Bellamy’s FY19 was a “challenging period” due to regulatory changes, a lower birth rate and increased competition for Chinese demand, the company said yesterday when it announced its results for the 2019 financial year. 

CEO Andrew Cohen said the company would defer its medium-term target of $500 million revenue by 2021 due to the ongoing regulations process. The company has been waiting more than a year for State Administration of Markets Regulations (SAMR) registration from Beijing. 

The challenges saw Bellamy’s full-year profit almost halve to $21.7 million in FY19, down from $42.8 million in FY18. Net revenue was $266 million and normalised EBITDA was $47 million (17.6 per cent). 

Bellamy’s statement to the ASX said its rebranding will return the business to growth and has been gaining momentum since its March launch. Cohen said: “Our transformational rebrand demonstrated strong momentum through the Q4 period. The business enters FY20 with a clean balance sheet, positive consumer momentum and a healthy trade dynamic."

The company said it has doubled its investment in marketing, and its China capability to “better activate the brand and engage consumers”. 

“Trade and channel economics have also been reset to better incentivise trade partners, including the daigou, social networks and e-commerce platforms.

“Many of these changes required short-term trade-offs impacting the FY19 financial result, including a one-off  write-down of legacy-label inventory and a deeper level of Q3 destocking and trade change-over than originally anticipated. This reset is now complete, and the business enters FY20 with a clean balance sheet, positive consumer momentum and a healthy trade dynamic,” it said. 

This, along with “a breakthrough new product pipeline”, a strong balance sheet and cash conversion will support its growth agenda, with $112.4m in net cash.



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