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Is Blackmores Limited (ASX:BKL) share price headed to December ‘17 highs?

Natural health company Blackmores Limited (ASX: BKL), best known for its vitamin range, has had a share price resurgence today, up 3.3% to $123.49 after a day of falls yesterday off the back of its first-quarter results release and AGM.

Blackmores is among several well-known S&P/ASX 200 shares with a share price of above $100, with CSL Limited (ASX: CSL) and Cochlear Limited (ASX: COH) also on the list – currently priced at $177.36 and $173.37 respectively.

With strong first quarter results logged, the retailer has retained clear brand leadership in its sector for the last decade, with a 17.5% market share and household name brand identity that should hold Blackmores in good stead to book some steady gains throughout FY19.

Blackmores’ share price hit a 52-week high last December, at $175.12, with its highest calendar year share price at $164.36 in April.

Can the company return to these highs?

Its results look promising.

First quarter results

Revenue for the vitamin stalwart has increased 15% on the previous corresponding period to $154 million, with a 7% climb in first quarter NPAT to $16.5 million.

EBITDA rose 11% to $27.05 million while Blackmores celebrated plenty of global successes, including 30% in-country sales growth for China, 59% for Hong Kong, 76% for Korea and 115% for Indonesia.

Blackmores is confident its Asian operations will continue to grow, with China e-commerce and traditional retail sales expected to come in strong for FY19.

Fundamentals

In the past year, Blackmores reported $601 million in group revenue, a rise of 7% on the previous year, with group NPAT up 19% to $70 million and an easing of supply constraints.

Blackmores is preparing to take ownership of the Braeside manufacturing plant by October 2019, has appointed a Chinese ambassador to help grow its offshore business and will shortly commence medicinal cannabis trials.

The company’s balance sheet is robust, with low interest and finance costs and net cash inflows from operating activities up 27% in FY18 to $58 million with net debt at a 20% gearing ratio and a dividend payout ratio of 75%.

While Blackmores is certainly not a “cheap” share, there should be some upside to its current price with shareholders no doubt hoping it finishes off the 2018 calendar year at a similar point to where it was at the same time in 2017 – although this is unlikely to come to fruition it should finish higher than it is today.

Foolish Takeaway

While most of us balk at paying upwards of $100 for a single share, Blackmores appears to be making good ground in Asia and if its operations continue to boom in China, in particular, the 2019 calendar year could bring good things for the Blackmores share price and current lows are unlikely to stick around for long.

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Motley Fool contributor Carin Pickworth has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of and has recommended Blackmores Limited. The Motley Fool Australia has recommended Cochlear Ltd. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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