Blackmores (BKL) is focused on vitamin and mineral supplements and natural skin and hair treatment products throughout Australasia. The company also provides information services and carries out research and development into natural preventative health care.
Company Strategy
Organic growth is driven by high levels of research and development focusing on areas where health awareness is high such as obesity, cardiovascular and joint problems. Offshore diversification is ongoing, particularly across Asia where the regulatory burden is lower. As production capacity at the new Sydney facility increases BKL will target additional regional Asian markets with similar demographics. BKL reported underlying FY07 NPAT up 15.4% to $16.7m compared to our $17.6m forecast. Sales revenue grew 16% to $171.7m driven by new product launches and strength across all business units. Gross profit margins firmed 77 bpts to 58.2% mainly due to improved sourcing and scale benefits in the production process. EBIT grew 21.2% to $24.2m with EBIT margin up 60 bpts to 14.1%. A final dividend of 46 cps is payable September 24, bringing the fully franked full year dividend to 81 cps.
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