Pharmacy Daily | Blackmores posts solid results 1H23

BLACKMORES Limited yesterday announced its financial results for the half year ended 31 Dec 2022 (1H FY23), with the company saying its Bioceuticals brand had performed particularly well in terms of pharmacy sales in Australia and New Zealand.

Chief Executive Officer, Alastair Symington said "Blackmores delivered a solid result with continued revenue and earnings growth momentum in its Australia/New Zealand and China segments offset by its International segment which lapped a very strong prior corresponding period (pcp) that primarily included COVID-19 demand surge for immunity products.

"The company has announced a strong interim dividend of 87 cents per share fully franked, an increase of 38%, with an increased dividend payout range.

"Our teams have continued their disciplined focus on execution with improved customer service levels and continued new product and brand innovation which drove market share and distribution gains across our core geographies.

"Operational expenditure reduced by 6.3% while we remain on track to achieve our target of $55m annualised gross cost savings by the end of FY23 with $6m in savings delivered during the first half.

"Today we have also outlined the next phase of cost savings targeting an initial $34-44m in further gross cost savings over FY24 - FY26.

"While the near-term operating environment remains uncertain, we remain focused on executing our strategic and commercial plans and leveraging the Group's channel and geographic diversity."

Revenue for the first half was $338m, down 1.6% on pcp with sales growth in both the Australia/New Zealand and China segments, offset by the decline in revenue from the International segment.

Amidst a higher cost inflationary environment, underlying gross margin declined from 53.9% to 53.3% with margin improvement in Australia/New Zealand and China, offset by lower gross margin in International due to the strong pcp comparison.

However, compared to 2H FY22, gross margin was up 1.5ppts.

Underlying Group EBIT declined by 5.5%, reflecting the decline in International due to the strong pcp comparison, partially offset by improved earnings in Australia/ New Zealand and China.

EBIT in 1H FY23 also included a 17.6% increase in advertising and promotion expenses, as the Company stepped up investment behind its core brands including reinstatement of the Blackmores Sydney Running Festival.