Good morning, shareholders, ladies and gentlemen. On behalf of the Bubs Australia Board, I would like to acknowledge the people of the Wurundjeri Nation, the traditional custodians of the land on which we gather today, and I pay my respects to elders past and present. I also pay my respects to all First Nations people in the Bubs Australia community, including any Indigenous and Torres Strait people here today. I'm Katrina Rathie, the Chair of Bubs Australia. It is my very great pleasure to welcome you to the Bubs Australia 2024 Annual General Meeting. It's slightly after the appointed time of 11:00 A.M., and we have a quorum present, so I now declare the meeting open.
I would like to introduce you to my fellow directors who are all present today, Reg Weine, who is also our CEO and Managing Director, closest to me, followed by Paul Jensen, then Steve Lin, and I'd also like to introduce our Company Secretary, Jay Stephenson, at the end. Also in attendance is our General Counsel, Peter Cope, as well as members of the Bubs Executive Leadership Team. I would also like to warmly welcome Julie Carey and Pradeep De Silva from our auditors, KPMG, who are in attendance today, along with representatives of the company's share registry, Computershare. And of course, I'm especially pleased to welcome all shareholders of Bubs who are here in person or online today. So thank you for being here.
The notice for this annual general meeting was circulated to shareholders within the required period, and copies of the notice are available from the registration desk if you'd like one. If there are no objections, I'd move that the notice be taken as read. I would like to describe the voting procedures that will apply in this meeting. As recommended by ASX and ASIC, votes on each resolution will be taken by way of a poll. Only Bubs Australia shareholders or their duly authorized representatives or proxies are eligible to vote at this meeting. Shareholders and proxy holders present today would have received on registration a voting card that provides for the holding of a poll on resolutions put to shareholders. You will need to complete this card in order for your vote to be counted.
If you have any questions, please speak to a representative of the company or the share registry before lodging your completed poll card. During consideration of the items of business at the meeting, you'll be given time to complete your poll voting card. The poll voting cards will be collected at the end of the meeting and counted by the share registry. The results of the poll will be notified to the ASX and published on the company's investor website following the meeting. Shareholders were asked to submit questions in advance of the AGM on matters relevant to the business of the AGM to be received no later than 5:00 P.M. last Thursday, the 14th of November. I will endeavor to address any relevant questions for shareholders or ask one of my colleagues to do so. Please note that individual responses will not necessarily be sent to shareholders.
If time permits, I will offer shareholders present the opportunity to ask questions before each of the resolutions are put and time permitting at the end of the meeting. At this meeting, there will be six items of business, including five shareholder resolutions, with resolution five withdrawn. Each resolution will be proposed and voted on as a simple majority to be carried by way of a poll. There have been proxies received in advance of today's resolutions, which I'll disclose when the resolutions are considered. As mentioned in the notice of meeting, it's intended that any undirected proxies given to the chair will be voted in favor of the relevant resolution.
Before we move on to the formal business of today's meeting, I would like to address shareholders in relation to the company's progress in 2024 and our strategic objectives going forward, after which our CEO and Managing Director, Reg Weine, will be pleased to address the meeting. After the meeting, there'll be an opportunity to meet with directors and representatives of Bubs management outside in the foyer, and I invite you to join us for refreshments afterwards. A copy of my address and the CEO's presentation have been lodged with ASX and will be published on the Bubs investor section of the company's website. In my chair's address today, I'd like to provide shareholders with an update on our three-year strategic plan and turnaround, including the short-term and medium-term activities we are implementing to improve revenue and earnings and to fully realize the potential of the company and its assets.
In 2024, we embarked on the first year of our three-year strategic plan and turnaround, focused on a five-point plan to responsibly manage capital and to grow and maximize shareholder value. The first year in our turnaround strategy was a pivotal one and an important step in the right direction. We achieved very strong growth in our two key strategic export markets, with US revenue up 46% and China revenue up 27% on financial year 2023. We also grew strongly in our home markets and the rest of the world markets, including Japan and Vietnam. And pleasingly, we achieved revenue of AUD 80 million during the year in accordance with revenue guidance. Over the past year, we have focused on delivering against each one of our strategic pillars that we announced in August 2023.
Pleasingly, we have made solid progress against each strategic pillar, and we are on track to achieve our medium-term financial and non-financial objectives. Financial year 2024 was a significant year for the company as we continued to build on our momentum in the US, reset our China business, upgrade and refresh our Bubs master brand, introduced new packaging and sizes, reformulated products, and implemented a new ERP system, SAP, and moved to a second shift at our state-of-the-art Deloraine canning facility here in Victoria. This significant program of operational activities implemented over the past year required careful planning and seamless execution to ensure Bubs' high-quality, clean label nutrition products remained competitive, available, and accessible to our customers and consumers in our local and global markets. I'm now going to address the strategic pillars, including the USA Growth Engine.
The USA delivered record growth in 2024 with revenue of $35 million, up 46% on the prior corresponding period. Bubs' revenue growth in the US market has been fueled by strong consumer demand, endorsement from healthcare professionals, social media advocacy, and robust trial and repeat purchases. Now available in more than 5,800 bricks and mortar retailers, major e-commerce platforms such as Amazon and Walmart.com, and with a first mover advantage in the goat sector, Bubs is well placed to capture the expected growth in premium specialty infant formulas in years to come. On the FDA post-balance date, Bubs enrolled our 400th infant in the growth monitoring study, and today we are sitting at 452 infants enrolled with a revised target of 475 infants required to complete the FDA study.
