SALES BOOM BUT BLACKMORES LOSES SPEED ON ASX
Written on the 24 August 2016 by Laura Daquino
BLACKMORES (ASX: BKL) sales climbed 52 per cent in the year to June, resulting in a profit increase in the triple digits.
The Sydney vitamin and supplement maker says growing demand means it doubled production capacity over the year.
Still, with the good news, Blackmores delivered a word of caution about the volatility of the Australian wholesale market, which has 'softened in recent weeks impacted by retailers destocking and some exporters changing the channels through which they acquire products'.
Blackmores expects its first quarter result to be down - and investors weren't impressed, with the company shedding more than 12 per cent within 90 minutes after opening.
Sales for the most recent reporting period totalled $717 million, which the company extracted a net profit after tax of $100 million from.
Blackmores' Australian business delivered $494 million of these sales, while its Pure Animal Wellbeing (PAW) animal health division grew 31 per cent to achieve $7 million in sales.
Blackmores CEO Christine Holgate (pictured) says Asia delivered mixed results, on the whole experiencing a strong sales year, but Korea having a few challenges.
"The region delivered top line growth achieving sales of $81 million (up 6 per cent) including sales from Thailand and Malaysia," says Holgate.
"Asia sales were bolstered by in-country sales in China of $48 million (up 536 per cent). The expansion of free trade zones and our ability to serve e-commerce customers through our bonded warehouse in China have enabled us to benefit from the opportunities in Asia.
"We estimate that Chinese consumers influence over $250 million of our group sales through a combination of export sales, in-country sales and sales through Australian retailers."
Blackmores will be launching in Indonesia next month hoping to capitalise on a fast growing middle class and growing health consciousness.
In the US, Blackmores intends to spread its business where it has just commenced distribution for BioCeuticals, a practitioner-only range acquired in 2012 showing 25 per cent year-on-year growth.
Blackmores will pay a final dividend of $2.10 per share, taking the total yearly dividend to $4.10, up 102 per cent on last year. Shareholders will be paid on September 21.
Blackmores is trading at around $142 on the ASX this morning.
Read about Blackmores' record first half result earlier this year which exceeded its FY15 profit.