Double-digit Asian sales growth boosts Blackmores profit
Double-digit sales growth in Asia, including record sales in the June quarter, helped vitamins and supplements company Blackmores lift its net profit 18.6 per cent to $70 million for fiscal 2018.
Blackmores also unveiled the $9 million acquisition of the pharmacy-only Impromy weight management program that was co-developed by Probiotec and the CSIRO.
Blackmore's result came from record revenue of $601.1 million, up 8.9 per cent on the previous year.
“Revenue was a record for the group and in the financial year we sold more product than ever in our 86-year history. The strongest growth continues to come from our businesses in Asia, which delivered record sales in June,” Blackmores chief executive Richard Henfrey said.
“Our focus has been on refining our strategic priorities to capture the significant opportunities for our brands and driving stability within the business to enable sustainable growth,” he said. “Our results for the year reflect this focus.”
The company is confident that it can keep increasing its sales in Asia, a market where sales jumped 22 per cent in China to $143 million, while sales in other Asian markets exluding China rose 20 per cent to $82 million. Sales in Singapore and South Korea also grew strongly.
"China continues to be a significant opportunity for Blackmores and in addition to our Alibaba agreement, last week we signed a strategic co-operation with NetEase Kaola. Our vision for China is not limited to e-commerce sales, and we’re actively building our offline business and affirming our credibility as a leading natural health advocate," Mr Henfrey said.
The market reacted positively to Blackmores' results, with the stock up 6.4 per cent to $154.60 shortly after 11am on Tuesday.
The Sydney-headquartered company declared a fully franked final dividend of $1.55 a share, to be paid on October 12. The stock will go ex-dividend on September 26.
Blackmores said the Impromy acquisition was expected to be earnings accretive in the first year.
“This acquisition supports our strategic priority to drive innovation and leverage expertise in areas of chronic disease, with a program that is evidence-based and has been readily embraced within community pharmacy,” Mr Henfrey said.
The company said consumer demand across all regions and businesses remained strong, and it was investing more in its brands to underpin continued growth.
While sales in China surged in fiscal 2018, Blackmores said the environment was different in its Australia and New Zealand market. The local market remained flat, Blackmores said, with sales of $266 million. But the company said Blackmores was "the clear No.1 brand in Australia".
Blackmores' full-year $70 million profit was virtually in line with market expectations of $71 million.
Last year, it reported a net profit of $58 million as, for the first time in its history, it recorded more than 50 per cent of its sales to foreign consumers.