This clinical trial is being conducted as part of the regulatory requirement and guidelines set by the U.S. Food and Drug Administration for permanent access to the United States infant formula market. Bubs now intends to formally submit the GMS and clinical trial documentation in mid-2025, with the FDA's regulatory approval expected in October 2025. The costs of the FDA trial have not been inconsiderable, but are an important investment in our future and ongoing access to the American market. As you'll have seen from the video, Bubs first became importing our infant formulas in the United States in May 2022 as a response to the infant formula shortage that year. Bubs was the first company to offer assistance from abroad participating in the U.S. government's Operation Fly Formula program, and Bubs was the second company in the world to be granted temporary enforcement discretion.
Since then, the Bubs team has steadily been building our premium infant-branded formula portfolio of evidence-based clean label nutrition for American families, caregivers, pediatricians, and has now cemented our position as the leading goat milk formula in the United States, which is the second largest baby market in the world. In terms of China, Bubs' China reset strategy has also been progressing well, with Bubs achieving 27% revenue growth over 2023. In addition to the demand for Bubs' core infant product portfolio, there was also strong demand for Bubs' adult goat formula in China, which is something we heard from investors at the AGM last year, with sales of adult goat products up 79% over 2023. Importantly, the Bubs' premium brand positioning and brand architecture has now been restored, with the average selling price, or RRP, increasing 15% year on year.
Bubs brands continue to perform strongly in the CBEC channel, and Bubs' online-to-offline O2O sales strategy is gaining traction, with Bubs now stocked in 705 O2O stores across China. The Bubs Board of Directors visited China this year, meeting with our employees, suppliers, online platforms such as Alibaba's Tmall, social media operators and retailers, including Momtime, which is China's leading O2O mother and baby stores based in Chongqing. We visited Hema Fresh, Sam's Club in Shanghai, and Hangzhou, and in our observation, the China consumer market has modernized terrifically post-COVID, and the birth rates this year and the year of the Wood Dragon, significant prosperity and abundance, have remained steady.
With the Bubs Supreme inventory overhang from the previous distributor having now been cleared in the China marketplace, combined with new product development and further penetration of the O2O channel, Bubs is anticipating significant revenue growth in China in financial year 2025. In terms of Australia and the rest of the world, last year, Bubs achieved AUD 21.6 million worth of revenue domestically, representing 24% growth on PCP. Bubs is the largest player in the Australian goat infant formula market, with a 55% market share. We are the fastest growing MAT supplier in Australian major retailers, growing at a rate of 13.5%, or five times faster than the market growth of 2.4%, and demand for our Bubs branded goat IMF remains pleasingly very strong. In financial year 2024, Bubs achieved AUD 5.9 million and 12% revenue growth in other international markets compared to 2023.
Growth in Bubs' rest of world operating segment has been driven by Japan and Vietnam, and the rest of the world has grown at a CAGR of 20% from financial year 2020 to 2024, highlighting both the opportunity and strong momentum in these key markets. In terms of portfolio optimization, we recently launched new product variants, including new look labels, which were featured on the video, and new pack formats with US key retailers at the end of financial year 2024. Although the transition to the new products has never been straightforward, the consumer acceptance rate has been strong, and the new smaller tins, now in US standard size, are expected to perform strongly at the end of this year and into financial year 2025.
It was an absolute thrill for one of Bubs' new variants, Essential, to win one of the most prestigious American consumer awards, the Good Housekeeping Parenting Award, and Essential is expected to continue to contribute strongly to Bubs' continued USA revenue growth in 2025. A recent New York Times Wirecutter, the best baby formula review, also heroed two of our Bubs infant formula products. In terms of sweating existing assets, our state-of-the-art manufacturing facility in Victoria is now operating at approximately 84% of capacity on a two-shift basis. Bubs Deloraine canning facility has been operating on a double shift, five days per week since January of this year, and in June, we successfully passed the U.S. FDA annual site audit.
Deloraine was designed and built for SAMR registration, and while Bubs is not currently pursuing such registration, obtaining access to additional Clean Label SAMR registrations may provide an additional future pathway for sustained growth. In terms of working capital, in December 2023, Bubs raised funds in a placement and share purchase plan, which was supported by investors, and thank you for your support of that. The proceeds of around AUD 14 million after costs were used to invest in working capital, including that second production shift at Deloraine, expanding capability, building our inventory levels to mitigate stock shortages in the US, and important funding for regulatory costs in the USA to get that FDA approval. During the year, management continued to focus on cost reduction and greater efficiency in working capital, delivering a reduction in net operating cash flow for 2024.
Your board, who are all shareholders of this company, like you, acknowledged that there remains more to do on this front. We continue to reduce costs while investing responsibly in ingredients and the supply chain needed to supply the inventory growth for growth markets in the US, China, and rest of the world. During the year, Bubs settled all outstanding litigation other than the dispute with Alice and Willis. Bubs has commenced arbitration proceedings against Alice and Willis for the recovery of an alleged AUD 5.6 million debt, damages, and costs. In terms of the outlook, Bubs is currently forecasting group revenue growth of 28% in financial year 2025, targeting revenue of AUD 102 million, including significant revenue growth in both USA and China. We are targeting a gross margin in excess of 40% in 2025 with positive EBITDA.
