Bubs Australia Limited (ASX: BUB) is an Australian based company providing a range of organic pouch baby food and goat milk formula. BUB is one of the largest producers of goat milk products in Australia. BUB is engaged in the business of providing premium infant nutrition products for happy and healthy bubs. Bubs speciality infant formula and organic baby food caters for a child’s first 1,000 days of life. It provides baby foods such as baby formula, cereal, pouches, rusks, and goat milk which are available at Woolworths stores. Its products are sold throughout Australia, South East Asia, the Middle East, and China.
Today, BUB has announced the quarterly updates for the second quarter of FY19 ending 31 December 2018. During the first half of FY19, BUB achieved gross revenue of A$21 million which has exceeded the gross revenue of the full financial year 2018. For the second quarter, it reported gross revenue of A$12.1 million which was up by 499% as compared to the previous comparable period (PCP) and 35% up on the first quarter of FY19.
The sales of Bubs products went up by 216% on PCP and 75% over the previous quarter. The Infant Formula equating 40% of group quarterly revenue grew by 279% on PCP and 107% over last quarter; Organic Baby Food was up by 61% on PCP; a growth of 71% on PCP was recorded for Organic Toddler Snacks. This was on account of robust domestic presence, activation of the Corporate Daigou distribution channel, and China cross-border eCommerce sales.
The domestic sales grew by 375% versus PCP and 18% on the previous quarter whereas sales to China increased by 2,281% on the same period last year and 121% over the previous quarter. Bubs gross margin was up by 60% to 32%, resulting in 37% improvement in total group gross margin. It also reported a strong balance sheet with $26.7 million in cash reserves as at 31 December 2018 and inventory of approx. $12 million.
During the quarter, BUB reported net cash used in operating activities of A$4.952 million and A$13.506 million for 1H19. For the next quarter, BUB estimates a net cash outflow of A$14.454 million.
Moreover, BUB reported cash used in investing activities of A$11 K during the quarter and A$30 K for 1H19. The cash used in financing activities was reported at A$50K for the quarter with a cash flow provided by financing activities for 1H19 was A$1.608 million.
The effect of movement in exchange rates on cash held was also nil for the quarter as well as 1H19. It reported a cash balance of A$26.715 million at the end of the period, i.e., 31 December 2018.
BUB will be publishing its Half-Yearly Financial Report along with the strategic progress and future business direction on or before 28 February 2019.
Looking at Bubs Australia Limited’s stock performance, it has generated a negative return of 41.10% during the past six months. It is currently trading at A$0.500 (as on 31 January 2019, 3:24 pm AEST) with a surge of 16.279% in the price during the day’s performance.
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