Bellamy’s Australia share price drops by 2.3% to sit at $9.75

While it’s not news that the company has seen a troubling continuing decline in the past six months, it’s unclear exactly why Bellamy’s Australia Ltd [ASX:BAL] saw a considerable drop today.

Bellamy’s share price dropped by $0.24 at time of writing, now sitting at $9.75 a share.

Bellamy’s Australia Limited is a major food and beverage company and is the parent of Bellamy’s Organic — Australia’s largest organic infant formula producer.

The faith of both consumers and investors was tested late last month after attempt to underpin wild gyrations in the share prices of Bellamy’s and BWX over the past year.

A re-cap of Bellamy’s 2018

The companies have fluctuations in their stock prices this year, rising on promise and falling in results, according to The Australian Financial Review.

Bellamy’s saw a peak in their share price in March this year but have seen continuing disappointing results since.

Despite a great deal of uncertainty, both companies have described 2018 as a ‘transformative’ year and are continuing to talk-up long-term prospects for the businesses and the global trends underpinning consumption.

Despite the bad news, The Sydney Morning Herald reported last month that Bellamy’s share price had tripled since former boss Laura McBain left the company due to controversial circumstances last year.

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Good news coming soon for Bellamy’s?

The results issued late last month reported BWX grew at 8.4% in 2018, above total category growth of 7.6%, while Bellamy’s predicted it would take growth revenue from the $329 million seen in 2018 to $500 million by 2021.

But the companies’ shorter-term performance and outlook doesn’t quite match up.

BWX’s biggest worry has been the increasingly slow growth of its Australian flagship brand, Sukin. The company’s revenue grew a measly 6.1%, down from 54% the previous year, despite BWX launching sales into Coles supermarkets through an exclusive deal.

Even with this special deal, sales in June fell compared to the previous corresponding period.

All in all, it leaves Bellamy’s near-term future looking uncertain.

Regards,

Ryan Clarkson-Ledward,

For Money Morning

PS: Aussie small-cap analyst Sam Volkering has revealed four Aussie stocks he believes could be top performers in 2018. Claim your free ‘The Four Best ASX Stocks for 2018’ report here.


Ryan Clarkson-Ledward is an Editor at Money Morning.

Ryan holds degrees in both communication and international business. He helps bring Money Morning readers the latest market updates, both locally and abroad. Ryan tackles all the issues investors need to know about that the mainstream media neglects.

Ryan is also the Editor of Australian Small-Cap Investigator, a stock tipping newsletter that hunts down promising small-cap stocks by dissecting the latest events affecting the world.

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