While the impact of the non-recurring costs impacted our statutory loss for 2024, their absence in 2025, when coupled with the strong momentum in all markets and a steadfast focus on cost-out initiatives, provides a clear pathway to positive trading EBITDA before share-based payments in 2025. The board is committed to oversee profitable growth and hopefully a restoration in our share price. We are really excited about the future of our company given the significant progress we've made in the first year of our three-year strategic plan. Our award-winning clean label certified infant nutrition continues to grow in popularity in all our key global markets, and with a first-class management team, this gives us confidence in Bubs' future and the delivery of our strategic plan and turnaround.
I am privileged to be your chair, and let me assure you, the board and management remain very focused on achieving break-even in 2025 and delivering medium to long-term sustainable value creation for all Bubs shareholders. On behalf of the board, I wanted to thank our people, our customers, our suppliers, and most importantly, our shareholders for your continued support of Bubs. I'm now going to hand over to Reg to provide his CEO address.
Thank you, Katrina, and good morning, everyone. It's wonderful to see some familiar faces in the room today and some of our shareholders who are joining the AGM online. My name is Reg Weine, and I am the Managing Director of Bubs.
I've been in the role as CEO and Managing Director for 14 months, leading the turnaround, and I'm supported by an incredibly passionate, committed, and capable team of executives and managers, many in the room today. Before we move on to the business of the meeting, I would like the opportunity to share a presentation. It's a quick recap of the FY24 results. I'll then touch on the Bubs performance by region, and then I'll bring it all together with the FY25 outlook and our path to profitability. Noting the disclaimer on the screen, I'll now move to the FY24 results and highlights. Before we dive into the FY24 results, I would like to remind shareholders of our Bubs strategy and what our focus has been on during the first year of our three-year turnaround.
Our five-point plan to responsibly manage capital and maximize shareholder value was based around five key pillars, to continue and maximize the opportunity in the USA and our growth engine under the FDA's temporary enforcement discretion while pursuing permanent access. Resetting our China business for long-term sustainable growth. Optimizing and enhancing our portfolio. Sweating our assets and increasing the utilization of our state-of-the-art canning facility here in Victoria. And finally, to improve our working capital efficiency and to avoid any material obsolescence or write-offs that have plagued the company for many years. Turning to our FY24 highlights, I'm pleased to say that we have successfully executed our strategy in the past year. Firstly, as Katrina said, we achieved net revenue of AUD 80 million in line with guidance, which was 33% up on the prior year.
We exceeded our gross margin target of greater than 40% in line with guidance, and we believe we can build on this gross margin improvement in the coming years. Our U.S. growth engine is delivering, which will provide a sustainable and profitable runway for growth for many years to come. We continue to make meaningful progress on the U.S. FDA clinical trial, and we remain on track for permanent FDA approval in October of 2025, not too far away. We've now got 95% of the revised target patients now enrolled in the growth monitoring study. Our China reset is gaining traction with year-on-year revenue growth of 27%, and we exited the year strongly, with half two growing 38% over half one.
Our normalised cash burn of AUD 1.2 million per month was in line with guidance, and despite the lumpiness of our cash flows, we are very confident in our cash flow forecast for this year, FY25. Bubs new high margin tins, new variants, and packaging have been successfully launched in the US, and more on that later. And we have been running a second shift or double shift five days per week since the beginning of this calendar year, with our asset utilization now up to 84%. Looking at the financial highlights in snapshot, we've touched on revenue being 33% up on prior year.
Our EBITDA loss reduced from AUD 105 million to AUD 20 million. Our gross margin, as I said, was up 11 points on FY23 to a healthy 41%. US revenue up 46%, China up 27%, Australia revenue up 24%, and rest of world markets revenue up 12%. We're actually growing in every market that we're in around the world, which is a great place to be. As I've already mentioned, our canning facility is running at 84% utilization and our monthly cash burn reduced from AUD 4.3 million per month to AUD 2.3 million per month, but as Katrina said, a lot more work to do on that. Turning to the P&L, a quick recap. Our revenue gross margin were both significantly up on prior year. However, Bubs distribution costs were higher than FY23 due to air freight costs, which we don't expect to incur in this year, FY25.
Operating expenses, a percentage of revenue, dropped from 92% to 74% and will reduce further in this year, FY25. As we mentioned in the full year results presentation, we had approximately AUD 11 million of one-off non-recurring costs last year, which included FDA costs, ERP implementation costs, and legal costs.
Moving to the balance sheet, you'll notice a slight increase in receivables on the back of our strong sales growth, but I will point out that our collection days are improving all the time. You'll also notice that our inventory balance increased by AUD 7 million, reflecting our investment in working capital to fund that 33% growth in revenue and to build safety stock in the USA to avoid having to air freight product in this year, FY25. We had AUD 5 million in borrowings at balance date June 30, which is our trade finance facility, and that facility is currently drawn to AUD 5 million after we repaid AUD 2 million this month in November. Other than that, the balance sheet is clean and has been de-risked from prior years.
