BOD Australia Ltd - Q3 Report: Rapid growth trajectory continues following strong product uptake
BOD Australia Ltd (ASX:BDA)

Q3 Report: Rapid growth trajectory continues following strong product uptake

Highlights

What's happened?

Bod Australia Ltd (ASX: BDA, “Bod”) have announced their Q3 FY2020 results, which showed a 135% increase in revenue on Q2 FY2020, to A$1.257m.

What are the key highlights?

  1. $1,257,000 in sales generated for the quarter, which is a 135% increase on Q2 FY 2020 (~$536,000). Additional binding purchase orders of $1m also to be received and invoiced this quarter.
  2. Revenue for the 9 months of FY2020 totals $3.4m, representing 144% growth on PCP(~$1.4m).
  3. Q3 FY2020 cash burn decreased by ~62%on PCP and 55% on Q2 FY2020, despite strategic investments in innovation, management and R&D.
  4. Import permits granted for two new MediCabilis® products which broadens addressable market by ~32% and provides opportunities to further grow prescription volumes.
  5. Nine hemp seed oil products launched under the Swisse brand into 2,000 stores –stockists include Coles, Chemist Warehouse and Priceline Pharmacies.
  6. Cash balance of ~$7.2m allows Bod to pursue multiple revenue generating opportunities.

What does this announcement mean?

Erik Bergseng CFA® from Mawson Graham provides perspective on this recent announcement.
Erik Bergseng CFA®
Written by Erik Bergseng CFA®
Published Apr 21, 2020

Bod Australia is demonstrating significant quarterly revenue growth. After achieving $536k in Q2 FY2020, this has increased by 135% to $1.257m in Q3 FY2020. Furthermore, Bod has flagged that additional binding purchase orders of $1m will be received and invoiced this quarter. Looking ahead, management have stated that they are confident that this revenue growth will continue into the current quarter. The cost base of the company is also consistent from quarter to quarter. We believe that all of the above is a very strong indicator that the company's channels to market are effective and that demand for the company's products are strong. Bod also have significant cash on hand of A$7.2m, which will help the company fund continued growth initiatives, such as leveraging their strategic partnership with H&H. One of these growth initiatives, which included the launch of 9 new products into 2,000 reputable stores including Coles, Chemist Warehouse and Priceline Pharmacies should contribute significantly to revenue growth in future reporting periods.

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CEO's Summary

Jo Patterson

“The March quarter was highlighted by significant sales growth, further expansion of our product ranges and an expansion of the Company’s overall addressable market. ... The Company achieved a considerable increase in sales for the period and has now comfortably eclipsed the previous financial year. Bod is continuing to witness a strong demand for its products and we are confident of surpassing Q3 sales in the current quarter. ... We have maintained a healthy cash balance of ~$7.2m, which provides the flexibility to aggressively pursue multiple revenue generating opportunities. Bod has a strong product development pipeline and has earmarked a number of international markets. Board and management are pursuing a number of growth objectives and we look forward to updating shareholders in the coming months."

Jo Patterson
CEO, BOD Australia Ltd

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