Changes are happening - please bear with us while we update our site.

Changes are happening - please bear with us while we update our site. Click here to give us your advice and feedback.

Blackmores (ASX:BKL) is doing a $117 million capital raising

Blackmores (ASX:BKL) has announced that it is going to do a capital raising of up to $117 million.

Blackmores (ASX: BKL) has announced that it is going to do a capital raising of up to $117 million.

What is Blackmores?

Blackmores describes itself as Australia’s leading natural health company. Maurice Blackmore founded the company in the 1930s. Blackmores has a number of different brands, not just the well-recognised Blackmores brand. It operates BioCeuticals, the Blackmores Institute, Fusion Health & Oriental Botanicals, Impromy, IsoWhey and Pure Animal Wellbeing (PAW).

Blackmores’ capital raising

Blackmores has announced that it’s looking to do a fully underwritten $92 million institutional placement and a non-underwritten share purchase plan of up to $25 million.

The capital raising share price for Blackmores will be $72.50, which is an 8.1% discount to the last closing price yesterday.

Regular shareholders will be able to apply for up to $30,000 for either the placement price, a 2.5% discount to the 5-day average price up to the closing date, or a 2.5% discount to the closing price on the closing date.

Mr Marcus Blackmore, who owns a large amount of Blackmores shares, won’t be taking part in the capital raising.

Why is Blackmores doing the capital raising?

Blackmores said the money will be used for three purposes. The first is to accelerate growth in Asia, including an FY21 entry into India. The second is an investment in an efficiency program. The third reason is to provide balance sheet strength. It will bring down the (pro forma) net leverage ratio to 0.7x with (pro forma) liqudity of $236 million.

The company said that whilst COVID-19 is causing increased demand for immunity products, non-immunity products are suffering. Access to some overseas materials is constrained.

Underlying FY20 net profit is anticipated to be $17 million to $21 million, in line with previous guidance, as a result of various higher costs and impacts. At the moment the company is potentially going to sell surplus land and non-core brands.

The capital raising is at a material discount to the share price, so shareholders may consider taking part. But I’m personally not sure about Blackmores’ prospects. For Asian growth I’d rather buy Bubs (ASX: BUB).

[ls_content_block id=”14945″ para=”paragraphs”]

Disclosure: At the time of writing, Jaz doesn’t own shares in any of the businesses mentioned. 

$50,000 per year in passive income from shares? Yes, please!

With interest rates UP, now could be one of the best times to start earning passive income from a portfolio. Imagine earning 4%, 5% — or more — in dividend passive income from the best shares, LICs, or ETFs… it’s like magic.

So how do the best investors do it?

Chief Investment Officer Owen Rask has just released his brand new passive income report. Owen has outlined 10 of his favourite ETFs and shares to watch, his rules for passive income investing, why he would buy ETFs before LICs and more.

You can INSTANTLY access Owen’s report for FREE by CLICKING HERE NOW and creating a 100% FREE Rask Account.

(Psst. By creating a free Rask account, you’ll also get access to 15+ online courses, 1,000+ podcasts, invites to events, a weekly value investing newsletter and more!)

Unsubscribe anytime. Read our TermsFinancial Services GuidePrivacy Policy. We’ll never sell your email address. Our company is Australian owned.

Information warning: The information on this website is published by The Rask Group Pty Ltd (ABN: 36 622 810 995) is limited to factual information or (at most) general financial advice only. That means, the information and advice does not take into account your objectives, financial situation or needs. It is not specific to you, your needs, goals or objectives. Because of that, you should consider if the advice is appropriate to you and your needs, before acting on the information. If you don’t know what your needs are, you should consult a trusted and licensed financial adviser who can provide you with personal financial product advice. In addition, you should obtain and read the product disclosure statement (PDS) before making a decision to acquire a financial product. Please read our Terms and Conditions and Financial Services Guide before using this website. The Rask Group Pty Ltd is a Corporate Authorised Representative (#1280930) of AFSL #383169.

Skip to content