Bubs Australia unveils new strategy, outlook amid board overhaul (updated)

Heritage Global

06/07/2023 01:02

(Recasts first paragraph, outlook details in paragraphs 2 and
3, chair comment in paragraph 7, adds background)
       July 6 (Reuters) - Bubs Australia  BUB.AX  on Thursday
launched a five-point plan to manage working capital and
optimise its portfolio, forecasting a 35% growth in net sales
revenue for fiscal 2024.
    The company expects to report a net sales revenue of A$80
million ($53.23 million) for its full year 2024, and also
trimmed its annual operating expenses by around A$10 million but
will continue to maintain its marketing investment at 15% of net
sales.  
    Bubs, which has been focussing on streamlining its business
activities locally, in China and the west, expects monthly cash
burn to slump to A$2 million during the second quarter of 2024
from A$5 million. 
        While Bubs' minority shareholders are currently seeking
a board overhaul and have requested for an extraordinary general
meeting to vote out the current board of directors, the company
said it would work on improving transparency and governance.
    As part of the latest strategy, the New South Wales-based
company has revamped its distressed China operations with new
leadership and trade partners and is assessing State
Administration for Market Regulation registration for China for
its products.
    The baby formula maker recently had its former boss and
founder Kristy Carr removed during a dispute with its largest
shareholder, Alibaba-backed  9988.HK  private equity firm C2.
        "The Board is confident that we now have the right
governance structure and operational teams to deliver strong and
profitable growth," Bubs Chair Katrina Rathie, who is seeking to
hold her position at the EGM later this month, said on Thursday.
 
        Bubs reaffirmed its long-term plan of securing permanent
access to the U.S. market for its products from the Food and
Drug Administration (FDA) while growing further into the major
retailers in the United States.

             
    ($1 = 1.5029 Australian dollars)

 (Reporting by Rishav Chatterjee in Bengaluru; Editing by Shweta
Agarwal and Sherry Jacob-Phillips)
 ((Rishav.Chatterjee@thomsonreuters.com;))