Blackmores has suffered a 41 per cent fall in first-half profit on the back of a slump in Australian vitamin sales, confirming the end of its astronomical profit growth fuelled by China's demand for vitamins.
The vitamins and nutritional supplements maker made a net profit of $28.5 million in the six months to December 31, as its sales revenue dropped 5.7 per cent from a year ago to $322 million.
Sales in Australia were down 31 per cent to $158 million, but returned to modest year on year growth in the December quarter.
Chief executive Christine Holgate said first quarter sales were impacted by changes to the buying patterns of Chinese exporters and high stock levels held by Australian retailers.
The company reiterated that its full-year results will not match the prior year's, when profit more than doubled to $100 million, even though it had improved its sales and profit position in recent months.
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"We are encouraged by progress in the second quarter across the group, though the Australian retail environment remains challenging," Ms Holgate said.
Blackmores shares posted their biggest one day fall since Auguyst 2016, when the company first indicated sales growth was slowing. The shares dropped $12.05, or 10.3 per cent, to $104.53.
The company's China direct sales were strong, delivering almost $64 million in the half, up 92 per cent on the previous corresponding period. Other Asia sales, excluding Korea, were up 16 per cent.
"The Chinese market is both complex and challenging, though it remains a very important part of our business and we are pleased with our growth," Ms Holgate said.
Blackmores said it is continuing to focus on reducing and redirecting costs in the business and has increased brand and infrastructure investment to help future growth.
STRONG GROWTH COMES TO AN END FOR BLACKMORES
* Half year net profit down 41 pct to $28.5m
* Revenue down 5.7 pct to $322mn
* Interim dividend down 70 cents to $1.30, fully franked
