Blackmores stocks dive as H1 profit falls
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A weak Australian retail market has dampened vitamin maker Blackmores' first half profit result, as increased costs offset a boost in sales.
The company lifted sales across Australia, Asia and New Zealand by 29 per cent rise to $164.3 million.
However, its net profit fell 4.8 per cent to $13.6 million in the half year to December 31.
Blackmores shares had plummeted $4.20, or 12.2 per cent, to $30.11 by 1338 AEDT.
The company's bottom line was impacted by spending more on advertising in Australia and costs linked to its recent launch in China.
"Blackmores is not immune to the pressure of retailing in such a challenging and changing market, and significant investment was made in both marketing and trade support in the period," Blackmores said in a statement on Thursday.
"This has impacted Blackmores' margins and dampened their first half profit performance in Australia."
Sales in Australia and Asia both rose by 10 per cent, but growth in Korea was hampered by delays in new product approvals.
But Blackmores says it remains confident about the health of its Asian business.
Sales also rose for BioCeuticals, an Australian brand of practitioner-only supplements which Blackmores acquired last July.
Chief executive Christine Holgate said Blackmores expected the Australian retail market to continue to be challenging and would require additional investment.
"With the contribution of BioCeuticals earnings and the expected benefit of further Asia sales growth, we believe we can deliver a similar full year profit to the previous year," Ms Holgate said.
Blackmores maintained its fully-franked interim dividend at 44 cents per share.