Good morning, everyone, and thank you for joining today's FY 2023 full year results webinar. My name is Reg Weine, and I am Bubs' new CEO and Managing Director, having first joined the business in April 2023 as an independent non-executive director. Over the past five months, I've been working closely with the Bubs executive team, our board, and external advisors, and I recently led the board's strategic review of the business. Today, I will be taking you through the FY 2023 results presentation, following our earlier release of the preliminary 4Q financial results. Today's presentation will cover the investment highlights and why I want you to continue to support Bubs. A brief introduction to me, the overarching strategy, and our addressable market. I will then take you through the financial highlights and lowlights, the strategic imperatives and how we will win, and finally, our outlook for FY 2024.
Now, the investment highlights. Bubs is the number one goat formula brand in Australia, with 48% market share, and also in the USA, where we have a 94% share of the US market. USA market expansion is the medium-term strategic priority for the business and where we are placing our big bets. Pleasingly, our US FDA permanent regulatory pathway remains on track, and once approved, it will provide a significant competitive moat. Our China's reset strategy to leverage new trade partners across multiple channels is well progressed, along with a continued focus on tighter inventory management and better demand forecasting. We have a new leadership team, which I lead as CEO, and we are all aligned in our commitment to responsibly manage capital and maximize shareholder value.
Other than China, we achieved strong underlying revenue growth in all markets, including the USA, Australia, and the rest of the world, compared to FY 2022. We previously gave guidance for FY 2024 revenue of AUD 80 million, and I'm very pleased to say that after 2 months, July and August of this financial year, we are on track. Our expectation is still to be cash flow positive in FY 2025. Moving to the introduction. Some of our investors already know me, and for those that don't, I have more than 25 years experience in fast-moving consumables. Experience in the global health, nutrition and wellness category, and importantly, I am an investor in small cap equities, just like all of you. I promise to work hard for all of our shareholders, and we are determined to return and restore shareholder value.
In early July, we announced our strategic review and our simple but achievable five-point plan to responsibly manage capital and maximize shareholder value. I am pleased to say we are already making solid progress towards our strategic review priorities, and our new general managers, Chris in the USA and Jackie in China, are both rapidly building momentum in their respective markets. Looking at this slide and working left to right, the USA remains our big bet and growth engine, and where we grew revenue 200% year-on-year. Our FDA pathway is 100% on track and on time. We have moved quickly to reshape our Bubs product portfolio and fast-track innovation, but there is more to do. Our food portfolio, while performing well, is very low margin.
We are committed to sweating our state-of-the-art Deloraine manufacturing facility, and we have already commenced contract packing for one leading infant formula brand. Jackie and his team up in China have appointed two new corporate Daigou partners who have already commenced ordering from Bubs, and our new trade partner, or TP, is helping to build our presence in cross-border e-commerce. Our monthly operating expenses remain too high at present, but we do expect they will moderate as some of the non-recurring expenses start to drop off over the next few months. We have already sold some of the obsolete inventory that has already been provided for or written off, which helps with cash flow, but we have so far only achieved stock feed values. However, we do have some good leads that might yield a better return, and we will update the market in due course.
Bubs' total addressable market is immense, and please don't read too much into the declining birth rates in China and elsewhere. Bubs is not trying to dominate China, but we do intend to steadily grow a premium niche position profitably in that market, and we think the long-term demand for our products and brands remains strong.... Bubs is only scratching the surface in terms of the addressable market in which our products and brands can compete, and we see a very bright future for our business. Now to the financial overview. Obviously, FY 2023 was a very poor set of financial results. Group net revenue was 32% lower to AUD 60.1 million. However, AUD 57.7 million, or 96%, was branded revenue, which is a small positive in amongst this poor set of numbers. Underlying gross margin was in line with prior year at 30%.
Our underlying EBITDA loss was AUD 34.4 million, but we haven't normalized approximately AUD 9 million in non-recurring one-off costs, such as the FDA costs of AUD 3.5 million, capitalizing costs of AUD 2 million, employee retention costs of AUD 1.4 million, legal fees of AUD 1.2 million, and our ERP implementation costs of circa AUD 1.1 million. So the result looks worse than it is. Bubs' statutory after-tax loss ballooned to AUD 108 million, but that figure does include non-cash significant items of AUD 70.8 million. I should mention, we have provided a statutory net loss to underlying EBITDA reconciliation on page 31 of the results presentation released to the ASX this morning.