Looking at cash flow this time last year, Bubs raised AUD 17.4 million, as Katrina said, via a placement and share purchase plan to fund future strategic growth. The proceeds have been used to invest in working capital, including the commencement of that second production shift at Deloraine, expanded capacity, inventory build to mitigate stock shortages, and funding for regulatory costs in the USA to obtain that FDA approval. Our monthly average cash burn for FY24, as I said, was AUD 2.3 million. It does include AUD 12.4 million of non-recurring one-off costs such as FDA, consulting fees, litigation, capital raising costs, ERP implementation costs. When we exclude these one-off non-recurring costs, that normalized cash burn, as I said, was AUD 1.2 million per month. Working capital does remain our biggest challenge, but it's also our biggest opportunity, and while we've made progress, there is a lot more to do.
We remain very focused on optimizing our supply chain, minimizing stock obsolescence and write-offs. There've been none of those this year, I'm pleased to say, and ensuring we have the right level of raw material and finished goods inventory to meet customer demand in each of our markets. I'll now move to Bubs performance by region, starting with our growth engine and largest market, the USA, which, as Katrina said, is the second largest infant formula market in the world. The USA is one of our key target markets and growth engine, and we've grown revenue 108% CAGR over the past three years. Our strong momentum continued in FY24, with US net revenue seeing an impressive 46% growth, reaching $35 million. We achieved a record Q4 scan revenue of $11.2 million, with over 280,000 tins sold in that last quarter of last financial year.
In June of 2024, we also set new records with over $1 million in weekly scan sales and more than 27,000 tins sold in a single week. This significant sales growth has been fueled by strong consumer demand, endorsements from healthcare professionals, social media advocacy, and robust trial and repeat purchases. As I mentioned this time last year at this AGM, we were about to embark on a very significant upgrade to our portfolio. This decision was partly driven by the FDA, who required Bubs to meet the mandatory label requirements in the US as part of our temporary enforcement discretion and market access. It was also informed by our consumer research, customer feedback, and shopper insights. So in the US, we replaced Bubs Supreme because the brand wasn't performing as strongly as the rest of the portfolio in the US market, and we replaced it with Bubs Essential.
Our goat stage one, zero to six months, and stage two, six to twelve months, were merged into one goat SKU, zero to twelve months, because U.S. customers are not familiar with stage one and stage two as a concept, and it was causing customer confusion and a potential barrier to purchase. And we were forced to change our Bubs Organic to Bubs 365-Day Grass-Fed because the U.S. Department of Agriculture does not recognize the Australian organic certification, which was a shame. We then wrapped them all up in a modern, contemporary new look label, which has much greater shelf appeal and is much easier to navigate in store. And finally, we reduced the tin size to 20 ounce, which is 567 grams, which is the market standard in the U.S., and a lower price point for consumers, which we know will help with product trial.
Our U.S.-based marketing team are doing a wonderful job helping moms and caregivers understand the changes to the Bubs products that they have grown to love. At the same time, we're appealing to a whole new audience who have not trialed the Bubs infant formula range before. We feel the launch of Bubs Essential could be a game changer, as this product is our first infant formula offered at a lower price point at approximately $26 a tin. And this product will appeal to a value-conscious consumer who still wants a clean label, whole milk formulation with all of the essential ingredients, pardon the pun, and a formulation free from nasties to help little babies grow. We think the Essential product is ideally suited to U.S. retailers like Walmart and their shopper demographic.
And as Katrina said, we're thrilled to have already won the Good Housekeeping Award for Essential, and it's further evidence of the power of our clean label certification and better-for-you baby formulations. In Target USA, our focus is on goat. Target USA is an upscale retailer and a real destination for the mother and baby category. We have been making steady progress with Target over the past two years, with our velocity steadily improving, and we are now looking to increase our store penetration with Target at each range review. For us, the US is not just all about Amazon and brick-and-mortar retailers. We also have to build our brand, increase brand awareness, and encourage consumer trial of the Bubs portfolio of products.
During October, Bubs exhibited at the American Academy of Pediatrics Conference in Florida, the largest pediatric conference in the U.S., which this year was wedged between two hurricanes. The reason we exhibit there is because healthcare professionals remain an important cohort. They really influence U.S. mums looking to bottle feed or supplementary feed their infants and toddlers. Many pediatricians mention the strong interest in our Hero Goat product and that our Clean Label Nutrition and Purity Award was a strong differentiator, and our enhanced formulations are welcome by American mums and families. We now have more than 1,500 pediatrician clinics in the U.S. recommending and giving out samples of Bubs infant formula to their patients. So how has the product and pack and tin size launch or transition in the U.S. gone?
As you can see from this amazing slide of Bubs total scan sales, and scan sales are sales through the register or checkouts at major retailers or in an online environment, their cart sales. So they represent true demand. And as you can see, they have been growing steadily and consistently since Bubs first entered the U.S. in June of 2022. If you look at the far right-hand side of the graph in the shaded area, that is the period in which we launched and started the transition to our new products, at the same time selling out of the old products. You can see that the scan results dipped initially before rebounding strongly in the past month and returning to the medium-term growth rates.
The reason for the initial dip in the transition to the new tins in both Amazon and brick-and-mortar, as Katrina said, it hasn't been straightforward. One of the issues was the customer reviews on Amazon didn't migrate to the new products, even though the formula was the same. At the same time, there have been some fulfilment and replenishment issues at the retailers' warehouses, and there've been some minor administrative issues that the team are looking to resolve with our retail partners. If you look at the bottom table below the graph, the good news is that week ending 3rd of November, two weeks ago, 72% of all sales in the U.S. scan sales were the Bubs new products and new tins, and we're almost through the transition.
