Bellamy’s has upgraded its full year guidance following better than expected revenue growth for its infant formula business.
The company, in the middle of a turnaround plan after it hit a sales road block in China last year, says early results for 2018 have been positive.
Bellamy’s is upgrading its full year guidance for its core business to 15% to 20% revenue growth from 5% to 10% and its EBITDA (earnings before interest, tax, depreciation and amortisation) margin to 17% to 20%, up from 15% to 20%.
The company says it expects first half revenue to be higher than this year’s second half.
Shares in Bellamy’s jumped Wednesday by 12% to $9.78. The price rose after the company paid a $66,000 penalty over alleged breaches continuous disclosure obligations.
However, Bellamy’s says there are still challenges to navigate including registration in China.
The guidance excludes the Camperdown business which is forecast to an already-announced generate an EBITDA loss of $1 million to $2 million.
Camperdown Powder, which produces milk power, in August had the suspension of its license lifted by the Certification Accreditation Administration (CNCA) in China.
Camperdown’s certification was suspended soon after Bellamy’s closed the purchase of the Victorian business.
The licence is seen as a key strategic acquisition, a route to the China market for Bellamy’s. The company paid $28.5 million for an indirect 90% interest in Camperdown Powder.
Bellamy’s spectacular growth via China suddenly stalled late last year following regulatory changes.
The fallout from falling sales claimed the scalp of CEO Laura McBain, stripped millions of dollars from the market capitalisation and sparked a shareholder revolt which ended with a change in the board of directors.