And to round out the financials, we had AUD 26 million cash in the bank at year-end and $8 million of headroom in a $10 million debt facility that we recently renewed. Looking at our P&L for last year, revenue was down 32.4% on prior year due to a reduction in China revenue. The fall in the China revenue was partially offset by growth in the USA and domestic markets. Underlying gross margin of AUD 17.9 million, at 30%, is broadly in line with FY 2022 due to the continued strong product mix and reduced bulk sales in FY 2023. Our marketing costs increased 57%, reflecting the investment in the USA, where Bubs now holds a 94% share of the goat infant formula market and where we are investing for growth.
As I mentioned a moment earlier, our administrative and other costs increased due to some large one-off expenses, such as the FDA-related costs, capitalizing costs, legal fees, retention payments, and the ERP implementation costs. We also took up an impairment of AUD 36.2 million, recognized to intangibles, including brand names, AUD 4.1 million, license, AUD 28.9 million, and customer contracts, AUD 3.2 million. One-offs include the following non-recurring, non-cash items: share-based payments of AUD 600 thousand, an inventory provision of AUD 27.3 million, credit losses of AUD 6.8 million, and the already mentioned intangible asset impairment of AUD 36.2 million. I think this slide is important because it demonstrates three things. One, just how significant the decline in China was year-on-year. Two, the upside potential in the USA expansion strategy.
Thirdly, if you can look beyond China, the rest of the Bubs business and geographies actually performed pretty well year-on-year. I've included a gross margin slide because it's an important focus area for the business. It's critically important to our goal of break even and being cash flow positive in FY 2025. It's also important because we're not going to chase sales for sales' sake. Moving to the balance sheet. I've already talked about our cash balance, so moving to trade and other receivables, which were lower due to the AUD 6.8 million allowance for credit losses and lower June 2023 sales versus the prior year. Other current assets were lower due to a AUD 7.4 million reduction in prepayments for raw materials at June 2023.
Inventories were also lower compared to June 2022, reflecting the stock provision write-downs relating to stock held in China. Intangibles are lower due to impairments relating to intangibles, as I've already mentioned. Trade and other payables were lower, as the majority of the balance owed at June 2022 was to Alpha Group for the high volume of China sales back in June 2022. Borrowings, I've already talked to. Looking at our sales by regional geography, you can see that we have grown our revenue in all key markets other than China. You can also see just how significant the AZG pipe fill sales into China were in FY 2022. Now for some good news. I think this is really exciting for Bubs, and strategically and competitively sets us apart from almost all of our competitors.
As you know, Bubs were granted a unique opportunity under the U.S. Enforcement Discretion and Project Fly Formula, and the company has made the most of this opportunity with broad distribution across the U.S. As I said, our USA business grew 200% year-on-year in FY 2023, and now represents 40% of group sales. And we remain on track to gain permanent access to the second biggest infant formula market in the world by 2025. As you can see in this slide, we are investing for growth, and as you would expect, our investment is directed towards the fast-growing U.S. market, where we have a first mover advantage in goat infant formula. We did have to over-invest in the USA in FY 2023 to ensure we were driving velocity and pull-through in key retail stockers after the successful and initial Fly Formula pipe fill.
Our marketing investment, at 26% of group revenue, has now peaked, and it will gradually reduce each year as we build our brand awareness in the USA and we fine-tune our marketing spend. Remembering that brand building and brand investment is measured over multiple years, we do expect to benefit from this investment and brand halo in the future as we look to adjacent markets such as Canada. Moving on to the strategic imperatives. Okay, so this is the Bubs investment proposition and competitive moat as we see it. Bubs are playing in a massive addressable market, which is greater than $100 billion when you include infant milk formula, food, and adult nutrition. We have a highly differentiated brand and, importantly, a first mover advantage in the U.S. Australian provenance and dairy credentials remain important, particularly in the Asian markets.
