Redeye provides a short comment on what is to be interpreted as a reverse profit warning from Cheffelo earlier this afternoon. The announcement follows the strong trading update from about a week ago, where sales came in ahead of our expectations. We are also encouraged by the exemplary communication from the company, with a rare level of transparency regarding special items.

Cheffelo

* The company's growth potential is limited, not expected to achieve five-fold growth in a decade, potentially restricting long-term returns.
* Cheffelo's revenue base lacks diversification, relying heavily on meal kit sales, which increases vulnerability to market fluctuations.
* The business is susceptible to commodity price fluctuations, particularly food prices, which can impact profitability if not immediately offset by price increases.
* There is some dependence on key individuals, particularly in management, presenting a potential risk to long-term stability and decision-making.
* The meal kit industry is cyclical and sensitive to capital market conditions, which can affect Cheffelo's performance during economic downturns.

* Cheffelo benefits from recurring revenue, with a significant portion coming from long-lasting subscriptions.
* The company has successfully expanded into multiple geographic markets.
* Cheffelo holds a strong market position, being able to capture industry value with profitability and a well-established brand.
* The business model allows for scaling without significant capital expenditure, enabling efficient growth and cash generation.
* Cheffelo actively promotes environmental sustainability by reducing food waste, which aligns with business profitability and customer values.

* CEO lacks the extensive experience (10+ years) typically associated with long-tenured leaders who outperform external hires, potentially impacting long-term performance.
* Unclear sustainability-related performance incentives in executive compensation, potentially missing an opportunity to align management with long-term ESG goals.
* Limited information on CEO evaluation and succession planning, which could pose risks to leadership continuity and corporate governance.

* Strong founder mentality with deep industry knowledge and market expertise, demonstrated by management’s ability to focus on long-term goals and profitability over short-term sales growth.
* Lean organization promoting self-direction and accountability, with a senior team that has worked together for an extended period, fostering stability and effective execution.
* Consistent delivery on promises and transparent investor communication, exemplified by trustworthy guidance and timely updates on business performance.
* Significant insider ownership, including board members and management, aligning their interests with shareholders and demonstrating long-term commitment to the company's success.
* Board composition includes business-savvy directors with relevant industry experience, enhancing strategic decision-making and value creation processes.