Blackmores Announces Strong Half-Year Results

Warriewood, Australia (PressExposure) February 23, 2009 -- Blackmores Limited (ASX:BKL) today reported strong revenue growth for the 2008/09 financial year, despite the challenging economic environment placing pressure on retail expenditure across the economy.

The company also announced that Marcus Blackmore has today relinquished the title of Executive Chairman to become Chairman, following the recent appointment of Christine Holgate as CEO.

Ms Holgate, said the company’s 5.9% growth in revenues for the first half was largely attributed to a solid performance from its key Australian pharmacy channel and the continued growth of its Asian operations.

The Board declared a 39 cent per share interim fully franked dividend, which is steady compared to 1H 2007/2008.

“The first half results give management and the Board confidence that the Blackmores brand is well placed to deliver a full year profit result in line with last year’s $19 million,” Ms Holgate said.

“While the economic pressures have seen retail sales under some pressure, our sales have held strong as a result of our leading brand, premium offering and the investment we have made in building loyalty and trust with our consumers and partners.

“The challenge of building our new campus and relocating from our Balgowlah and Brookvale premises to the new Warriewood site did put significant strain on our company yet we have still delivered a sound result.”

The results showed that the company had controlled its operating expenses to mitigate increases in raw materials and other associated costs arising from the economic climate. Profit before tax includes $2.1 million of unrealised losses in respect of the company’s hedging of key foreign currencies in a volatile environment.

Although debt increased as a result of the construction of the new purpose built Warriewood campus, the campus gives the company the platform to support future growth and drive further operational efficiencies.

Operations by market

Blackmores’ Australian operations posted first-half revenues of $86.6 million, representing a 6.3% growth compared to the previous corresponding period.

Although our shipment sales to API, our NZ distributor, were lower in Australian dollar terms, Blackmores has grown market share in key channels in New Zealand.

The company’s Asian operations - which contributed 15% to the company’s total revenues - increased revenues by 23.7% for the first half to $14.5 million.


Directors have declared an interim dividend of 39 cents per share (fully franked), equalling the interim dividend declared last year.

This will be paid to shareholders registered at 5.00pm on 5 March 2009 and payable on 19 March 2009.

The company has also announced that its shareholders are able to participate in a Dividend Reinvestment Plan, which is currently providing a 7.5% discount. Governance

Mr Blackmore today said he relinquished the title of Executive Chairman to become chairman effective immediately.

Mr Blackmore has been particularly impressed with Blackmores’ new CEO, Christine Holgate. Mr Blackmore said. “As Chairman of the Board, I look forward to providing her with business development and strategy advice as well as continuing to represent the company.”

Mr Blackmore will take a substantial cut in pay commensurate with his lesser executive role. In the interests of good governance, Deputy Chairman Stephen Chapman, will continue to act as Lead Director. Outlook

Ms Holgate said while conditions would continue to be challenging as a result of global financial instability, the Board and management believed Blackmores had the right foundations in place to deliver a result in line with last year.

A strategic review is currently underway to build on revenue opportunities and operational and manufacturing efficiencies.

“While Blackmores has the diversity in product, channels and markets to meet existing challenges, the Board and management believe there is scope to further improve performance,” Ms Holgate said.

“We intend to build on the company’s core strengths such as its leading position in complementary medicines, diversity of markets, extensive product range and a distribution channel made up of pharmacy, grocery and health food retailers.

“What’s more, this is underpinned by a solid brand that is synonymous with consumers in Australia - and increasingly among the Asian markets - as being a trusted Australian brand that is made from natural ingredients.”

Ms Holgate said that the confident outlook by Blackmores was supported by industry experts forecasting which suggested that the Australian health sector is expected to remain strong.

“We believe the growth opportunities in our Asian markets are also significant, as we continue to build brand awareness.

“We also have a strong pipeline of innovative new products being rolled out which are first to market, including a range of nutritional supplements [] that meet the specific needs of children which are great tasting without the need for artificial sweeteners.

“At the same time, we expect to see greater operational efficiencies from the move to our purpose built Warriewood campus that will enable to us to continue to build on superior product and services to our customers.”

For further information please contact:

Media inquiries:

Peter Laidlaw/Chris Newlan

Lighthouse Communications Group

0419 210 306 or 0407 881 139

Investor inquiries:

Peter Barraket

CFO, Blackmores

02 9910 5128

About Blackmores

Blackmores provides products, information, advice and knowledge on natural health, vitamins, minerals, herbs and supplements - alternative medicine for every man woman and child.

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Press Release Submitted On: February 22, 2009 at 9:24 pm
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