What helped Bubs (ASX:BUB) more than double its FY22 revenue

August 30, 2022 11:26 AM AEST | By Ashish

What helped Bubs (ASX:BUB) more than double its FY22 revenue — Image source: © Bradcalkins | Megapixl.com

Highlights

Bubs doubled its gross revenue to a record AU$104.3 million in FY22.

Loss after tax shrank to AU$11.4 million from AU$74.7 million.

Bubs’ strong performance was supported by infant formula shortage in the second half of the year in the US.

Bubs Australia Ltd (ASX:BUB) on Tuesday announced record earnings in its annual results for FY22, buoyed by a margin growth in China and a supply deal in the US. The ASX-listed infant formula company more than doubled its gross revenue to a record AU$104.3 million in FY22.

The company’s gross revenue in the second half of FY22 was 40% more than that of the financial year 2021. Bubs delivered earnings of AU$4.8 million after a 32% rise in gross margins. Bubs’ strong performance was supported by an infant formula shortage in the second half of the year in the US.

Highlights from results

Record gross revenue rose 123% from FY21 to AU$104.2 million
Revenue rose 127% from the prior corresponding period to AU$89.3 million
China revenue surged 166%, representing 55% of the group revenue
Record Australian infant formula market share of 4.7%
Underlying earnings before interest, tax, depreciation, and amortisation (EBITDA stood at AU$4.8 million
Loss after tax shrank to AU$11.4 million from AU$74.7 million

What did Bubs’ management say?

Commenting on the results, Bubs’ founder and CEO Kristy Carr said that the company delivered an impressive performance despite rising consumer prices, supply chain issues, and other challenges in the economy.

“Gross margins increased significantly over the year to 32% for the group. Bubs Goat Infant Formula product margin increased to 40%. This was driven primarily by increased scale, a growing proportion of sales derived from higher margin infant formula, optimisation of product and channel mix, and improved supply-side economics inherent in our vertically integrated manufacturing model,” Carr also said.

Guidance

The Australian infant formula firm didn’t share any specific guidance in its annual results. However, the company focused on earnings growth and margin expansion. The company would work on the path to grow its business in China and the US.

Bubs’ share price snapshot

Despite record revenue, Bubs shares were trading 3.31% lower at AU$0.58, against the previous close of AU$0.60 at 11:15 AM (AEST). The stock price has risen over 24% on a year-to-date (YTD) basis. In the past 12 months, the stock surged nearly 43%. While the past-month gain stands at nearly 3%, the share price has risen over 39% in the past six months. The 52-week high and low of the stock are AU$0.86 and AU$0.34, respectively.

For context, the ASX 200 index was trading 0.43% higher at 6,995.70.

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