Being the baby formula supplier of last resort to the huge, deprived US market is paying off in spades for Bubs Australia which today revealed a surge in revenue and earnings for the year to June 30 in a new update.
It was only on Thursday that the company revealed it had won a deal to supply some of its infant formula products to Walmart, the world’s biggest retailer, with the tins going into hundreds of Walmart outlets across the US midwest.
A jumbo 747 freighter with 85,000 cans flew out of Melbourne last night for the US state of Ohio.
That is after a deal with the US government to supply formula to two other retailers, Kroger and Albertson’s, two of the biggest supermarket chains across the US
So it doesn’t seem all that odd that Bubs told the ASX on Friday that there had been “a material upgrade to the Company’s FY22 revenue and earnings expectations.”
The company said that in its half year report in February it revealed $38.5 million in gross revenue (which was up 73% and $1.2 million in underlying EBITDA (Earnings before interest tax depreciation and amortisation).
“At that time management provided guidance that the Company expected to deliver modest Half on Half growth in Revenue and underlying EBITDA (excluding non-cash equity compensation expenses, i.e. share based payments). On release of the Q3 FY22 Quarterly Activities report and the 4C Cashflow Statement on 26 April 2022, the Company reiterated this guidance.”
But now Bubs expects to report June 30 gross revenue “to be over $100 million, subject to scheduled operations occurring without disruption, with at least 100% increase on the $1.2 million underlying EBITDA (excluding non-cash equity compensation expenses) reported at the Half Year.
Bubs Founder and CEO, Kristy Carr said in Friday’s announement: “All key product segments, including Bubs A2 Beta-Casein Protein, Organic Grass-Fed, and Easy-Digest Goat Milk Infant Formula ranges, are performing strongly in Australia, China and the USA.
“Due to a strong momentum in China and the unanticipated volume of sales in the USA, complemented by Bubs’ demonstrated agility and speed to respond to the call for action with first mover advantage, Fourth Quarter turnover is likely to be higher than originally anticipated.
“The Company confirms Bubs is continuing to supply Australian retailers and export markets to meet ongoing consumer demand,” Bubs said on Friday.