Moving on to our US regulatory updates, Bubs remains on track for permanent FDA approval and access to the second largest infant formula market in the world. Our clinical trial involves a nationwide growth and tolerance and safety study of healthy-term infants consuming Bubs infant formulas, monitored by healthcare professionals. The study evaluates all three stage one formulas in the market, including goat and our two cow milk products, as well as a commercially available formula as the control sample. Having met the initial target of 400 infants enrolled in our trial, we have now extended the patient recruitment target to 475 infants. And as Katrina said, we've already got 452 enrolled as of this week. Those additional 75 patients are required to ensure we have a statistical margin of safety before we close off the trial.
When we do close off the trial, we deactivate clinics, then we review the data prior to our FDA submission. Our last infant will be enrolled in our trial in December next month, and we continue to make meaningful progress and meet the regulatory milestones, and we remain very much on track for permanent access to the US market in October of 2025. Now turning to China, after a difficult reset in FY23, our Bubs China business demonstrated strong performance across key financial metrics in FY24, delivering sales growth of 27% year on year. Led by our Country Manager, Jackie Lin, the China team were also able to restore our premium price architecture and a healthy value chain in the market with our core goat offering.
In the second half, sales grew 38% over first half, driven by the business reset and restoration and confidence from both customers and distributors in our network. China delivered an impressive gross merchandise value, or GMV, growth of over 90% from CBEC channel in the second half compared to the first half of 2024. Bubs China portfolio and profitability improved dramatically through the optimization of the portfolio, our focused marketing strategy, along with rigorous sales management to ensure sustainable sales and profit performance. With the confidence restored in the Bubs brand and demand increasing, our China team remain laser-focused on two key go-to-market channels: cross-border e-commerce, CBEC, and online to offline mother and baby stores. We continue to enjoy exceptional growth in CBEC, and we have more recently begun to push into O2O.
As Katrina mentioned, the board visited China earlier this year, which included a signing ceremony with one of China's largest and progressive mother and baby retailers, Momtime. In July 2024, Bubs refocused its efforts on China's O2O channel. Store numbers have grown from 500 in September to 705 O2O stores at the end of October. In the last month, goat IMF monthly sales increased by 148% over prior corresponding period, while our Supreme IMF monthly sales increased by 89% over prior corresponding period. And in the coming years, we expect that O2O store numbers will expand to 5,000 stores, increasing our coverage from 61 cities in 20 provinces to 99 cities in 33 provinces. And the number of provinces in China with more than 100 mother and baby stores selling the Bubs product is expected to grow from 1 to 11 by 2029.
Our China marketing team, who are based in Shanghai, have been doing a wonderful job stretching our marketing dollars, driving a strong return on our investment, and we remain focused on the major mother and baby expos as well as running educational workshops and seminars for mother and baby store owners. We continue to use social media engagement and content to build awareness and drive conversion on various Chinese digital platforms, where we have seen measurable success. Always a good barometer of brand strength is Bubs performance in last week's Double 11 or Singles Day promotion, which remains China's biggest sales event of the year. Bubs total sales were up 41% year on year, with goat up 34% and our Caprilac sales up 69%. Caprilac was again the number one adult goat milk product sold on Temu Global, and our average goat selling price was 24% higher.
Our selling price was 24% higher than last year, demonstrating the restored pricing architecture in the market. And I think the China team are doing a fabulous job to rapidly grow our branded sales whilst maintaining our premium brand positioning. So Bubs is forecast to grow strongly and profitably in China within its premium niche. We have a strong brand portfolio to build on Goat Supreme and Caprilac. We have a very healthy gross profit margin, a trusted and specialist network. We have upgraded our formulation specifically for the China market. We remain disciplined on our marketing and trade investment, and our O2O strategy, as I said, is really starting to take off and gain traction with 705 stores stocking our products with a very healthy velocity within each store. Moving from China to our home market, Australia.
You've already heard today that we're growing strongly in our two strategic markets, the U.S. and China, but we're really pleased to say that domestically we're also doing incredibly well with 22% revenue CAGR growth over the past three years. Bubs remains the clear market leader in the domestic goat infant formula market, holding a record 55% share of the category. We are one of the fastest growing brands in the Australian major retailer landscape, growing at 13.5%, or five times faster than the market growth of 2.4%. And demand for Bubs goat milk remains strong, growing at 23% on an MAT basis. For context, Bubs is a bigger brand than Bellamy's in the Australian market, and you'll remember that Bellamy's was acquired by Mengniu Dairy for AUD 1.5 billion back in 2019.
Our state-of-the-art facility here in Melbourne has been running at 84% utilization on a two-shift, five-day-per-week basis since the start of this year, and the factory is running really, really smoothly. Our second shift has increased daily production from about 11,000 tins to 22,000 tins per day, and at the same time, it has improved plant efficiencies, overhead absorption, and our COGS. We will close the factory for a few weeks over the Christmas period for our annual planned shutdown and routine maintenance, and we did have a few weeks of downtime during the past few months due to supply interruptions from one of our key suppliers, and pleasingly, as Katrina mentioned, we successfully passed our second FDA audit in July of this year. The key message is that we've got a wonderful canning or manufacturing asset, and it's really starting to hum.
