PO Box 425
[e-mail]..au	54 Tamar St,
Launceston,
tasfoods.com.au	TAS, 7250, Australia
ABN 53 084 800 902	ACN 084 800 902

ASX Announcement: 27 April 2022

Revised Business Activity Report and Appendix 4C Quarterly Cash Flow for the Quarter Ending 31 March 2022

TasFoods Limited (ASX: TFL) ('TasFoods' or 'the Company') refers to the Business Activity Report and Appendix 4C Quarterly Cash Flow for the Quarter Ending 31 March 2022 lodged with the ASX on 27 April 2022.

The Appendix 4C table headers were found to contain a minor error in that they referred to Year to date (12 months) instead of Year to date (3 months). The Company now provides a revised Business Activity Report and Appendix 4C with the headings corrected. There are no other changes and the entire document has been attached again for completeness.

Authorised for ASX release by the Board of TasFoods Ltd.

TasFoods contact

Scott Hadley

Chief Executive Officer [phone]

[phone]	PO Box 425
[e-mail]..au	54 Tamar St,
Launceston,
tasfoods.com.au	TAS, 7250, Australia
ABN 53 084 800 902	ACN 084 800 902

ASX Announcement: 27 April 2022

Business Activity Report and Appendix 4C Quarterly Cash Flow

TasFoods Limited (ASX:TFL) today released its Business Activity Report and Appendix 4C Quarterly Cash Flow for the quarter ended 31 March 2022 (Q1 2022).

Overview:

• • Successful post balance date capital raising of $5.5m Placement along with a $0.5m SPP to fund initial stages of the Company's new strategy as announced to ASX on 28 February. Placement strongly supported by existing investors who are aligned with management's vision for the future of TasFoods.

• • The leadership team has finalised its business review and forward-looking strategy that will leverage the strong capabilities inherent in our Tasmanian operations to further grow into the wider domestic market and export market over time.

• • Sales for Q1 2022 were broadly in line with pcp with the Poultry division recording a 2% increase and Dairy a reduction of 1.8%.

• • Whilst the Betta Milk brand operates in a highly competitive sector of the milk market we have started to see some benefits from our updated strategy. Volumes were reduced on pcp however revenue per unit increased as a result of price rises which were passed through. We continue to believe the Betta Milk brand has strong potential and plans are underway to reinvigorate this proudly Tasmanian brand.

• • The Meander Valley Dairy brand has a particularly strong volume quarter driven by increases in butter (30%) and cream (25%). Gross margins were impacted by input prices and COVID-19 impacted labour costs, however management will be putting in place value chain findings to alleviate some of these supply challenges and improve profitability.

• • The Poultry division reported Q1 revenue growth up 2% on the pcp which was an excellent result given the COVID-19 impact felt by this business unit in February. Gross margin was negatively impacted by input costs, particularly feed (19% increase on pcp) and labour (20% increase on pcp).

• • COVID-19 disruptions continue to impact both our business divisions particularly during February where labour shortages severely impacted operations and our primary focus was on continuity of supply and animal welfare. Temporary labour and overtime increases were required to process birds, and the team at Nichols did an outstanding job in difficult circumstances.

• • Input costs rose sharply through the quarter particularly the key inputs of poultry feed, milk, fuel and energy.

• • Given these costs pressures from labour and other inputs, the Company experienced a gross profit margin reduction of 4.6 percentage points on the pcp. Board and management continue to actively review its supply chain to ensure best available pricing and continuity of supply through these challenging market conditions.

• • Enhanced talent capabilities in sales, marketing, e-commerce, logistics and supply chain has been recruited with these key hires to commence in Q2 which will accelerate implementation of the renewed strategy

Financial update

[phone]	PO Box 425
[e-mail]..au	54 Tamar St,
Launceston,
tasfoods.com.au	TAS, 7250, Australia
ABN 53 084 800 902	ACN 084 800 902

• • Group revenue for the quarter was consistent with pcp at $16.6m.

  Initiative	Status update
  Fix the foundations	Work in progress. Positive steps undertaken in the areas of financial accountability and transparency however further work required.
  Reset strategic direction	Complete.
  Implement capital management framework	Complete. Principles embedded into decision making.
  Develop marketing & brand investment plans	Work in progress. New GM of Marketing starts April with a focus on developing action plans.
  Implement ERP	Work in progress. On track for a Q4 2022 implementation.
  Distribution & warehousing	Work in progress. New Logistics Manager starts April with a focus on developing one TasFoods solution.
  Commercial accountability and capability	Work in progress. Development plans & KPI's being developed to improve this capability.
  Implement value chain findings	Work in progress. Betta cream first category implemented with SKU reduction and price rise. Nichols poultry and Betta Milk to be implemented in March/April with Meander Valley Dairy to follow.
  Build centre of excellence	Work in progress. Established new TasFoods supply chain area with particular focus on logistics, procurement and maintenance.
  Target mainland and e-commerce growth	Work in progress. New GM of Sales and e-commerce Manager (both Melbourne based) start in April with a focus on developing channel plans.

