“ … we need to continue to reset the business over the next 18 months to return to sustained profitable growth,” the Launceston-headquartered baby food and formula company said in its eagerly awaited half-yearly report for the period until December 31, which was released on Friday afternoon.

The current board might not get that long, with disgruntled shareholders spearheaded by Tasmanian businesswoman Jan Cameron aiming to oust four independent directors and install three challengers including Ms Cameron at an extraordinary general meeting in Melbourne on February 28.

A class action has also been launched against the company on behalf of investors after its share price tanked late last year following market difficulties and a build-up of inventory.

More legal action might follow.

“Bellamy’s is currently facing a numbers of challenges,” acting chief executive Andrew Cohen said.

“However, we are implementing a turnaround program aimed at improving returns for all stakeholders.

“We are making strong progress with our business plan and have already undertaken several structural improvements aimed at a material reduction in our operating costs and staff numbers have been reduced to a sustainable level.”

Mr Cohen said the marketing strategy had been reassessed and Bellamy’s had aimed a marketing drive at daigou (shopping agents who buy and send goods to China, generally for a margin) channels and stabilised Australian sales.

“We are reviewing our supply chain to reduce ingredient costs, consolidating our Australian and Chinese reseller partners and plan to increase the number of stores selling our products in China by 1600,” Mr Cohen said.

“We have a clear focus on our priorities and the resetting of the group strategy will centre on increasing free cashflow and improving sales domestically and offshore.”

Bellamy’s said half-year net profit after tax of $7.2 million and revenue of $118.3 million were within guidance, and it expected to meet full-year revenue guidance of $220-240 million.

Revenue was up 12.5 per cent compared to the last half of 2015, but down 15.1 per cent from the first half of 2016.

Net profit after tax was down 47 per cent on the same half a year earlier.

The report said a build-up of Australian label inventory by Chinese and Hong Kong resellers in 2016 led to oversupply,  causing widespread discounting on Chinese e-commerce platforms.

It said that reduced the competitiveness of daigou channels and slowed Australian sales.

Borrowings increased by $14.5 million to $14.6 million during the half.

The report said Bellamy’s had a $40 million banking facility in place to manage working capital as it worked to reduce inventory to “manageable levels” while using a pricing strategy which reflected its premium branded products.

“It will take time to reduce inventory levels due to the lead time on ingredient orders and production schedules,” it said.

It said that meant it did not expect inventory levels to change materially by the end of the financial year.