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.
