Blackmores hit by COVID lockdowns as cold, flu risks wane

Blackmores has posted a 90 per cent jump in net profits for the year with vitamin sales rocketing in Asian markets, but Australian sales have lagged because of a mild cold and flu season.

The $1.5 billion wellness brand revealed profits of $28.6 million on Thursday, an 89.4 per cent increase on 2020, and told investors it would pay a fully-franked final dividend of 42c per share.

Blackmores was powered by strong growth in overseas markets.Credit:Leah Boothanom

Blackmores received revenues of close to $576 million for the year, with the company’s sales into China and other international markets powering the result.

“The China recovery continues with far better online marketing and stronger customer events with and during key consumption periods, with revenue for the year up 28 per cent,” chief executive Alastair Symington said.

The picture was less rosy for Australian and New Zealand sales, however, with sales down 14 per cent for the year to $280.6 million.

The loss of Chinese daigou shoppers and international students because of border closures is continuing to hit the business. A significant portion of local revenues have traditionally come from overseas shoppers buying up products while in Sydney and Melbourne.

Blackmores said Australians are also buying fewer vitamins because COVID-19 lockdowns have significantly reduced cold and flu risks.

“Sales were also impacted by a prolonged lack of cold & flu season, prior year pantry stocking of ArmaForce and a period of out of stocks of BioCeuticals due to limited supply of high demand ingredients and label changeovers,” management said.

ArmaForce is one of the brand’s flagship products and is a multivitamin designed to boost the immune system.

Tough local conditions sales are expected to continue into next year.

“We expect challenging conditions to persist in the vitamins and supplements market as
international borders remain closed and state-based lockdowns continue to impact retail spend and foot traffic,” the company said.

Shares opened 1.1 per cent lower to $78.91 but had recovered to be trading flat at $79.80 by 10:30am.

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