Infant formula Bellamy's chief executive Laura McBain has stepped down.
Infant formula Bellamy's chief executive Laura McBain has stepped down.
The chief executive of troubled baby formula maker Bellamy's is stepping down in the wake of its disastrous share price plunge.
Laura McBain has stood down with immediate effect and will be temporarily replaced by chief operating officer Andrew Cohen.
It comes after weeks of speculation about divisions among thecompany's board members over who should run the company, which has suffered a massive hit to its bottom line after the Chinese government tightened import regulations.
Bellamy's shares have been suspended from trade since mid-December after the company warned of weaker than expected sales, causing the share price to drop to a low of $6.80 from a high of $16.50 this time last year.
Things only got worse when the trading suspension was lifted, with investors slashing hundreds of millions of dollars from Bellamy's market capitalisation by trading its shares down by 31.4 per cent to $4.68.
Shareholders are livid and the company is now facing a class-action lawsuit backed by Maurice Blackburn, following allegations that Bellamy's failed to issue a market update despite having figures that showed its domestic sales had fallen drastically.
Confidential supermarket and pharmacy sales data revealed that Bellamy's market share plunged from 25 per cent of the domestic infant formula sales in April to just 12 per cent by October, Fairfax Media reports.
"Laura has overseen the growth of the company over the past decade since she joined Bellamy's as general manager in 2006, including the expansion of Bellamy's markets and its brand," chairman Rob Woolley said.
"I would like to thank Laura for her contributions to Bellamy's over the last 10 years."
After a comprehensive review of its performance, trading and supply agreements, the company said its revenue and profitability had been impacted by lower- than-expected demand for Bellamy's infant milk formula, which had led to lower- than-expected sales, increased inventory levels, excess ingredients and shortfall payments to suppliers.
Laura has overseen the growth of the company over the past decade since she joined Bellamy's as general manager in 2006, including the expansion of Bellamy's markets and its brand.
Revenue for the six months to December 31, 2016 is expected to be in the range of $115 million to $120 million, slightly weaker than its forecast from December of around $120 million.
Annual revenue is expected to be in the range of $220 million to $240 million, weaker than in the previous year, while annual pre-tax earnings are expected to more than halve from a year earlier, to between $22 million and $26 million.
A key factor in the earnings drop is changes to a key manufacturing contract with Fonterra that will result in extra costs and less production, and Bellamy's said it had also initiated a program to cut costs.
Bellamy's shares were down $2.19, or 32.8 per cent, at $4.49 at 3.10pm AEDT, down from the $12.13 they closed at on December 1, prior to its first earnings warning.
