On the last day of the ASX reporting season, Bubs Australia Ltd (ASX: BUB) shares entered a special 2+2 trading halt. Meaning, Bubs shares cannot be traded until the earlier of four trading days, or when the company releases an update to the market about its capital raising.
Bubs Australia is a leading producer of goat milk products for infant formula and baby food pouches, as well as adult milk powder and fresh milk varieties. The company has a manufacturing plant in Dandenong, Victoria, and sources its milk and powder from herds in Australia and New Zealand to be consumed locally and in China.
Here the high-level numbers from the Bubs report:
- Revenue up 24% to $54.64 million
- Infant formula revenue up 58% to $30 million
- China direct revenue up 32% to $13 million (this includes sites like Alibaba’s Tmall)
- Cash receipts from customers up $25.5 million to $65.5 million
- Cash in the bank of $26 million
- Debt facility of $10 million, with $2 million drawn
- Loss after tax of $7.78 million, up from a loss of $35.58 million
“Thanks to the foundations laid by the Company over the last two years, Bubs has enjoyed a year of solid revenue trajectory across all core products and in all key markets,” Co-founder and CEO Kristy Carr said.
“Infant Formula continued be our key driver and most profitable growth engine generating $30 million in revenue, up 58 percent, driven by strong growth in domestic retailers, Junior Nutrition innovation and expansion into Vietnam.”
Bubs Capital Raising
In an odd twist, Bubs released its results and asked for a four-day trading halt while it undertakes a capital raising.
Despite releasing a 62-page annual report, 32-page investor presentation and five-page media release, Bubs Australia’s management team and the board chose not to include any details of its capital raising to their shareholders. We’re disappointed this information wasn’t provided alongside the results.
Fortunately, The Australian Financial Review was able to inform investors and shareholders (dare we suggest it might even help the company and its deal makers attract institutional investors).
According to AFR reporting, the company is expected to raise $38.3 million, with $28.2 million to come from institutions and the remainder by way of a share purchase plan (SPP). The deal is expected to be priced at $0.80, or 12 cents (13%) below Bubs’ share price on Friday.
As Rask Media recently reported, Bubs announced it would acquire an ownership interest in an infant formula manufacturing facility in China. The facility is owned by its Chinese joint-venture partner, Beingmate.
It’s expected some of the money from this week’s capital raising will be put towards the joint venture deal.
