Bellamy’s Australia Ltd upgrades FY18 guidance

Credit: Bellamy's

Bellamy’s Australia Ltd (ASX: BAL) released a late trading update today about its FY18 guidance and also its stake in Camperdown.

Over the past year Bellamy’s share price has grown by 169%, recovering almost all of the losses it suffered at the end of 2016.

This evening, Bellamy’s may have shown the market that it is now back to where it was.

FY18 Trading Update

The company advised the market that based on unaudited results Bellamy’s is upgrading its full-year FY18 guidance for its core business’ (excluding Camperdown) revenue growth from  15% to 20% to an improved revised target 30% to 35%.

Bellamy’s also updated its earnings before interest, tax, depreciation and amortisation (EBITDA) margin guidance from the old target of 17% to 20% previously to the new range of 20% to 23%. The improvement was created by a combination of cost management and the stronger revenue growth.

The above numbers exclude the Camperdown expected EBITDA loss of $1 million to $2 million. The guidance is dependent on any contingent liabilities, such as class actions.

Bellamy’s continues to expect the first half-year revenue to be higher than the second half due to seasonal factors.

Acquisition of remaining 10% of Camperdown

Six months ago, Bellamy’s announced that it had acquired 90% in Camperdown, a CNCA licensed powder products blending and canning line in Braeside, Victoria for $28.5 million.

Today, Bellamy’s signed a binding purchase agreement to buy the remaining 10% of Camperdown for approximately $3.6 million and conditional upon obtaining CFDA approval.

CFDA Registration update

Bellamy’s also gave an update about its CFDA registration in the ASX release.

Camperdown’s CFDA registration application was submitted for Bellamy’s branded products in late calendar 2017. The business will provide a further update when the registration is determined.

The company noted that a parallel CFDA registration application for a major customer of Camperdown has recently been approved by the CFDA.

Foolish takeaway

Bellamy’s has truly turned the ship around. The business is expecting serious growth this year and seems to be capitalising on the baby formula boom again. It’s hard to say if it’s a buy or not at this price, it depends if the revenue growth can be sustained in FY19 and beyond.

Bellamy’s isn’t the only one growing well, these top growth shares could also be impressive.

Top 3 ASX Blue Chips To Buy In 2018

For many, blue chip stocks mean stability, profitability and regular dividends, often fully franked..

But knowing which blue chips to buy, and when, can be fraught with danger.

The Motley Fool’s in-house analyst team has poured over thousands of hours worth of proprietary research to bring you the names of "The Motley Fool’s Top 3 Blue Chip Stocks for 2018."

Each one pays a fully franked dividend. Each one has not only grown its profits, but has also grown its dividend. One increased it by a whopping 33%, while another trades on a grossed up (fully franked) dividend yield of almost 7%.

The names of these Top 3 ASX Blue Chips are included in this specially prepared free report. But you will have to hurry. Depending on demand – and how quickly the share prices of these companies moves – we may be forced to remove this report.

Click here to claim your free report.

Motley Fool contributor Tristan Harrison has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

Two New Stock Picks Every Month!

Not to alarm you, but you’re about to miss a very important event! Chief Investment Advisor Scott Phillips and his team at Motley Fool Share Advisor are about to reveal their latest official stock recommendation. The premium “buy alert” will be unveiled to members and you can be among the first to act on the tip.

Don’t let this opportunity pass you by – this is your chance to get in early!

Simply enter your email now to find out how you can get instant access.

By clicking this button, you agree to our Terms of Service and Privacy Policy. We will use your email address only to keep you informed about updates to our website and about other products and services we think might interest you. You can unsubscribe from Take Stock at anytime. Please refer to our Financial Services Guide (FSG) for more information.