Australia’s leading food and beverage company, Bellamy’s Australia Limited’s (ASX: BAL) shares climbed up 12.005% today (4 March 2019), owing to positive market sentiment over the long term growth prospects despite weak performance in 1HFY19.
Earlier on 27 February 2019, the company had published its half-year results for FY 2019. On a normalized basis, the company earned revenue of $130 Million and EBITDA of $26 Million in the first half of FY 2019 which largely reflects the net impact of lower revenue and an improved gross margin.
The company’s revenue was majorly impacted by the delayed SAMR registration due to which there were no Chinese-label formula sales in the first half of 2019. The Gross Margin of the company improved 5.7% points in 1H FY19 as compared to 1H FY18.
At the end of the half year period, the group had a cash balance of $95 million. The Cash conversion during the half-year period was impacted by the cyclical phasing of creditor payment cycles and structural changes in the company’s supply chain as a result of direct sourcing strategy. The company maintained its zero debt levels in H1 FY19, with access to a $40M debt facility.
The company is confident in its SAMR application and stand ready to activate its China Offline strategy. For FY 2019, the company is anticipating its Group Revenue to be around $275-300 million. Further, the company has revised its FY19 Group EBITDA margin to 18-22% on a normalised basis, reflecting increased investment in marketing and the China team.
While commenting the half-year results, the company’s CEO Andrew Cohen informed that while the company faced various challenges in the first half of 2019, the business emerges with a winning product that combines the best of organic with the best of science. Together with an already strong brand, this change sets a new platform for long-term growth and higher levels of investment in China.
On 24 October 2018, the company held its Annual General Meeting (AGM), in which the company informed that it is expecting the sales of the first half of FY 2019 to go down by approximately $10- $15 Mn. In the financial year 2018, the company reported strong revenue growth with sales increasing by 37 percent to $329 million as compared to FY 2017.
Now, let’s have a glance at the company’s stock performance and the return it has posted over the past few months. BAL’ shares traded at a price of $9.890, up by 12.005% during the day’s trade with a market capitalisation of ~$1 billion as on 4 March 2019 (AEST 4:00 PM). The counter opened the day at $9.010 and reached the day’s high of $9.920 and touched a day’s low of $9.010 with a daily volume of ~ 6,808,213. The stock has provided a year till date return of 16.34% & also posted returns of -14.60%, 7.68% & 3.88% over the past six months, three & one-months period respectively. It had a 52-week high price of $23.070 and touched 52 weeks low of $6.710, with an average volume of ~1,620,990.
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