Infant-formula business Bubs Australia, which is embroiled in an executive power struggle, has reportedly brought in a local dealmaking company to advise on future strategy.
The Australian Financial Review reported that Bubs Australia has enlisted the help of Melbourne-based Kidder Williams, a specialist in agribusiness and food, to advise on its future direction.
Any additional input into an already-announced strategic review is likely to include advice on the company’s China operation.
At the start of this month, Bubs Australia revealed in a trading update that its China revenue had plummeted.
The publicly-listed business said sales of infant-formula and adult nutrition in the Chinese export market remained well below expectations in April and May and its gross revenue in China for the three-month period until 31 March was down 56% year-on-year.
Bubs Australia’s current distribution agreement with Willis Trading for Bubs goat formula, organic grass feed formula and Caprilac adult goat nutrition concludes at the end of this month.
The company will also hope a positive outcome for a strategic review will help shore up its share price. At the close of play today (21 June) on the Australian Securities Exchange (ASX), Bubs Australia’s shares were being traded at AUD0.19 ($0.14) against a 52-week high of AUD0.68.
Meanwhile, there is a fight for control of the business.
Founder and former chief executive Kristy Carr was fired from the company in the May, off the back of chairman Dennis Lin’s departure. The board said she was removed due to her failure to “comply with reasonable board directions”.
Now, a group of shareholders, including Carr and Lin, has requested an AGM following the founder’s departure. They are aiming to remove Katrina Rathie, Steven Lin, Paul Jensen and Reg Weine as non-executive directors of the company and appoint James Jackson, Peter Nathan and Rupert Soar in their stead.
In more positive news, Bubs Australia announced today its US business continues to build momentum. It achieved its first $1m month on the Amazon e-commerce platform in May
Former Mars, Danone and Lactalis man Chris Lotsaris, who is already with the business, has been appointed general manager of its US operations and will take up his appointment this month.
Bubs Australia, which started to sell its infant-formula in the US last year after a health scare crisis-induced shortage of products there forced the country to open up its market to imports, said it remains on track to meet all regulatory milestones for permanent access to the US market.
Just Food has sought confirmation of the advisory company’s appointment from both Bubs Australia and Kidder Williams.
