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- Despite the ongoing COVID-19 pandemic, Bubs Australia (BUB) delivered quarter-on-quarter growth in three priority areas
- Total infant formula sales were up four per cent, China export sales were up 28 per cent and daigou channel sales were up 19 per cent
- Unfortunately, Bubs recorded gross revenue of $11.8 million, down 40 per cent over the prior corresponding period (pcp)
- Pleasingly, Bubs remains the fastest-growing infant formula manufacturer across Woolworths (WOW), Chemist Warehouse and Coles (COL) with combined sales up 37 on the pcp
- Additionally, Bubs has decided to simplify its structure and reached an agreement with Beingmate to unwind the Bubs Brand Management Shanghai Co joint venture
- In the quarter, Bubs burnt around $3.75 million in operating activities and used $154,000 in investing activities
- As of March 31, the company had $44.3 million in total available funding, representing 12 quarter of use if spending levels remain the same
- Bubs is up a slight 1.14 per cent on the market with shares trading at 44.5 cents
Despite the ongoing COVID-19 pandemic, Bubs Australia (BUB) delivered quarter-on-quarter growth in three priority areas.
Bubs total infant formula sales were up four per cent over Q2 FY21, China export sales were up 28 per cent over the prior quarter and daigou channel sales were up 19 per cent.
Unfortunately, Bubs recorded gross revenue of $11.8 million, down 40 per cent over the prior corresponding period (pcp).
As a result, Q3 domestic daigou sales were down 52 per cent over the pcp.
“We are pleased that despite the inability to replicate what was an abnormally high group gross quarterly revenue result in Q3 FY20, there are continued signs of accelerated growth momentum across the three strategic priority areas we identified at the half-year,” Founder and CEO Kristy Carr commented.
“Our China business across both our infant nutrition and dairy portfolios is showing strong growth momentum, with export revenue generated from all three branded English label product sales into China increasing 42 per cent compared to the pcp,” she said.
Brand presence
Pleasingly, Bubs remains the fastest-growing infant formula manufacturer across Woolworths (WOW), Chemist Warehouse and Coles (COL) with combined sales up 37 on the pcp.
Total Bubs sales were up 436 per cent over the pcp in Woolworths stores and it is the number two goat formula brand in Coles.
Bubs also remains the number one goat formula brand in Chemist Warehouse stores.
Developments
Bubs has decided to simplify its structure in order to drive the highest margin for its core products where it sees the most growth.
As a result, Bubs reached an agreement with Beingmate to unwind the joint venture, Bubs Brand Management Shanghai Co, in which it holds a 49 per cent interest.
The company has begun the process of establishing a wholly owned subsidiary in China.
“Under the new fully controlled China entity, we will have our own China sales structure and the flexibility to leverage profitable growth opportunities,” Chairman Dennis Lin said.
“This restructure will not result in any disruption to existing business and has not impacted our sales forecast,” he added.
Finances
Bubs burnt $3.75 million in the quarter with the majority going towards manufacturing and operating costs.
The company also invested $154,000 in property, plant and equipment.
As of March 31, Bubs had $44.3 million in total available funding, representing 12 quarter of use if spending levels remain the same.
Bubs is up a slight 1.14 per cent on the market this morning with shares trading at 44.5 cents at 10:54 am AEST.
