Bubs Australia in huge revenue growth plan linked to Asia

Goats milk infant formula manufacturer Bubs Australia believes it has the world before its feet. Where does it think it can expand?

Bubs Australia believes it can massively increase its gross revenue for goat milk products over the next five years. Picture: Andy Rogers

GOAT milk infant formula manufacturer Bubs Australia believes it can achieve 46 per cent compound annual growth to hit revenue of $400 million within five years, a huge increase from this year’s $62 million.

Addressing the company’s annual general meeting today, co-founder and managing director Kristy Carr said Bubs Australia had delivered a compound annual growth rate in revenue of 150 per cent since listing on the Australian Securities Exchange in 2017 and was confident of achieving $400 million in sales by 2025 despite uncertainty in the short term.

“We know the opportunity over the next five years beyond Australia is substantial in the market segments we excel in,” Ms Carr said.

“While we acknowledge the uncertainty of the business outlook in FY21 and the potential impact short term, we remain confident about our medium to long term strategy.

“In this light, we can realistically aspire to a 46 per cent revenue compound annual growth target, which would take us to circa $400 million in gross sales by the end of 2025.”

Bubs’ gross sales revenue of $62 million for the 12 months to June 30 this year was 32 per cent higher than 2018-19.

Ms Carr said the solid financial performance was due to strong infant formula growth and direct sales to China.

Infant formula sales now accounted for 55 per cent of Bubs’ gross revenue.

The company now had more than 40 product lines ranging from infant formula, adult goat milk products, teething rusks, organic cow infant formula to vitamin and mineral supplements.

Ms Carr said regional growth during the past three years since listing had resulted in 30 per cent of revenue derived from export markets, compared with 16 per cent in 2017.

“China remains our lead market at 21 per cent of gross revenue, however the five-fold increase in southeast Asia, predominantly Vietnam, demonstrates the viability of our international expansion strategy,” she said.

“We continue to focus on Vietnam as a key market for us.

“We have also looked to Malaysia.”

Bubs chairman Dennis Lin said expanding the Asian footprint to nations other than China was a key focus of the third phase of the company’s development for long-term sustainable growth.

Mr Lin said Bubs had also set its sights on the US as well.

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Peter Hemphill’s family owns shares in Bubs Australia.