Pharmacy Daily | Blackmores profit dips 10%

The Blackmores group has delivered its annual results for 2012/13, showing a 10% drop in net profit after tax to $25 million. CEO Christine Holgate cited reduced margins in the Australian business, including higher than expected stock write-offs. In particular, “challenges in the Australian retail market intensified, particularly for pharmacy customers, our core customer group, who are going through significant structural change.” Holgate said that “the impact of the increased growth of larger customers as a proportion of the vitamins category, while smaller community pharmacies are declining, has brought challenges to the business”. Margins were also hit by intense competition from other brands including deep discounting. “Although we experienced margin declines in the year, our Australia business is still very profitable and the foundation of our company,” Holgate added. Achievements during 2012/13 included the eleventh consecutive year of record sales, significant progress in sales in the Asia region (up 14% to $60m), along with China and Macau launches. Holgate also highlighted the successful Bioceuticals acquisition, the launch of the Blackmores Institute and partnering with major educational establishments. “Expenses were prudently managed...this coupled with further operational efficiencies, improved treasury management and stronger profit contributions from other business, helped mitigate the full impact of lower Australia margins,” Holgate said. Despite the challenges, Blackmores believes the overall market will grow as complementary medicines become more mainstream, with the company “well positioned to capitalise on this opportunity”. “We continue to expect sales growth and to improve our profit performance in the coming year,” Holgate said.

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