The Bubs Australia Ltd (ASX: BUB) share price isn't joining in the broader market rally today.
Shares in the ASX infant formula company closed on Friday trading for 13.5 cents. In early afternoon trade on Monday, shares are changing hands for 13.2 cents apiece, down 2.2%.
For some context, the All Ordinaries Index (ASX: XAO) is up 0.9% at this same time.
This comes following the release of Bub's unaudited financial results for the quarter ending 30 June (Q4 FY 2024).
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Revenue spike fails to boost Bubs share price
Investor expectations appear to have been high, as the Bubs share price is slipping despite the company reporting Q4 gross revenue of $29.9 million. That's up 50% from the $20.0 million of revenue achieved in Q4 FY 2023.
Following on the strong quarter, full year FY 2024 net revenue of $81.1 million is up 35% from the prior year's $60.1 million. This tops the company's net revenue guidance of $80.0 million.
Q4 operating cash outflow decreased to $3.6 million, a marked improvement from the $13.0 million in cash outflow recorded for Q4 FY 2023. The company cited improved working capital management, cost discipline and operational efficiencies for the reduced outflows.
Still, the Bubs share price could be catching headwinds with the company reporting FY 2024 cash burn of $27.2 million. That figure includes $12.4 million of one-off non-recurring costs. The normalised monthly cash burn came to $1.2 million.
As at 30 June, Bubs held $17.7 million in cash reserves along with $5.0 million of bank facilities for a total of $22.7 million of available cash liquidity.
The company also said it is continuing to follow the FDA's guidelines and is making "meaningful progress" on its United States clinical trial and US permanent access. 351 patients are now enrolled in the Growth Monitoring Study. Bubs expects FDA approval in October 2025.
What did management say?
Commenting on the results that have yet to lift the Bubs share price, CEO Reg Weine said, "Our key target market, the USA, has delivered exceptional growth for Bubs, with total gross revenue1 of $48.9 million, an increase of 63% on FY 2023."
Weine added:
We expect our new products to perform better than the existing range and our US sales to grow strongly in FY 2025. There is early evidence that our new look tins are resonating with US parents and caregivers.
As for China, Weine said:
While USA expansion remains our immediate priority, pleasingly we are now achieving strong sales growth in China with gross revenue in the second half of FY 2024 of $11.0 million exceeding the first half of FY 2024 of $8.0 million.
And on the home front, Weine noted:
Domestically, we are one of the fastest growing infant formula manufacturers in the category and the fastest growing premium brand, achieving 11% scan sales growth for the quarter versus the total market growth of 2.2%. Pleasingly, Bubs is the largest player in the domestic goat IMF [infant milk formula] market with 52% market share.
With today's intraday moves factored in, the Bubs share price is down 34% over 12 months but remains up just under 2% in 2024.
