Ann: FY20 Q3 Activities Report and Appendix 4C Cashflow Statement, page-36

Bubs Australia (ASX:BUB) drops glowing quarterly report despite coronavirus crisis

ASX:BUB MCAP $487.4M

Josh Smith Markets Reporter [email protected] 14 April 2020 17:53


Founder & CEO, Kristy Carr
Sourced: The Australian

• Infant formula specialist Bubs Australia (BUB) pulled in record revenue over the March quarter while COVID-19 tore through the economy
• It seems baby formula made the shopping list of many panic buyers, with sales up 137 per cent compared to the same time last year
• Overall revenue came in at $19.7 million for the quarter — 67 per cent higher than the year before and 36 per cent up quarter-on-quarter
• Bubs saw a surge in demand both locally and in China as COVID-19 spread
• Moreover, Bubs has $36.4 million in cash reserves in case things turn sour
• Though the announcement was made after market close, shares in Bubs still gained 12.99 per cent today to close worth 87 cents each

Infant formula maker Bubs Australia (BUB) is one of the few companies to weather the COVID-19 storm exceptionally well.
In its latest quarterly report released in an aftermarket announcement today, Bubs said it pulled in record quarterly revenue over the March quarter of 2020 of $19.7 million. This is 67 per cent higher than over the same quarter in 2019, and 36 per cent higher than the December quarter.
Bubs told shareholders its supply chain would not be impacted by the coronavirus back in March. In fact, the company upped its inventory in response to a surge in demand as baby formula made panic-driven shopping lists.
As such, while February 21 marked the start of the market crash brought about by COVID-19, Bubs' share price has completely recovered and is now sitting 10 per cent higher than it was on that date.
While the company also created cereals, rusks, and baby-appropriate snacks, Bubs Founder and CEO Kristy Carr said it is the infant formula range that performed particularly well over the tough retail environment.
According to Kristy, sales of the Bubs infant formula ranged increased 137 per cent over the same period in 2019, and 33 per cent quarter-on-quarter.
"This quarter demonstrated the strength of our business model and agility of our team to continue to meet the needs of our Bubs Family in a challenging operating environment, and I am pleased that we have been able to maintain our sales momentum and deliver on our main objectives," Kristy said.
"As a result, the company delivered positive operating cash flow of $2.3 million for the period, providing us with a strong cash balance of $36.4m at the end of the period and significant financial flexibility to take advantage of a dynamic and evolving market," she added.
Bubs has already surpassed its 2019 full-year revenue in just three quarters, with year-to-date revenue at $48.5 million for 2020.
Moreover, should things turn sour for the company from COVID-19, Bubs has $36.4 million in cash reserves with a positive operating cash flow of $2.3 million for the quarter.
Along with a boost to domestic demand, Bubs more than doubled direct sales into China over the March quarter.