Blackmores Limited (ASX: BKL) released its 2018 financial results to the market today revealing a 19% rise in net profit.
Blackmores is a leader in manufacturing and selling of vitamins and other tablets.
Here are some of the highlights from the report:
- Revenue grew by 9% to $601 million
- EBITDA went up by 16.8% to $110.5 million (click here to learn what EBITDA means)
- Net profit grew by 19% to $70 million
- Dividend per share increased by 13% to $3.05
According to Bloomberg, analysts were expecting Blackmores to report a profit of $70.7 million. A dividend of $3.28 was also expected. The result appears to have been under analyst’s expectations.
The Australian and New Zealand segment sales were flat at $266 million, though Blackmores now claims it is the clear number one brand in Australia.
Blackmores CEO 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. Our results for the year reflect this focus.”
China sales were up 22% to $143 million. Blackmores said that were was strong growth across all e-commerce platforms. However, the company also booked substantial provisions for doubtful debts in China, costing $5 million of EBIT.
The rest of the Asian region delivered sales growth of $82 million, which was an increase of 20%. Singapore sales were up 22% and Korean sales were up 91%.
Blackmores is spending significantly to grow its presence in the Asian region, which is why the marketing spend increased by almost 40%.
Acquisition
Blackmores also announced the acquisition of Impromy, a weight management business, for $9 million. Its products are exclusively sold in pharmacies.
The weight management program was developed by Impromy, Probiotec Limited (ASX: PBP) and CSIRO. Blackmores said the program is supported by strong research and clinical studies by CSIRO and Griffith University.
The acquisition is expected to be earnings accretive in the first year.
Outlook
Blackmores will continue to focus on Asia, with the company recently starting an agreement with Alibaba. Blackmores also signed an agreement with NetEase Kaola last week.
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