Goat milk boosts Bubs by 400 per cent

Goat milk boosts Bubs by 400 per cent

On the back of sales of goat milk infant formula and exports to China Bubs Australia (ASX: BUB) saw sales grow by 422 per cent.

In the third quarter of FY18, net sales were up 422 per cent to $5.178 million and gross sales up 361 per cent to $5.455 million.

This boost was primarily driven by an increased demand for the company's goat milk infant formula which saw sales grow by 63 per cent by the end of Q3.

The group's success in China continued too, with sales in the region up 55 per cent for the third quarter.

The company has a strong balance sheet at the end of the quarter, with $5.570 million in cash reserves following the NuLac Foods acquisition. The group bought NuLac last November for $39 million.

Generally, business is looking strong for the organic infant formula producer. All three stages of Bubs' goat milk infant formula will be in Woolworths by the end of April 2018.

Woolworths has also agreed to stock two varieties of Bubs' organic baby cereals by the end of May 2018.

Chemist Warehouse has also jumped on board with Bubs, and will be stocking five varieties of Bubs' baby food pouches.

Internationally the group has made significant deals with online retailer JD.com to sell a huge variety of products including the goat milk formula and CapriLac powder.

Chief executive Nicholas Simms says he is pleased with the performance of Bubs.

"We continue to make solid progress on our strategic journey to increase domestic penetration of our product range, and expand channel capability into China," says Simms.

"We are particularly pleased with growing representation in our domestic market."

"Our new look banding launched last year continues to be well received by customers, while our content strategy delivering continuous presence on social media continues to grow with a community of over 100,000 engaged followers and more than 100 partnerships with targeted Key Opinion Leaders."

Simms says the company is making a targeted effort to get the brand onto more Australian shelves. The group is currently trailing products in Aldi stores and have set their sights on getting flavoured milks into Coles.

Shares in Bubs Australia are up 8.55 per cent to $0.82 per share at 10.08 am AEDT.

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