The Bubs Australia Ltd (ASX: BUB) share price is lifting today as the company announced its half-year presentation and results.
Shares in the infant formula supplier are currently trading 4% higher at a price of 57.2 cents.
On what's turning out to be a challenging day for the All Ordinaries Index (ASX: XAO), Bubs is outperforming the market so far.
What's lifting the Bubs share price?
The Bubs share price is gaining today as the company reported its first-half results for the period ending 31 December 2020.
In its release, the company said it was "the fastest-growing infant formula manufacturer" across its rivals Coles Group Ltd (ASX: COL), Woolworths Group Ltd (ASX: WOW) and Chemist Warehouse. It has tripled market share and increased retail sales by 55% from the prior corresponding period (pcp).
Moreover, the company's goat infant formula gross revenue to China also rose significantly during the half, up 36% on the pcp. This partly offset the disruption caused by the Daigou channel.
The group brought in $22.2 million of revenue in the first half, down 23% on the first half of FY20.
Gross margin decreased to a $1.5 million loss, primarily driven by a loss in bulk powder sales and a $3.1 million inventory provision.
Bubs maintains a solid balance sheet with $40.2 million in cash.
Management comments
Commenting on the results, Bubs CEO Kristy Carr said:
The external forces brought on by the COVID-19 pandemic led to extensive channel disruption and supply and demand volatility across our sector in 2020.
While not immune to these factors, Bubs' strong foundations, organisational agility and resilient business model delivered solid turnaround momentum with quarter on quarter sales growth following the major COVID-19 driven disruption to the Diagou Channel.
Looking ahead
Management declined to give any detailed financial forecast due to uncertainty surrounding the pandemic. However, the company said it expected to see a modest half on half gross revenue growth in the second half of the financial year.