Okay, so we've covered the US, China, and Australia. I'll now turn to the rest of world markets. We're very excited about our growth prospects and opportunities in rest of world markets, where we see an abundance of opportunity for the Bubs brands and portfolio. We have been growing revenue 20% CAGR for the past three years, albeit off a low base. Japan has been the real quiet achiever for Bubs revenue growing at CAGR 78% over five years. Japan contributed 51% of our total rest of world revenue in FY24, with revenue of AUD 3.1 million, with Vietnam contributing 25% of rest of world revenue, with AUD 1.5 million in sales. We have a healthy gross margin in Japan, which is greater than 40%. And our rest of world markets are all profitable before corporate overhead allocations. I mentioned Vietnam.
It's the fifth largest infant formula market in the world, with a growing birth rate and a really strong economy. Bubs is experiencing good growth in Vietnam, and in FY24, our revenue grew more than 100% over the prior year. Bubs has, up until this point, really only sold in one mother and baby food chain, Con Cung, who are a very premium and sophisticated retailer, predominantly in the south of Vietnam, with 800 stores, and we've been supplying Con Cung directly. In FY24, we employed our first Vietnamese employee, Loan Tran, who is our new country manager, and we are now looking to expand our distribution footprint in Vietnam and will push further into the modern trade and will expand into North Vietnam. We expect our business in Vietnam to grow very strongly in the next few years.
Bubs is fortunate to have a number of new market opportunities around the world, including Canada, where Bubs has now obtained authorization to sell Bubs goat and Bubs Essential infant formulas under Health Canada's interim policy for infant formula. On August 16 this year, Bubs was added to the enforcement discretion official list published by Health Canada. The interim policy process remains in place up until December 31st of 2025, with permanent access regulatory process running in parallel, and one where we, Bubs, can utilize the U.S.-based clinical trial in its application and submission to the Canadian permanent pathway process, so we don't need to do a second trial. We use the existing trial in the U.S.
We are currently planning for a soft market entry sometime in 2025, which will leverage the learnings from the U.S. and our market success and take advantage of the demand for goat infant formula in that market. That completes the regional updates, and I'll now move to the FY25 outlook and the path to profitability. I'm pleased to say that we delivered on what we said and we would do in FY24 and in the first year of our turnaround as we track towards a positive EBITDA result this year in FY25 before share-based payments. Our revenue of AUD 102 million forecast will be up 28% year on year. Our gross margin will be in excess of 40%. We are now expecting, as I said, our clinical study patient enrolment to be completed next month with FDA approval anticipated in October of 2025.
A new market launch in Canada in FY25 and will be cash flow positive despite the lumpiness of our cash flows in Q4 of this year. EBITDA will be positive before share-based payments, and we remain on track for our guidance, and we're highly confident in our business model. One of the reasons we are confident in the business model is that we are growing, as I said, in all regions and all markets around the world, and we see that growth accelerating this year. We are expecting very significant growth in our two key markets, the USA and China, but also in rest of the world markets. And we expect continued strong growth in our domestic market, where we'll continue to grow ahead of the market.
Last year, we significantly improved our gross profit margin, and we exceeded our gross margin target of greater than 40% in line with guidance. We are on track this year to be better than 40%, but we do believe we can build this out in the coming years, and we are targeting a gross margin percentage of 45% by FY29. As Katrina said, it's fair to say Bubs operating expenses have historically been too high based on the revenue the business generated. For the past year, we have vigorously pursued cost-out opportunities and efficiencies to improve our profitability and to preserve cash. We have seen some good improvement year on year, and we expect FY25 operating expenses as a percentage of revenue to be in the mid-50% range, down from 74% in FY24, and as Katrina said, with more work to do.
To illustrate how we transitioned from a circa AUD 20 million loss in FY24 to a break-even this year, this bridge sort of highlights the key drivers of the expected improvement in profit delivery from one year to the next. As you can see, there's an additional AUD 22 million of revenue forecast this year, which will provide AUD 9 million of gross profit at a 40% gross margin. I've already mentioned the cost discipline. The team have a very good handle and fix on our operating expenses and known costs. Of course, we had a lot of one-offs last year, including the AUD 7 million of FDA regulatory costs, litigation costs, etc., which are all non-recurring. The way we are modeling our internal forecast EBITDA in FY25 is that we do assume some continued gross margin improvement, further cost-out initiatives, continued revenue growth.
When considered in combination with the above and the one-off non-recurring costs, we feel it provides a very clear pathway to positive EBITDA before share-based payments this year. That completes my presentation. Thank you. I'll now hand back to our Chair, Katrina, for the business of the meeting.
Thank you very much, Reg, for that stellar presentation and for your enthusiastic and exceptional leadership of the business. I now turn to the formal part of the meeting, and we will be considering the various resolutions. The first item of business for the meeting, which is the consideration of the audited financial statements and related reports for the year ended 30 June 2024. The Corporations Act requires that the audited financial statements and related reports for the 2024 financial year be considered at the meeting.
I confirm these reports were made available to shareholders on the 28th of August 2024. As I mentioned previously, the company's auditors are KPMG, and Julie Carey, the partner responsible for the '24 audit, is at the meeting today in front-row seats and is willing and able to answer any questions on the conduct of the audit or the content of the auditor's report. I understand from the auditors that no questions were received prior to the meeting, but I now invite any questions or comments in the room on the company's financial and related reports for the year ended 30 June 2024. If there are no hands up and no questions for Julie or us, I would ask the company secretary, Jay, to record that the audited financial '24 and related reports have been received and considered by shareholders. Thank you.
