BLACKMORES SKYROCKETS TO RECORD LEVEL WITH CHINA BOOM
25 February 2016, Written by Sydney Business News
CHINESE money has boosted Blackmores' (ASX: BXL) profit to a record first half level, up 160 per cent.
The Sydney vitamins and supplements maker posted a $48 million net profit after tax for the six months to December 30.
This exceeds the total profit last year.
Blackmores CEO Christine Holgate (pictured) says sales were up 65 per cent over the period to $341 million and were fuelled by spend in China. Australia accounted for $238 million of this, and still this figure was said to be bolstered by Chinese tourists and entrepreneurs.
"China, in particular, continues to grow in important with sales to Chinese consumers, both direct and through Australian retailers, estimated to represent 40 per cent of group revenues," says Holgate.
"Sales to retailers in Australia have been bolstered by Chinese tourists and entrepreneurs, as well as from continued innovation and marketing activity."
Holgate says innovation and digital marketing around Blackmores' new Superfood range and the opening of an experiential flagship store also drove sales.
The profitable period was underpinned by total group expenses of $273 million, an increase of 53 per cent on the prior corresponding period, reflecting an increase of raw materials and freight.
Holgate says Blackmores is geared up for the future, having invested in a third production and distribution shift over the period.
In an announcement to the ASX today, Holgate referred to Indonesia and infant nutrition being hot markets for the company going forward.
Both are being executed through joint ventures, with Kalbe Farma facilitating entry for the company into the Indonesian market, and Blackmores and Bega Cheese (ASX: BGA) creating a joint venture into infant formula during the reporting period.
The infant formula starting selling in January, and while sales weren't factored into this reporting period, Holgate says the company's 'have made exciting progress'.
Holgate says the Blackmores board is confident it can achieve strong profit growth off the back of this result for the full year.
The company will pay a full franked interim dividend of 200c per share, a 194 per cent increase for shareholders on the prior corresponding period.
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