Bellamy’s shares plunge as trade resumes
Shares in embattled infant formula maker Bellamy’s fell sharply as they resumed trading after the surprise suspension of a key Chinese regulatory licence for its newly acquired canning facility.
Bellamy’s shares, which were suspended from trade for nearly two weeks, dropped 34 cents, or five per cent, to a closing price of $6.40, after plunging by more than 12 per cent during the day.
The company this month completed a $60.4 million capital raising to fund the $28.5 million acquisition of a 90 per cent indirect interest in the Camperdown Powder canning facility and other parts of the company’s turnaround strategy.
However, following the July 7 suspension of Camperdown’s Powder’s food licence by the Certification Accreditation Administration of the People’s Republic of China (CNCA), Bellamy’s on Monday issued a supplementary prospectus to the capital raising offering refunds.
The infant formula maker said it had entered into arrangements with the underwriters – including major shareholder Janchor, which was founded by Bellamy’s chairman John Ho – to cover any withdrawals by investors.
Bellamy’s also said it had made full responses to enquiries raised by the CNCA about allegations received by the regulator from a third-party complainant relating to record-keeping and previous quality issues at Camperdown.
The Tasmanian-owned company on Monday said its sales and profitability had improved.
The company expects revenue of about $121 million in the second half of the financial year, and full year revenue of about $239 million.
Second half earnings before interest and tax are expected to be at the upper end of guidance disclosed in the prospectus.
Bellamy’s said it has been cashflow positive since March 2017, reflecting increased sales and an improving inventory position.