The next item of business, Resolution One, is a non-binding resolution to adopt the company's remuneration report, which is set out in the company's 2024 annual report. The vote on this resolution is advisory only. However, the board will take into account any discussion on this resolution and the outcome of the vote when considering the future remuneration policies and practices of the company. The resolution appears on screen, and I will take it as read. Details of the valid proxy votes on the resolution also appear on the screen.
I now ask, are there any questions on this resolution? If not, I now put the resolution to the meeting and ask that you complete your polling vote card for Resolution One by making a mark in the relevant box. We'll now move to Resolution Two, and I'm going to ask my fellow director, Mr. Paul Jensen, to put this resolution to the meeting because it involves me.
Thank you, Katrina, and good morning, ladies and gentlemen, and fellow shareholders. The next item of business, Resolution Two, relates to the re-election of Ms. Katrina Rathie, who retires as a director by rotation and in accordance with the constitution of the company and being eligible is re-elected as a non-executive director of the company. The resolution appears on the screen, and I will take it as being read. Ms. Rathie has also been an independent non-executive director of Bubs since July 2021 and became chair in April 2023. Her profile and background are contained in the notice of meeting on page seven. Details of the valid proxy votes on the resolution also appear on the screen. I now put the resolution to the meeting and ask that you complete your poll voting cards for Resolution Two. I now ask, are there any questions on this resolution? Thank you.
I will now hand the chair back to the chair, Katrina, who will move on to Resolution Three.
Oh, he's much taller than me. I'll bring this right back down to my level. Thank you very much. Thank you for your support for my re-election. I really do appreciate that. I now move to Resolution Three, which relates to Bubs Australia Rights Plan. In accordance with ASX Listing Rule 7.2, Exception 13, the company is seeking to preserve the 15% limit on the issue of new equity securities that may be made by the company during any 12-month period without shareholder approval, excluding employee rights issued under the plan. The resolution appears on the screen, and I will take it as being read. Details of the valid proxy votes on the resolution also appear on the screen. Is there any questions on this resolution from shareholders?
If not, I now put the resolution to the meeting and ask that you complete your poll voting card for Resolution Three, and I move on to Resolution Four. The next item of business, Resolution Four, relates to the grant of performance rights shares to Mr. Reg Weine, that for the purpose of ASX Listing Rule 10.14 and for all other purposes, approval is given for the issue of performance rights to the company's Chief Executive Officer and Managing Director, Mr. Reg Weine, as his long-term incentive on the terms and conditions set out in the explanatory statement. The resolution appears on screen, and I will take it as being read. Details of the valid proxy votes on the resolution also appear on the screen. Is there any questions on this resolution?
I now put the resolution to the meeting and ask that you complete your poll voting card for Resolution Four. Thank you. Resolution Five has been withdrawn, and so I will now move to Resolution Six. The next item of business, Resolution Six, relates to the approval of an additional 10% placement capacity in accordance with ASX Listing Rule 7.1 and 7.1A, as set out in the explanatory statement. The resolution appears on the screen, and I will take it as being read. Details of the valid proxy votes on the resolution also appear on the screen. Do shareholders have any questions on this resolution? You're a quiet lot today, and that's very good. So I will now put the resolution to the meeting and ask that you complete your poll voting card for Resolution Six. Thank you.
Now, before we move to the poll procedure, I will address any pre-registered questions. Company Secretary, are there any pre-registered questions from our shareholders?
Yes, there is. We had four questions. I'll read them out. The first question is.
Can you read them out one by one and slowly so I can hear them, please?
Yes.
Thank you.
First question, why is Bubs' gross profit margin significantly lower than its peers? Does the company expect its gross profit margin to rise to over 40%? If so, when?
Bubs' gross profit margins are actually higher than its domestic peers that specialize in goat infant formula, and they have been increasing steadily in recent years and are expected to improve further in coming years. As you will have heard from our CEO's forecast, we are forecasting greater than 40% profit margins in financial year 2025.
Thank you. Question two, Bubs has been burning cash quickly. When will it be able to support its cash burn on itself without further issuing shares?
It's a good question, and the company expects the rate of cash burn to slow in Q3 and Q4, which is in the first two months of financial year, calendar year 2025, and as you will have heard from our CEO, we are targeting being cash flow positive during the course of financial year 2025.
Okay. Question three, does the company have other ways to raise funds? Given the company's share price is already very low, is it wise to raise more shares at the moment?
As you would expect, the board and our senior management team are continually monitoring the company's capital requirements, including a thorough assessment of current cash balances, likely future cash inflows and outflows, and potential sources of additional funds, including debt, equity, and other options. For a growth company like Bubs, it's not possible to rule out the possibility that additional funds may be required to fund growth in the future. But if this is the case, the board will place a high priority on trying to source those funds in a responsible way that minimizes any dilution to shareholders, and we will try our hardest to preserve the value of existing shareholders' shares. We have an existing loan facility with NAB, and we are also exploring other trade financing options.
Okay. Number four, Bubs' employee and administration expenses are high compared to its peers, yet is still seeking to increase directors' benefits. Are there sufficient reasons for these decisions, or is the company just funding its directors' luxury lifestyle with money from investors?
