Black­mores profit dip

Pharmacy Daily - - NEWS -

BLACK­MORES has been hit hard by reg­u­la­tory changes in China, with the com­pany’s shares briefly dipping be­low $100 yes­ter­day as it an­nounced its quar­terly re­sults.

Group sales dropped 8.1% and net profit after tax dived 46.6% to $12 mil­lion - but ceo Chris­tine Hol­gate was up­beat.

She said the nutri­tional foods part­ner­ship with Bega had been “slug­gish” (W 26 Oct) as the Aus­tralian mar­ket adapts to over­stock­ing, but “we fin­ished the quar­ter in a stronger po­si­tion than we started with im­proved sales and prof­itabil­ity mo­men­tum.

“Im­por­tantly, con­sumer de­mand re­mains high, though our profit re­sult for the first quar­ter was im­pacted by softer sales in Aus­tralia pri­mar­ily as a re­sult of changes in the ex­port mar­ket which pre­vi­ously was largely ser­viced through Aus­tralian re­tail­ers,” she said.

In­vest­ments in op­er­a­tional in­fras­truc­ture were also cited as im­pact­ing on the lower profit.

Hol­gate high­lighted ma­jor growth in the com­pany’s China busi­ness with in-coun­try sales and sales from the new ex­port divi­sion ser­vic­ing the China mar­ket at $31m, up 220% on the prior cor­re­spond­ing pe­riod.

In-coun­try Asia sales were re­ported up 37% and Black­mores’ launch into In­done­sia in Sep has re­turned “en­cour­ag­ing early sales”.

Hol­gate said that over­stock­ing ap­pears to be eas­ing, con­sumer de­mand re­mains ro­bust and the growth of China busi­ness points to a strong fu­ture, con­sis­tent with “the Group’s strate­gic fo­cus and long-term growth prospects”.

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