• • Direct cost of goods sold expenditure increased by $0.9m, an increase of 7% versus pcp despite volumes sold declining on pcp. Feed costs associated with the Poultry division increased by 19% on pcp driven by the significant increase in the cost of wheat which is approximately 45% of input costs.

• • Raw milk input costs have increased by 16% in Q1 driven by variances in milk composition and increased farm gate prices from March despite lower volume of milk purchased.

• • Indirect expenditure has focused on managing business as usual activities prudently with a focus on re-setting the strategic and operational agenda and increasing essential core capabilities that will enhance future earnings performance. Distribution & Warehouse expenditure rose 13% versus pcp, a direct result of increasing fuel and transport costs. There was no expenditure on material changes or other material developments.

FY2022 Strategic reset and operational priorities

TasFoods new management team has set out its new strategic ambition and is now developing detailed operational plans to implement these initiatives. Our ambition has been shared with all shareholders, outlining the three phase's to consolidate the business, reposition the portfolio and provide a strong foundation to grow into the future.

The Company has announced our 10 initiatives that will deliver upon the strategy and drive operational improvement. An update on the progress of these initiatives is included below:

[phone]	PO Box 425
[e-mail]..au	54 Tamar St,
Launceston,
tasfoods.com.au	TAS, 7250, Australia
ABN 53 084 800 902	ACN 084 800 902

The TasFoods team is working hard with passion and enthusiasm to achieve our strategic priorities and realise our potential as a premium branded produce business. TasFoods is continuing to experience change but as we build capability in process, systems and people we will expect to achieve improved financial performance for shareholders and provide us with the platform for future organic and inorganic growth.

Quarterly Cash Flow

TasFoods' Appendix 4C for the quarter ended 31 March 2022 (Q1 2022) has been lodged with the ASX today. Key points include:

• • The quarter ended with a closing cash on hand balance of ($0.6) million and unused finance facilities of $1.9 million.

• • During April, Tranche 1 capital raise funds of $3.2m were received, with the balance in early June.

• • Cash receipts from customers increased by $0.9 million, 5% on the pcp.

• • Net operating cash outflows increased to negative $1.4 million, reflecting the quarterly trading performance and a net increase in trade debtors balance from Q4 2021 of $0.4 million.

• • Investment in property plant and equipment of $0.2 million comprised of various plant and equipment purchases across all business units.

• • Cash flow from financing activities primarily related insurance premium funding repayments of $0.5 million.

• • Following settlement of the Placement & SPP, management is confident in the strength of the balance sheet and anticipated working capital requirements to implement the first stage initiatives of our new strategy.

Authorised for ASX release by the Board of Directors of TasFoods Ltd.

TasFoods contact

Scott Hadley

Chief Executive Officer [phone]

Forward-looking statements

The Appendix 4C contains certain forward-looking statements that are based upon information and assumptions known to date and are subject to various risks and uncertainties. Actual results, performance or achievements could be significantly different from those expressed in, or implied by, these forward-looking statements. Such forward-looking statements are not guarantees of future performance and involve known and unknown risks, uncertainties and other factors, many of which are beyond the control of TasFoods. These factors may cause actual results to differ materially from those expressed in the Appendix 4C contained in this announcement.

Rule 4.7B

Appendix 4C

Quarterly cash flow report for entities subject to Listing Rule 4.7B

Name of entity

TasFoods Limited

ABN

53 084 800 902

Quarter ended ("current quarter")

31 March 2022

Consolidated statement of cash flows	Current quarter $A'000	Year to date (3 months) $A'000
1. Cash flows from operating activities 1.1 Receipts from customers 1.2 Payments for (a) research and development (b) product manufacturing and operating costs (c) advertising and marketing (d) leased assets (e) staff costs (f) administration and corporate costs 1.3 Dividends received (see note 3) 1.4 Interest received 1.5 Interest and other costs of finance paid 1.6 Income taxes paid 1.7 Government grants and tax incentives 1.8 Other (provide details if material) 1.9 Net cash from / (used in) operating activities	17,721 - (12,755) (74) (2) (5,375) (874) - - (100) - - 42	17,721 - (12,755) (74) (2) (5,375) (874) - - (100) - - 42
(1,417)	(1,417)

ASX Listing Rules Appendix 4C (17/07/20)

2.	Cash flows from investing activities
2.1	Payments to acquire or for:
(a) entities	-	-
(b) businesses	-	-
(c) property, plant and equipment	(210)	(210)
(d) investments	-	-
(e) intellectual property	-	-
(f) other non-current assets	(58)	(58)
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+ See chapter 19 of the ASX Listing Rules for defined terms.