We are always endeavoring to reduce costs. Director benefits are currently capped at AUD 500,000 as a pool under our constitution, and Steve Lin has waived all director fees for his time on the board over the last several years. We have listened to shareholders' views, such as the one expressed, and we decided to withdraw Resolution Five, which was intended to increase the director fee pool by AUD 150,000. That was not to pay the existing directors more, but the intention of that was that ASX Corporate Governance Guidelines recommend that a company has a minimum of three independent non-executive directors as a matter of best practice, whereas Bubs currently has myself and Paul Jensen as our independents.
The main reason for that was to ensure that we had sufficient headroom in our cap to attract and remunerate an additional independent non-executive director who had appropriate skills and expertise to assist the company potentially in the United States. But we are not putting that motion forward today. And other than inflation or CPI adjustments, it's not intended that the fees of existing non-executive directors will be increased in the near future.
Okay. That's all the questions that I have.
Thank you. We now have put all the resolutions at the meeting to shareholders, so we will move on to the poll procedure. I will now appoint and request a representative of the company's share registry, Computershare, who has examined and prepared summaries of the proxy forms received to act as a returning officer and conduct the poll. So if any shareholders in the room have completed their polling card, could you please place your card in the poll box, which will be brought around by staff, including it's the purple one that the gentleman has in the back of the room. If anyone has any questions about how to complete the card, please speak to our lovely gentleman before you put the card in the box. I think I've got a card in the box too. [crosstalk] Thank you very much.
Has everyone who intended to vote now voted and given their card to the Computershare representative? If so, thank you. And it appears though the voting process has been completed, and so I declare the poll closed. The results of the poll will be notified to the ASX and published on the company's investor website following the meeting. I'm just going to now call for any shareholder questions in the room. Should anyone wish to ask a question now? Yes, sir.
I'm a new shareholder.
Oh, thank you. He has a microphone.
Michael Barrett's my name, and I'm a new shareholder. And I was introduced to the company about 10 days ago at a conference that Reg spoke at, and I got quite enthusiastic about it all. The thing that struck me is looking for weaknesses in the company because I think you're on a great thing. And I noticed that you're getting very close to capacity in the plant, and you've got some very ambitious sort of strategies ahead of you. You know, we're in, particularly, say, Canada and those other markets, you're right down on market share. What are you going to do about capacity expansion? And when I talk about capacity, it's actually the number of goats out there, not only in your own physical plant, but your raw material, raw milk supplies. So that's one thing.
The other thing too is, and I did raise it at the conference about the product configuration. You're selling powdered at the moment, and you've made some adjustments there, but there are other milk product configurations. One is reconstituted powder in overseas markets, and the other one is selling UHT milk, and I see this as an opportunity for UHT milk long term, but it is very capital intensive, but it has a longer shelf life and is excellent in a lot of undeveloped markets, and that's sort of the two issues that I can see, and I don't want to bore you with any others because it could be here all morning.
Thank you, Michael, for that question, and thank you for your investment in Bubs. It's always great to have new enthusiastic shareholders who've been around for 10 days, and great to hear that Reg impressed you at the conference. I'm going to throw to Reg to answer that, but if you want to ask more questions, you can join us for morning tea, and Richard and Julia, who look after our marketing and capacity issues, can also chat to you about the company's plans in that regard too. But over to Reg.
Yeah, thank you, Katrina, and Michael, thank you for the questions. They're great questions. I think in regard to capacity, we added a second shift January of this year, and that's running really well. Our permit allows us to run pretty much a 24-hour shift, seven days a week. We'd never run it seven days a week. You now obviously need to allow time for cleaning and the like. So we've got about a third of capacity up our sleeve. But if we continue to grow at 30% year on year, which we think we will, sort of by about FY27, we need to be thinking about a second line at Deloraine or another facility because we'll sort of butt up against that pressure. As it relates to the milking herd, goats, we have three sources of goat milk.
We have obviously New Zealand goat powder, we have the Netherlands, and we have our domestic fresh goat milk. The herd size is increasing. There's lots of capacity from our two major suppliers. They've got line of sight of our growth and our plans. They're working very closely with us. Richard, our CEO, meets with them regularly. They come to our office. They're very impressive, and so we don't see any supply chain concerns going forward, and we've got that diversity of supply should there be a hiccup. Your question about UHT and what we call ready to feed or ready to drink, within IMF, depending on the market and which part of the world, ready to drink or ready to feed, which is basically bottled infant formula or ready to go, somewhere between about 5% and maybe 10% of the category.
Markets like Vietnam, it's growing quite strongly, so it is a part of the category that we think the brand should play in. So Julia's here. She's our head of global marketing and innovation. I'm sure she'll chat to you, Michael, outside, but it's a really good opportunity. UHT, perhaps less so, only because there's a lot of capacity around the world in UHT. It's very competitive. The profit pool's not as attractive, but if we could see a way into that market without the big capital investment that you mentioned, where we could get an attractive margin, the product's obviously shelf stable, which helps, particularly in Southeast Asia, we'd definitely look at it.
Does anyone else have a question in the room? If not, that concludes the business of the meeting. I'd just like to thank Jay Stephenson, our Company Secretary of some eight years standing, who has just completed his eighth meeting and will shortly step down from his role. So thank you very, very much, Jay, for your contribution to Bubs over the last eight years since our listing. And I now declare the meeting closed. I would like to thank shareholders in person and online for your attendance and for your ongoing support of the company. My fellow directors and the Bubs leadership team and I are happy to talk to you further and answer any questions that you may have over refreshments outside the area. So thank you, everyone, and good afternoon.