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While FY19 was a difficult year for organic baby food producer Bellamy's Organic (ASX: BAL) things appear to be looking up.
The company posted a statutory NPAT of $21.7 million for FY19, down nearly 50 per cent from FY18's strong $42.8 million profit.
Revenue was also down by 19 per cent to $266.2 million, and EBITDA was down 46 per cent to $34.9 million.
The company blames its disappointing results on stiff regulation and a lower birth rate, as well as increased competition for Chinese demand.
Bellamy's CEO Andrew Cohen says that while FY19 was disappointing, the company has plans in the pipeline to improve the bottom line.
"While FY19 has been a challenging year, and the impact of regulation has been difficult, the changes made during the past year have set a new foundation for the long-term success of our brand," says Cohen.
At the end of the financial year the company began to work on a "transformational rebrand" of the business which Bellamy's says has been gaining momentum since its March launch.
Sales have picked up during Q4 for the business, and Bellamy's says that leading consumer indicators are positive, including an uptick in e-commerce sales, brand interest, and China sales.
In conjunction with the group's rebrand, Bellamy's has doubled investment in both marketing and its China capability to better engage customers.
The company expects to return to sustained growth in FY20, boosted by the planned launch of new products including an organic ultra-premium formula series, an organic goat formula series, and a China offline organic food range.
"With consumer momentum, higher investment levels, a breakthrough new product pipeline, and a reengaged trade, we expect a return to sustained growth in FY20 and deliver on the promise of this incredible brand," says Cohen.
Shares in Bellamy's are down 1.61 per cent to $7.92 per share at 11.07am AEST.
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