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NewswireToday - /newswire/ -
Sydney, New South Wales, Australia, 08/27/2009 - Blackmores Australia provides products, information, advice and knowledge on natural health, vitamins, minerals, herbs and supplements - alternative medicine for every man woman and child.
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Highlights for FY09:
• Net profit of $20.8 million – an increase of 9% on last year;
• EBIT at $30.3 million, an increase of 12%
• Revenue up by 12% to $201.2 million;
• Earnings per share up 8% to 127.5 cents;
• Final dividend of 57c per share, delivers full year dividend of 96c.
Blackmores Limited (ASX: BKL), today announced its seventh consecutive year of record profit and revenue, with net profit after tax for the Blackmores group up 9% to $20.8 million for the year ended 30 June 2009.
With Blackmores’ continued product innovation driving improved results across the business, group revenue increased by 12% to $201.2 million. The group’s EBIT was up 12% to $30.3 million and was supported by disciplined management of expenses to mitigate the depreciation costs associated with the new premises.
Based on the strong performance, the Board has declared a final dividend of 57 cents per share fully franked, bringing the full year dividend to 96 cents fully franked, a 6.7% increase on last year.
Blackmores Chief Executive Officer, Christine Holgate, said the better than forecast result across the group for the year followed a strong fourth quarter performance driven by the launch of new products, the success of integrated marketing campaigns, the realignment of management functions, new sales incentives, efficiencies from the Warriewood campus and buoyant activity in the trade sector.
“New products such as Joint Formula Advanced, Back Pain Formula and Magnesium Powder as well as our new children’s range were launched in the second half and all contributed strongly to another record profit,” Ms Holgate said.
“Consumer confidence in the Blackmores brand remains extremely high, as highlighted by the 2009 Reader’s Digest Australia’s Most Trusted Survey which recognised Blackmores as Australia’s Most Trusted Vitamin and Supplement Brand.
“We have exceeded our sales and profit expectations for the year and we have outpaced the 6% industry growth in the vitamin, herbal and mineral supplement category.
“This is a particularly good result given the major operational changes undertaken, the challenging economic environment and the volatility of the exchange rates,” said Ms Holgate.
“In the final quarter, global health concerns also provided an additional sales boost in cold, flu and immunity products.” Ms Holgate said the consolidation of the head office, manufacturing and distribution functions to the new Blackmores Campus at Warriewood had delivered direct supply chain savings. “It also optimised materials handling, storage and order fulfilment, improved occupational health and safety and helped us enhance our customer experiences through a range of benefits such as faster order turnaround and better access to stock.
“In addition to the benefits delivered to the distribution chain, the environmental features of the campus will deliver longer term payback through water and energy self-sufficiency with a carbon footprint one eighth of a comparable development. This resulted in the company being recognised with the 2008 Sustainable Small Company of the Year award.”
In this period, the strategic review of the business resulted in the realignment of Blackmores’ management structure, the appointment of new senior executives and introduction of a new incentives program for the sales teams.
“The review of the business and recent changes to Blackmores’ leadership and business structure have provided the platform to progress recommendations that have emerged from this process,” Ms Holgate said.
By region
Australia
Australian sales grew by 10% compared to the previous year, with an unusually high 22% growth in the last quarter compared with the corresponding period in 2008. The result can be attributed to trade driven activity which leveraged the strong Blackmores brand and product base, the successful national multivitamin marketing campaign featuring Glenn McGrath and the continued contribution of new products. Blackmores (blackmores.com.au) has increased market share and continues to perform very well in the pharmacy channel.
New Zealand
API, Blackmores’ distributor in New Zealand, achieved good results despite challenging economic conditions. API achieved sales, in respect of Blackmores’ products, of over NZ$10M during the year, a 5% increase compared to last year.
Asia
Sales in the Asian region increased by 23% overall, compared to the previous year to AU$28.8 million. Our core businesses in Asia delivered positive growth in local currencies, with the result further enhanced by the impact of exchange rates.
Blackmores Malaysia grew sales in local currency by 2% - a solid performance against a backdrop of negative growth of 3% in the Malaysian economy, reduced household spending and the collapse of Malaysia’s manufacturing exports. Blackmores enhanced its partnerships in the growing independent pharmacy channel and has a renewed focus on new product launches.
Blackmores Thailand achieved 11% sales growth in local currency despite the Thai economy experiencing negative economic growth. The result can be attributed to the premium positioning of the Blackmores brand, targeted sales promotions and a strong performance in modern chain pharmacies.
Debt Levels
At the end of the financial year, gross debt stood at $47.4 million (2008: $38.0 million) and net debt at $33.6 million (2008: $25.8 million). The increase in debt is wholly related to funding the construction of the new Blackmores Campus. Gearing, as measured by Net Debt / (Net Debt + Shareholders’ Equity) was 36.5% at year end compared to 33.9% for the prior year.
Outlook
The vitamin, herbal and mineral supplement category in Australia is currently growing at approximately 6%.
While the 2010 profit result will reflect a full year of interest and depreciation charges associated with the new premises and the volatility in exchange rates is expected to continue, we anticipate making a marginal increase in profit in the coming year as the company continues to invest in new products and its people.
Investor Contact:
Rananda Rich, Acting Chief Financial Officer
P: 02 9910 5130
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blackmores.projects[.]gmail.com 
