Market Herald logo

Subscribe

Be the first with the news that moves the market
  • Baby Bunting (BBN) has capped off a hard year for retailers, with strong growth in both sales and profits
  • The company’s total sales for FY20 were $405.2 million, up 11.8 per cent year-on-year
  • While the company’s gross profits also improved in FY20, increasing by 15.9 per cent to sit at $146.9 million
  • It ended the year cash flow positive, with over $13 million in the bank
  • Baby Bunting shareholders will receive a final dividend of 6.4 cents per share, fully franked
  • It also announced it would open another three stores in FY21 and focus on growing its market share in New Zealand
  • Shares in Baby Bunting ended the day trading up 10.4 per cent, at $4.15 each

Baby Bunting (BBN) has recorded strong results in FY20, despite it being a horror year for other retailers.

COVID-19 caused many non-essential businesses to close, but the baby supplies stores managed to stay open throughout the pandemic.

Sales

This resulted in strong sales growth for the company in a number of areas, including the total number of transactions – which rose 10.2 per cent year-on-year.

Online sales also increased, as customers were encouraged to stay at home, rising by 39 per cent, to make up a total of `14.5 per cent of all sales, or around $58.9 million.

While, Baby Bunting increased its total sales by 11.8 per cent over the 2020 financial year, with $405.2 million in sales completed over the period.

Along with staying open during the pandemic, the company was also boosted by the opening of three new stores during the 2020 financial period.

Baby Bunting now has 56 operational stores across Australia, with three more shops expected to open in FY21.

Finances

The company ended FY20 with around $13.3 million worth of cash in the bank, up from $5.8 million at the end of the previous financial year.

It ended the period cash flow positive, with around $50,000 on its operating balance sheet.

Baby Bunting’s gross profit increased by 15.9 per cent in FY20, to a total of $146.9 million. While gross profit as a percentage of sales increased 120 basis points to 36.2 per cent.

Looking at the company’s net profit after tax (NPAT) – pro forma NPAT was $19.3 million in FY20, up 34.1 per cent on the previous year.

But, these results clash with the company’s statutory results, which saw NPAT total $10 million, a decrease of 14.3 per cent on FY19.

Baby Bunting said its pro forma financial results had been calculated to exclude the non-cash impact of a number of business expenses, so as to “better represent the underlying financial performance of the business”.

The company’s pro forma earnings before interest, tax, depreciation and amortisation (EBITDA) for FY20 totalled $33.7 million, up 24.1 per cent on FY19.

Meantime, Baby Bunting announced its shareholders will receive a final dividend of 6.4 cents per share, fully franked.

Shareholders also received an interim dividend of 4.1 cents per shares, meaning they’ll receive a total dividend payment for the year is 10.5 cents per share.

The company said this is equivalent to approximately 70 per cent of its FY20 pro forma NPAT.

Outlook

Looking ahead, Baby Bunting said its focus was on continuing to grow its network of stores to over 100 in total.

It also wants to introduce more private label and exclusive brands into its stores, with a focus in FY21 on the hard goods category.

Long term, the company wants 50 per cent of all of its sales to be exclusive to Baby Bunting and it’s close to hitting that goal – with 36.5 per cent of all sales in FY20 being exclusive.

Baby Bunting also commenced work on a new purpose-built distribution centre in FY20 and said it plans to move into the larger facility (and attaching support office) by mid FY21.

Finally, the company said it was focused on expanding its market in New Zealand, after beginning delivery there in FY20.

Following today’s release of its full-year financial results, Baby Bunting’s shares have jumped up 10.4 per cent, to $4.15 each at mark close on August 14.

BBN by the numbers
More From The Market Herald
BetMakers (ASX:BET) - CEO, Todd Buckingham

" BetMakers (ASX:BET) sees its biggest number of quarterly cash receipts to date

BetMakers Technology (ASX:BET) recorded $24.6 million in reported cash receipts over the second quarter in FY22,…

" Live Verdure (ASX:LV1) partners with TruLife for US distribution

Food, skincare and nutraceutical company Live Verdure (ASX:LV1) has entered a non-executive national sales and distribution…
SECOS Group (ASX:SES) - CEO, Ian Stacey

" SECOS (ASX:SES) launches MyEcoBag and MyEcoPet through Pacchini

Sustainable packaging company, SECOS (ASX:SES) has launched MyEcoBag and MyEcoPet through Pacchini Sales and Distribution to…