The Blackmores Limited (ASX: BKL) share price is up more than 6% after giving a couple of updates.
Blackmores sale
Blackmores announced today that it’s selling its Global Therapeutics business to McPherson’s Ltd (ASX: MCP). McPherson’s is going to do a capital raising to fund the acquisition.
The transaction value is worth $27 million using the enterprise value. The sale includes the brands of Fusion Health and Oriental Botanicals.
Blackmores’ management has been reviewing the portfolio and brands. This sale is going ahead because the company views Global Therapeutics as non-core.
Alastair Symington, the CEO of Blackmores, said: “Fusion Health and Oriental Botanicals are wonderful brands which wonderful brands which play an important role in the health and wellness routine of many Australians. While we have decided that Global Therapeutics is no longer part of our strategic priorities, I want to acknowledge the unique value of these brands and believe Global Therapeutics will now have an opportunity to reach its true potential with McPherson’s.”
AGM update
Blackmores reminded investors about its FY20 result.
It then said that it continues to restructure the business to deliver $15 million of gross annualised savings from the second half of FY21. There are various other initiatives which aim to improve the efficiency of the business and reduce costs further. It’s also looking at reducing the number of products to make it less complicated.
Blackmores also revealed a number of metrics that will act as a dashboard for the business. Those key performance indicators include: net sales, net sales per unit, the gross profit margin, EBIT (click here to learn what EBIT means), net working capital innovation, out of stocks, market share growth, environment and diversity & inclusion.
Time to buy?
Blackmores was looking like an incredible share a few years ago when its share price shot above $200.
I’m not sure if the company will ever return to those heights. Perhaps after a very long time. But it seems to be facing a lot of troubles. Perhaps it’ll be able to turn things around. But there are other ASX growth shares that I believe have much more growth potential like Bubs Australia Ltd (ASX: BUB).
