Bubs Australia Limited (ASX: BUB) today, 17 April 2019, announced the sale of certain assets of Coach House Dairy brand to The Remarkable Milk Company Pty Ltd.
The Coach House Dairy brand was added to the portfolio of Bubs post the acquisition of NuLac Foods Pty Ltd in 2017. This brand is not considered core to Bubs business strategy, which is built around infant nutrition and goat dairy products. The divested assets include the business conducted under the ‘Coach House Dairy’ brand for the production and sale of flavoured cow’s milk products, including the Australian registered trademarks, recipes, website and social URL’s.
Bubs would receive half a million dollars post the sale completion, and the sale is expected to wind up by 30 June 2019 as per the company declaration.
Bubs Australia has witnessed a slew of transactions off late. The company early this year had sold its 49.9 percent stake in dairy manufacturing JV Uphamgo Australia back to the initial vendors of Nulac Pty Ltd. On 1 April 2019, the company announced 100 percent acquisition of Deloraine Dairy.
On 3rd April 2019, Bubs Australia released Dairy Day presentation. The company gave an overview of its quarterly financial performance. Gross revenue for 1H19 came in at $21.03 million which exceeded total FY18 full-year revenue, which was driven by not just domestic growth of 412% but also increased sales to China at 901%. On the product sales contribution front, the company saw the Adult Milk Products increase by 26% as compared to the 2H FY18 numbers; furthermore, Bubs infant nutrition products saw a 109% increase in sales.
The company highlighted its strategic steps for growth drivers in FY19, which include Innovation and product development, increased domestic market penetration, Vertical Integration and supply chain, and China channel development and partners. Goat milk formula is witnessing good growth in China, which is reportedly higher than the global supply growth rate. The goat milk-based formula is accounting for 5-10% share of the category.
Further, the presentation also highlighted the fact that Bubs Australia is the market leader in the goat dairy landscape, with the company supplying 65% of Australia’s total goat milk production. The company also discussed the Beingmate JV that was announced to the exchange on 6 March 2019. On the China market front, the company is undertaking a multi-channel strategy with presence in Mother and Baby stores, B2C cross border and eCommerce platforms.
2019 has been a good year for the BUB shareholders as the stock has delivered a hefty return of 72.53 percent on a YTD basis. Further, the stock has delivered 53.92 percent, 82.56 percent, and 1.95 percent in the past six months, three months, and one-month respectively.
The shares of BUB were last trading at $0.780 on ASX (As on 17 April 19). The market capitalisation of the company stands at $349.20 million. The 52-week high price is $0.940, and the 52-week low price is $0.355. As per the lasted updated ASX data, the EPS stands at -$0.208.
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