A sudden push into the US during the final month of the financial year contributed 9 per cent to infant formula marker Bubs Australia’s (ASX: BUB) record revenue of $89.3 million - up 127 per cent.
Bubs has also reported record earnings of $4.8 million, with the profit driven by growth across Australia and China and its accelerated market entry into the US.
That US push came late in the piece for the maker of organic goat milk infant formula when it stepped up to help alleviate a product shortage experienced across the country following a major product recall.
Bubs has labelled the US its “new frontier”, with revenue from two of the six ‘Operation Fly Formula’ planes being realised in June.
Since the US Food and Drugs Administration (FDA) approved all six of Bubs’ infant formula products, the listed company has air freighted over 800,000 tins to the USA which are stocked in a raft of major supermarkets including Walmart, Kroger, Target and more recently Amazon-owned Whole Foods Market.
Bubs now says it aims to expand its US retail footprint to 10,000 stores by the end of the calendar year.
Overall, Bubs posted an $11.4. million net loss for the period attributable to shareholders, which was an 85 per cent improvement on the prior year’s $77.9 million loss.
The Sydney-based manufacturer also achieved record sales in FY22 of $104.2 million - a 123 per cent increase on the prior corresponding period.
The company says it continues to be the fastest growing infant formula manufacturer in Australia, with domestic sales growth of 38.6 per cent and a 4.7 per cent market share.
In China, the company chalked up record gross revenue, up 166 per cent driven by a five-fold increase in corporate Daigou gross revenue. China is now the company’s largest market, representing 55 per cent of total group revenue - up from a 47 per cent share in FY21.
“These strong results have been achieved against a backdrop of the lingering impacts of COVID-19 pandemic, supply chain disruption, inflation, and global economic uncertainty,” Bubs CEO and founder Kristy Carr said.
“The FY22 result is undoubtedly a reflection of the strong foundations on which our business is built, our agility, and our ability to innovate and leverage opportunities in response to market dynamics,” added the CEO, who took home a total pay package of $3.7 million during FY22, up from $633,058 the year prior.
According to chairman Dennis Lin, Bubs is now achieving real scale, and the next phase of the company’s journey will see it become a global challenger.
“Now that Bubs offers a comprehensive infant formula portfolio catering to all three premium category segments experiencing value growth, infant formula revenue will be the major driver behind FY23 growth trajectory as we focus on further optimising our product mix,” Lin said.
“Whilst we will continue to protect and grow our domestic market position, China and the USA will be key growth engines, with both markets expected to be similar in revenue and margin contribution within the next three years.”
Shares in BUB are down 4.96 per cent to $0.575 per share at 10.33am AEST.
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