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Blackmores hit by Aust vitamin sales slump

Simone Ziaziaris  |  29 Aug 2017Text size  Decrease  Increase  |  

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SYDNEY - [AAP] Vitamin maker Blackmores' (ASX: BKL) full-year profit has tumbled 41 per cent to $59 million on the back of a slump in Australian sales due to a decline in Chinese consumers.

The company said potential regulatory changes in China had impacted the buying patterns of Chinese entrepreneurs and tourists who previously were purchasing Blackmores products through Australian stores.

It said the reduction was significant and came without warning, particularly in the first half of the year when Australian sales revenue suffered a 31 per cent fall to $158 million.

Full-year revenue from ordinary activities fell 3 per cent to $692.8 million with the bulk of sales coming from the Australian and New Zealand arm despite a 23 per cent drop compared to a year ago.

But Asia direct sales were up 36 per cent to $216 million, while its BioCeuticals Group, which includes the BioCeuticals and the Global Therapeutics brands also grew with sales of $102 million.

"The demand for Blackmores' products in China remained strong throughout the year although the route to serve it has changed significantly," the company said on Tuesday.

Blackmores said it responded quickly to the changes and was able to close the year with direct sales in China up 71 per cent to $132 million.

The vitamin maker said it had increased its inventory provisions from $2 million to $14 million to protect against possible future uncertainty, which had impacted earnings by around $10 million for the full year.

It said it expects regulation, pricing, and evolving market conditions to continue to provide challenges in the year ahead but, notwithstanding these challenges, believes its Asia division, particularly China, will strengthen.

AUST SALES SLUMP HITS FY PROFIT:

* Net profit down 41pct to $59m

* Revenue down 3pt to $692.8m

* Final dividend of $1.40, fully franked, vs $2.10

 

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