Ann: Quarterly Activities/Appendix 4C Cash Flow Report, page-20

Saintex - the BUB report mentioned that the higher than expected gross margin was. partly due to the favorable exchange rate.

NZD is similarly low with respect to the USD (A2 Milk is a Kiwi company). I suspect when A2M report next month that they will show similar positive benefit from the exchange rate. From memory, their China label sales are transacted in USD.

I noticed in the BUB report there was already a large reduction in the quarterly staff cost from Q1 to Q2 - about $1M or 25% reduction.

It's a bit perilous to compare A2M and BUB for various reasons but mostly the difference in scale. A2M still outsources a majority of its manufacturing. For a smaller company like BUB which operates its own plant you would definitely expect staff costs to be higher as a proportion of revenue. But potentially there is an economy of scale that can be achieved if they can grow sales from here whilst constraining staff costs to where they are.

For me the only area they can potentially cut is marketing spend, but they don't have a strong enough brand recognition or loyalty to cut this back. In Australia, I always see BUB products discounted, which also can't be good for their longer term pricing power.