Investing
Bubs Australia falls after mounting new strategy, outlook amid board overhaul
© Reuters.
By Rishav Chatterjee
(Reuters) -Shares of Bubs Australia pared most of their early losses on Thursday after opening about 9% lower, as the embattled baby formula maker launched a five-point plan to reduce operating expenses and cash burn.
Bubs has been focussing on streamlining its businesses locally, in China and the West and said it expected monthly cash burn to fall to A$2 million ($1.33 million) by the second quarter of 2024 from A$5 million at present.
Shares were down 2.2% to A$0.22 as of 01:13 GMT after dropping as much as 8.9% earlier.
Tony Sycamore, market analyst at IG Australia, said the initial reaction to dump Bub’s stock was a “little surprising”.
“The new plan has potential to stop rot in shareholder value, given its focus on cutting operating expenses and reducing cash burn. However, the devil is in the detail and how well Bubs can deliver,” he added.
As part of the latest strategy, Bubs has revamped its distressed China operations with new leadership and is assessing State Administration for Market Regulation registration for China for its products.
While Bubs’ minority shareholders, controlling 5.04%, are currently seeking to remove all the four non-executive directors at an extraordinary general meeting, the company said it would work on improving transparency and governance.
The minority shareholders has nominated former a2 Milk Asia head Peter Nathan to be the new CEO.
In May, Bubs removed ex-CEO and founder Kristy Carr during a dispute with largest shareholder, Alibaba-backed private equity firm C2.
“The Board is confident that we now have the right governance structure and operational teams to deliver strong and profitable growth,” said Chair Katrina Rathie, who is seeking to hold her position at the EGM later this month.
The company said it expected net sales revenue to grow 35% to A$80 million for 2024, and gross profit margin of 40%.
($1 = 1.5029 Australian dollars)
Read the full article here
-
Side Hustles6 days ago
Mark Zuckerberg Is Now Second Richest Person in the World
-
Investing6 days ago
Nvidia CEO Jensen Huang: Demand For Blackwell AI Is Insane
-
Side Hustles6 days ago
Meta Previews Movie Gen, AI Tools That Turn Dreams to Videos
-
Investing4 days ago
Hurricane Helene Hits Spruce Pine Mine, Quartz Used for Tech
-
Investing5 days ago
Israel stocks lower at close of trade; TA 35 down 0.23% By Investing.com
-
Investing6 days ago
BCA says investors should fade the real estate rally By Investing.com
-
Passive Income6 days ago
Learn a New Language with This Fresh Approach
-
Passive Income5 days ago
Go Paperless with the PDF Reader Pro for $49.99