Infant formula company Bubs seeks funds to grow bigger
Infant formula company Bubs Australia will tap investors for a funding injection, announcing a capital raising before the market opened on Monday and a trading halt in its shares until Friday September 4 at the latest.
The news came just before the fast growing infant formula company unveiled its 2019-20 full year results, where it delivered a 24 per cent increase in revenue to $54.64 million, but fell short of recording a full year profit.
ASX-listed Bubs reported a statutory net loss of $7.79 million, which was well ahead of last year’s $35.51 million loss and ahead of consensus. The market was expecting a loss of $8.97 million.
The company, which has established a niche in the goat milk infant formula category in Australia and in China, has over the past two years announced plans to increase its offering substantially, including by entering the cow milk infant formula category and by reaching new agreements with the supermarket majors to stock its products.
Australia again delivered the bulk of the company’s revenue, up 9 per cent on the prior year and contributing 67 per cent of group revenue. China revenue rose 32 per cent in the year, and made up nearly one-quarter of revenue.
Last week the company announced a Memorandum of Understanding with joint venture partner and Chinese food manufacturer Beingmate, which it gives it an ownership interest in one of Beingmate’s Chinese manufacturing facilities. The facility has certification to manufacture products for the Chinese market.
And last month Bubs announced that it would enter the children’s vitamin and supplements category, on the same day it said it had appointed Jennifer Hawkins as a brand ambassador for three years.
The company’s shares closed down 1.1 per cent to 91.5 cents on Friday.
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Darren is the mining and agribusiness reporter for The Age and The Sydney Morning Herald.
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