Infant formula maker Bubs Australia reported its strongest financial quarter to date on Monday, with sales exceeding the full year in 2018.
The company recorded a 179 per cent profit increase to A$51.3 million, helped by its strategic alliance with Australian pharmacy, Chemist Warehouse., which has seen 28 Bubs products stocked at 450 pharmacy outlets in Australia.
“We are pleased to deliver the strongest quarter in the company’s history, with our fourth quarter sales exceeding that of the full year in 2018. The full year finished at A$51.3 million in gross revenues, which is up 179 per cent on prior year,” Bubs founder and CEO Kristy Carr said.
“This demonstrates the validity of our continuing focus on our four-pillar growth strategy, combined with underlying investments in supply chain and capabilities, and key strategic channel partnerships, is delivering an aggressive growth trajectory and a platform for moving into profitable growth in the near term.”
During the quarter, Bubs saw a 56 per cent uplift in group sales over the previous quarter, and more than doubled sales revenue compared to the same period last year.
Bubs goat milk infant formula was the core driver of sales, increasing 341 per cent year-on-year. The company said its revenue split between infant nutrition and adult dairy portfolios continues to be closely balanced.
Bubs’ domestic market experienced the strongest growth throughout the quarter, driven by increasing penetration in Coles, Woolworths, Big W, Amazon and Costco, and the rollout of products in Chemist Warehouse outlets in June.
In addition, the rapid growth of the corporate Daigou segment contributed to Bubs’ domestic sales more than doubling that of the prior year.
Bubs Australia invested A$31.4 million to C2 Capital Partners, a private equity fund secured by the e-commerce giant, Alibaba, and acquired Australia Deloraine Dairy in the last quarter.
“Our China route-to-market platform capability advanced significantly through new strategic partnerships with Beingmate, Alibaba and Kidswant. Sales through these channels were initiated late in the quarter and are expected to drive future growth in B2B export sales to China,” added Carr in a statement.
The joint venture with Chinese company, Beingmate, distributes Bubs products in 30,000 mother and baby stores in China. It also has a supply agreement with the mother and baby store, Kidswant, in China. Bubs OrganicÒ are sold in all 275 Kidswant stores in 123 cities throughout the Asian country. The retail sales is expected to reach RMB 30 million (A$6 million) in the first year.
Bubs’ supply deal with Fonterra Australia in May to produce Bubs Organic cow milk infant formula will see the products available in stores from September.
Bubs Australia said it continues to maintain a robust balance sheet with A$23.3 million in cash reserves at the end of June.