China sales are continuing to turbocharges sales at Blackmore.
The vitamin company, whose shares are the most expensive on the ASX, posted a record profit of $76 million for the first nine months of the financial year, a 145% increase.
Sales were up 63% to $532 million.
“China is an important part of our growth strategy and I’m particularly pleased that even excluding the influence of Chinese consumers our group is growing underlying sales at 14%,” said Blackmores CEO Christine Holgate.
“This is our tenth consecutive quarter of year on year growth underpinned by strong top line revenue increases from all regions and brands across the group resulting in a record bottom line for shareholders.”
A short time ago, Blackmores shares were up 3.7% to $153.22.
Sales of Blackmores-branded products in Australia for the period were $369 million, up 71%.
Blackmores Asia in-market sales of $98 million grew at 64% with year-to-date revenue already exceeding the previous full year.
The results follow from the half year results released in February, showing a profit of $48 million, a rise of 160%.
Holgate says she is pleased with the performance of all brands and regions.
“We remain confident that we will deliver a strong full-year profit result and improved returns for shareholders and staff,” she says.
The Chinese government has announced regulatory developments for cross border e-commerce trading, a move initially seen as a negative for Australia producers.
Many of Blackmores products reach China via resellers who buy in Australia and sell in China online. There had been rumours for the last year or so that the free trade zones were going to close completely.
However, Blackmores says it welcomes the focus from the Chinese government on clarifying rules for importing.
“We believe it is a positive reflection of their commitment to the free trade zones,” says Holgate.
“I am also encouraged to see further opportunity for Blackmores with the announcement of more ingredients approved for sale in the broader retail market in China.”
In January Blackmores announced the first release of its infant nutrition range, with a limited distribution into Australian pharmacies.
The range is the first product launch from the joint venture between Blackmores and Bega subsidiary Tatura.
“We are now well positioned for the launch into Australian grocery retailers and the commencement of marketing in the next quarter,” she says.
“Over the year we have forged stronger partnerships with our suppliers to build reserves of key ingredients to ensure we have access to quality products to meet consumer demand.”