Shares in Bellamy’s Australia surged after the organic infant formula maker upgraded its revenue and profit guidance.
At the close, the shares were up almost 25% to $13.68.
The company, whose spectacular growth via China suddenly stalled in 2016 following regulatory changes, today upgraded its full year guidance for revenue growth of its core business to between 30% and 35%, up from 15% to 20%.
Bellamy’s also upgraded its EBITDA (Earnings Before Interest, Taxes, Depreciation and Amortisation) margin guidance to 20% to 23% from 17% to 20% driven by a combination of cost management and the impact of stronger revenue growth.
The guidance excludes the Camperdown unit, a milk powder processing business it bought for $28.5 million last year. This is forecast to generate an EBITDA loss of between $1 million and $2 million in 2018.
“We are pleased to see that our turnaround plan is continuing to gain traction,” says Andrew Cohen, Bellamy’s CEO.
The company also announced it is buying the remaining 10% interest in Camperdown it doesn’t own for $3.6 million.
Bellamy’s is awaiting an announcement by China authorities on Camperdown’s registration for powder products.
“The market will be informed when the CFDA (China Food and Drug Administration) registration application is ultimately determined,” the company says.