The Bubs Australia Ltd (ASX: BUB) share price will be one to watch when trading resumes this morning. That's after the company released a trading update for the June quarter.
At market close yesterday, shares in the dairy producer were trading for 46 cents – up 4.55%.
Let's take a closer look at today's news.
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Why the Bubs share price will be one to watch
In a statement to the ASX, Bubs Australia gave an update on its cash position and activities during the last quarter. Overall, the company experienced a cash outflow of approximately $8.5 million for a total cash position of $27.8 million.
The main contributor to this position was a $3.4 million loss in operating activities and a $5 million investment in the business.
Despite operations producing a net outflow, revenue for the quarter was up 8% on the previous quarter to $12.8 million. It was down 4% on the prior corresponding period (pcp), however. Customer receipts for the quarter was $9 million. Total revenue for FY21 was $46.8 million – a 24% downturn on the pcp.
There are also signs the Chinese market is picking up again. Sales to this customer base were heavily disrupted by the impacts of COVID-19. However, e-commerce sales to China are up 10% on the pcp, including a 15% uptick for infant formula specifically.
Sales to the corporate daigou channel (CDC) are up 166% across the group. Infant formula sales to the CDC are 17 times higher on the pcp.
Total international sales are up 224% on the pcp and 48% on the previous quarter. Bubs Australia previously announced it was moving into the US market. The Bubs share price rocketed 17% on the day of that announcement.
Management commentary
Bubs Australia CEO Kristy Carr said:
Bubs Australia continues to make solid progress on its COVID-19 recovery journey despite what has been a difficult year, reflecting our agility in responding to dynamic market conditions and the strength of our brand promise, delivering increased half-on-half revenue growth, as foreshadowed at our interim results.
The company closed the fiscal year comfortably with continued quarter-on-quarter growth momentum. Domestic sales increased 9 per cent on prior quarter and further market share increases were achieved.
It should be noted while domestic sales were 9% higher on the previous quarter, they were also down 29% on the pcp.
Bubs share price snapshot
Over the past 12 months, the Bubs share price has plummeted 49.5%. The S&P/ASX 200 Index (ASX: XJO) is up 23.4% over the same time. Year-to-date, Bubs shares are down about 23%.
Bubs Australia has a market capitalisation of around $282 million.
