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If you purchased Bellamy’s Australia Limited (ASX:BAL) shares between 14 April 2016 and 1 December 2016, inclusive, then you may be eligible to join a proposed class action. Bellamy’s Australia Limited (Bellamy’s) is a public company listed on the Australian Stock Exchange (ASX).

On 2 December 2016, Bellamy’s announced to the market a significant revenue downgrade. Bellamy’s share price dropped by almost half in response to the 2 December 2016 downgrade, resulting in shareholder losses in excess of half a billion dollars.

The ASX subsequently issued a ‘please explain’ to Bellamy’s regarding the timing of its announcements to the market. On 9 December 2016 Bellamy’s entered into a voluntary trading suspension which was not lifted until 11 January 2017, when Bellamy’s announced to the market a “Business Update”, in which it substantially changed its explanation for the downgrades and announced the departure of its Chief Executive Officer. 

ACA Lawyers is investigating whether Bellamy’s has breached its continuous disclosure obligations and/or engaged in misleading or deceptive conduct in relation to statements made to the market in the period from 14 April 2016 to 11 January 2017. 

In anticipation of a potential class action, ACA Lawyers is in discussion with a number of Australian and international litigation funders who have expressed interest in providing funding for a potential class action against Bellamy’s.


When Bellamy’s provided its FY2016 full year results on 19 August 2016 it stated that:

“Underpinning the sales and distribution opportunities in Australia and Asia is a supply chain team that is firmly focused on growing our supply of organic ingredients and manufacturing capacity. Strong forward planning and a commitment from our supply chain to meet the high demand for Bellamy’s products has ensured that not only have we been able to meet the exceptional growth in demand over FY16, but we will be able to supply a substantial uplift in manufacturing volumes from FY17 on.

The strong growth in revenue and earnings over the past 12 months has enabled Bellamy’s to invest back into the business during the second half of FY16 in terms of people, infrastructure and marketing. We will continue this programme, investing a further $15-20 million in FY17 to ensure we have the right platform in place to drive sustainable long-term growth and optimise long-term returns. The purpose of these investments is to build strategic platforms for long-term sustainable growth for shareholders beyond FY17.” 

Following the release of Bellamy’s FY2016 full year results, analysts at the majority of broking houses that cover the stock were tipping Bellamy’s shares would rise by between 30 per cent and 65 per cent over the next 12 months.

In its 2016 AGM presentation released on 19 October 2016, Bellamy’s made a number of positive statements about FY2017, including that:

“During FY2017 we will continue to utilise our growing earnings and cash flows to invest in our supply chain and other initiatives to drive sustainable growth and further optimise longer term returns.”

On 2 December 2016 Bellamy’s released a business update in which Bellamy’s stated:

•    the company expects EBIT margin will be moderately below 20 per cent as a result of investment to underpin long term ambitions of the company; and
•    revenue for 1HFY17 is anticipated to be approximately $120 million with the expectation that 2HFY17 will be similar to the first half.
•    Bellamy’s will continue to experience temporary volume dislocation until regulatory registrations are completed in China;

Following this update, analysts drastically downgraded their forecast NPAT for Bellamy’s for FY2017 and FY2018.

Bellamy’s business update issued on 11 January 2017 stated:

•    Bellamy’s revenue and profitability were impacted by lower than expected demand for Bellamy’s infant milk formula, which also led to increased inventory levels, excess ingredients and shortfall payments to suppliers.

•    “Since the 2 December 2016 trading update, the Company’s sales figures to 31 December 2016 and revenue for 1H17 are expected to be in the range of $115m to $120M.

•    FY17 revenue is expected to be in the range of $220m to $240m.  This guidance reflect the impacts of higher than anticipated stock levels held by Bellamy’s trade customers.”

•    The decision to restructure its China route-to-market by selling directly to Chinese resellers rather than indirectly via Australian retails has resulted in a reduction in Bellamy’s share in infant milk formula sales.  1H17 sales were lower than 2H16 due to increased stock levels held by resellers and retailers.

•    Inventory levels as at 31 December 2016 were expected to be approximately $105m-$110m, with finished product comprising around 75% of this balance.  As A result Bellamy’s is focussing on reducing production.

•    Bellamy’s has amended its manufacturing contract with Fonterra to apportion minimum volume commitments over a longer period of time.

•    Bellamy’s expected gross profit margin for 1H17 is 39-40%, expected to reduce to 32-34% in 2H17.  FY17 overall is expected to be 35-38%.  The expected EBIT is $12m-$14m, representing an EBIT margin of 10-12%

•    CEO Laura McBain is replaced on an acting basis by Andrew Cohen, while a permanent replacement is sourced.  CFO Shona Ollington is replaced by Nigel Underwood, as well as announcing a new appointment of Chief Corporate Development and Legal Officer.  A review of all existing positions in the Executive Team will also be undertaken.

If you purchased Bellamy’s shares in the period between 14 April 2016 and 1 December 2016 inclusive, and you would like to be kept updated on the progress of our investigation, please email us at

To register your interest in the proposed class action please fill out the form below. Registering your interest does not impose any obligation on you to proceed. You will be asked to sign a funding agreement and retainer at a later stage should you wish to participate in the action.