We are a capital light, business, and we have substantial operating leverage. Deloraine is now the only U.S. FDA-approved infant formula manufacturing plant in Australia, and with significant capacity. We have a multi-country, multi-channel go-to-market strategy, which will help de-risk the business as we continue to grow. So building on the last slide, our USA business is going great guns. Total revenue of $23.9 million in FY23, with 200% growth year-on-year. In 2023, we sold more than 400,000 tins, and our exit rate coming out of FY23 is more than $600,000 in weekly revenue. Amazon is going from strength to strength, and we have a good mix of bricks and mortar and e-commerce retailers from the East Coast to the West Coast of the USA and everywhere in between.
As I've already said a few times, our FDA regulatory pathway is 100% on track and on time for permanent access in FY 25, which you'll see in the next slide. Hopefully, you will have all seen our clinical trial update provided to the ASX today, that highlighted our clinical trial has now commenced right on schedule. Bubs' clinical trial involves a nationwide growth, tolerance, and safety study of healthy term infants consuming Bubs infant formulas, and monitored by healthcare professionals. The study evaluates all three Stage 1 formulas in the market, including goat milk and two cow milk products, as well as a commercially available formula as the control. I'm pleased to say we continue to meet the timeline and regulatory milestones, and remain 100% on track and on time for permanent access to the USA market in 2025.
So now moving to China. We've already reset our China strategy, and Jackie Lin, who has extensive experience in Chinese fast-moving consumer goods and the infant formula milk market, is leading the charge. As we've said previously, Bubs is targeting a multi-channel, multi-distributor strategy in China, and has already appointed two new distributors in its Daigou channel, as well as a new China-based CBEC trade partner. Bubs is also focusing on growing its adult powder footprint in China with its CapriLac brand. And Bubs will pursue SAMR registration for Deloraine in due course, and as I've previously said, when the geopolitical climate is more conducive. However, we will only invest in SAMR if the market conditions are right and if we can be certain that we can achieve a return on our investment....
I think I've already covered most of this, but suffice to say, we want to dominate our core market of infant and adult goat nutrition, which remains an attractive global market, and where we have a first mover advantage in the U.S. We see lots of category opportunities in white space, and we have a strong pipeline of innovation still to come. Let's not forget our home market, which remains really important. It's still growing and where we have market leadership. Bubs are the number one goat formula brand in the market, and this remains important, particularly for Chinese consumers in China. Let's not forget, we only have 4.9% of the total IMF domestic market, so there is plenty of room to grow.
As I've said previously, we'd love to see our Deloraine plant running at its optimal level and pumping out many more tins of high quality, clean label infant formula and exporting it to the world. However, we are running just above 35% capacity or utilization, which is inefficient from a cost and overhead perspective. It has improved slightly as we have recently taken on a co-manufacturing opportunity with a leading brand, and we have many more inquiries and opportunities that we are working through. As the volume through the plant increases, it will increase our revenue, drive down our unit cost, and it will improve our overall margins. We are very confident we will fill the factory in the next few years. Now to the outlook.
FY 2024 will see Bubs continue to work towards its strategic priorities outlined in the 5-point strategic plan, and we are expecting to be cash flow positive in FY 2025. With the business having now fully reset after a very disrupted FY 2023, the focus is now on continuing the strong growth in the USA, while we rebuild the base business in China. We continue to optimize our portfolio to boost margins, while increasing our asset utilization at Deloraine and ensuring cost and expense management focus, which will ensure we are cash flow positive in FY 2025. So what does all that mean for FY 2024? Our forecast revenue of AUD 80 million, an increase of 25% over last year, and we have started the year well and are on pace. We're targeting gross margins of 40%. We will continue our FDA progress.
We expect our cash burn will reduce from circa AUD 5 million per month to AUD 2 million per month from quarter two, FY 2024. We will maximize the opportunities for the whole of our product portfolio, and we are targeting to be cash flow positive, as I said, in FY 2025. So that completes our FY 2023 results presentation, and I'd like to thank all of our shareholders who have joined the call today. I'd also like to thank our board and all of our dedicated staff, and our key stakeholders in the Bubs family for your continued support. If shareholders have any questions in relation to our full year results, please email them through to investors@bubsaustralia.com, and we will respond. Thank you, everyone, and have a great day.