The Bubs Australia Ltd (ASX: BUB) share price is on watch today after releasing its FY21 fourth quarter revenue numbers.
Bubs FY21 fourth quarter
The infant formula business said that its fourth quarter showed quarterly gross revenue of $12.8 million, up 8% on the third quarter.
Bubs also said that it delivered on a modest increase in gross revenue for the half, up 10% (half on half) to $24.6 million.
However, the total FY21 revenue was $46.8 million, down 24% year on year which reflects the prolonged COVID-19 disruption.
It ended with a cash balance of $27.9 million, which is sufficient to fund the business for 11 quarters according to management.
Bubs broke down some of the individual highlights:
Domestic
Its domestic retail continues to perform strongly. Infant formula gross revenue to Australian major grocery and and pharmacy chains were up 67% quarter on quarter.
China
The company also pointed to a recovery of China demand. Group gross revenue to cross-border e-commerce (CBEC) was up 10% with Bubs infant formula CBEC revenue up 15%.
Gross revenue to the corporate daigou channel was up 166%, with Bubs infant formula gross revenue to corporate daigou channel up “17x”.
Bubs also said that its adult milk powder gross revenue (predominately CapriLac) was up 6% across all channels, with CBEC rising 4% year on year and 42% quarter on quarter.
International expansion
Bubs said that its quarterly international gross revenue was up 224% year on year and up 48% quarter on quarter (including ingredient sales), with Bubs products revenue growth of 56% quarter on quarter.
In the US, the first batches of the FDA label compliant Aussie Bubs goat and milk toddler formula products produced and shipped for sale on Walmart.com and Amazon.com in September.
Outlook for Bubs and the share price
Bubs said that it has made good progress in executing its COVID-19 recovery strategy. It said it’s well placed to return to “accelerating topline revenue growth in FY22”, but the pandemic continues to have an effect with lockdowns and so on.
The growth is not what the company would have liked in 2021, but it’s good to see that it is steadily growing. The domestic performance in Australian retail looks good, as well as the international growth. Those two areas could power the business forwards as they become larger parts of the overall picture.
Today’s low(er) price may represent a high-risk, long-term opportunity. But I’d expect plenty of volatility ahead.
There are other ASX growth shares that may have easier paths to good profit growth.
