Strong start gives Bellamy’s a boost

BELLAMY’S Australia has upgraded its full-year earnings forecast for its core infant formula business, but expects its Camperdown cannery to remain a drag.

The Launceston-based group has flagged revenue growth — excluding the impact of the cannery — of 15 to 20 per cent in the year to next June.

It compares with a previous forecast of 5 per cent to 10 per cent growth.

Citing a positive start to the financial year, Bellamy’s yesterday also raised the bottom end of its forecast earnings range, with growth expected at 17 per cent to 20 per cent.

It compares with its August estimate of 15 per cent to 20 per cent.

Bellamy’s shares surged 25 per cent over three trading sessions before the forecast upgrade.

It added another 45c, or 4.6 per cent, yesterday to close at $10.23 — its highest close since early December.

The company reiterated its previous advice that secondhalf revenue would be lower than in the first half because sales of Chinese-labelled Bellamy’s products would cease due to delays in obtaining China Food and Drug Administration registration.

“While Bellamy’s sees positive momentum in its core business, there are still challenges to navigate, including CFDA registration, as it implements its turnaround plan,” the company said in a statement.

The Camperdown cannery that Bellamy’s bought at Braeside, in Melbourne’s southeast, in June is still forecast to generate an earnings loss of $1 million to $2 million.

Bellamy’s said it would also be subject to ongoing class actions and amortisation of intangible assets arising from the acquisition.