Biome Australia Ltd (ASX: BIO) recently reported a record set of first-half results, which caught the attention of the team at Bell Potter, which has put a bullish price target on the ASX biotech.
So let's have a look at what they reported.
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Records across the board
Biome said in late February that its first half net profit had more than doubled, up 172% to $1.18 million, on record half-year sales revenue of $12.4 million.
This was up an impressive 40% on the previous corresponding period, and the company said it was sitting on an annualised revenue run rate of about $25.8 million coming out of the second quarter of the year.
Biome said in its statement to the ASX that its products were the fastest-growing probiotic range in the Australian community pharmacy, with all of its product range growing.
It was also the number two-ranked brand across all vitamins in the Terry White pharmacy chain.
As the company said at the time:
The Australian pharmacy channel continues to be the primary growth engine. Pharmacy scan data confirms Activated Probiotics is the number 1 probiotic brand by revenue in community pharmacy and number 2 overall when including Chemist Warehouse, and the highest growth brand in the category. Biome Daily is on track to become the number 1 probiotic product in Australian pharmacy by units. Every product in the Activated Probiotics range grew through the half, with particularly strong performance from Biome Baby, Biome Dental, Biome Her and Biome Daily Kids.
Biome was also set to launch its first major above-the-line advertising campaign, coming into the Australian winter season, advertising across digital, outdoor, and co-branded activity with key retail partners.
Looking beyond the first half results, the company also announced a distribution deal for its probiotic products in Canada in January with a company called FullScript Canada.
Shares looking cheap at this ASX biotech
The team at Bell Potter have looked at the recent profit report and likes what they see.
As they said:
Biome maintained sales momentum in Australian Pharmacy as well as introduced new retail channels with Mecca (beauty vertical) and Go Vita (health food). Same store sales growth continued to be strong across all banner groups and every product in the portfolio grew its sales over the period. Biome continues to progress planning for its long-awaited onshoring initiative. It seems like Biome is close to a decision on its path to build greater efficiency, resilience and margin accretion.
Bell Potter has maintained its $1 price target on Biome shares, compared with 42 cents currently.
