Shares down as Bellamy’s returns to trading

11-Jan-2017 - Last updated on 11-Jan-2017 at 11:54 GMT

Bellamy's has a new CEO, with Andrew Cohen temporarily at the helm.

There have been changes at Australian formula makers Bellamy’s as CEO Laura McBain has stepped down and been immediately replaced with former COO Andrew Cohen taking over in a temporary capacity.

Bellamy’s shares also returned to trading on the Australian Stock Exchange after being suspended since December 12, and while the price rallied to close at A$5.35 (US$3.95) from a low of A$4.35 (US$3.21), this still represents a significant drop from the A$14.99 (US$11.07) shares stood at in August 2016.

The company said its revenue and profitability had been impacted by lower-than-expected sales, increased inventory levels, and shortfall payments.

Revenue for the six months to December 31, 2016 is expected to be A$115m to A$120m (US$85m-88.6m); in December it forecast around A$120m.

Annual revenue is expected to be A$220m to A$240m (US$162.5m-177m), with annual pre-tax earnings of A$22m to A$26m (US$16m-17.7m).

There have also been changes to Bellamy’s relationship with New Zealand dairy giant Fonterra.

The companies have amended their five-year manufacturing contract by three years, and Fonterra can terminate its deal if a person, or group of persons, acquires 30% or more of Bellamy’s voting shares and in Fonterra’s opinion that person or group has effective control over Bellamy’s.

The company suspended trading in December after shares initially dropped by more than 40% as it experienced a “temporary volume dislocation until regulatory registrations are completed in China.”