Bellamy’s share price has risen by 6.16% at the time of writing, following a strong financial performance in 2018.
Meanwhile, Bellamy’s Australia Limited [ASX:BAL] near-to-medium-term outlook remains positive as their three-year growth strategy takes effect.
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Bellamy’s share price benefits from new business model
Bellamy’s has largely benefited from its new, more sustainable business model.
Bellamy’s Australian-label formula per tin product has improved by 30%, with direct cost from each formula tin improving by 25%. This was achieved through driving productivity.
In similar news its revenue grew by 48% here in Australia, and had over a 65% increase EBITDA (earnings before interest, tax, depreciation and amortisation).
The company also invested $39 million in its supply-chain, as well as doubled its marketing spending from 2.5% to 5% of revenue.
This, along with a refreshing of Bellamy’s brand, new product development and improved marketing capability, has been supporting Bellamy’s rising share price.
Bellamy’s 2019 performance forecast
Bellamy’s expects that its 2019 performance will be impacted by slower category growth as well as an increasingly competitive environment.
Next year, Bellamy’s will be focusing on brand and product upgrades, which look at new functional ingredients and using locally sourced milk, as well as new food and formula lines — as reported by a recent ASX announcement.
But it appears by the second half of 2019, things will have settled and investors can anticipate a return to usual trading.
For Money Morning
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