The Blackmores Limited (ASX: BKL) share price will be one to watch this morning following the release of its annual general meeting update.
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What was in Blackmores' update?
As well as providing investors with a summary on how the health supplements company performed in FY 2020, management revealed its expectations for the current financial year.
According to the release, while no specific full year profit guidance has been given, it is anticipating full year profit growth in FY 2021. This is despite additional cost variances arising from Braeside manufacturing ownership in the first half of the year.
Though, management has warned that its profit growth will come predominantly from the second half of the financial year.
Looking beyond FY 2021, management notes that it has confidence in its renewed strategy and expects it to put the company back on a path to sustainable, profitable growth and in a position to restore future dividends.
No real update was given for its performance in the first quarter of the year. Though, management did advise that it has completed its restructuring, which is set to deliver $15 million of gross annualised savings from the second half.
It has also initiated a Leading Value Position (LVP) savings program, which will contribute to cost of goods sold savings of $10 million in FY 2021.
Global Therapeutics divestment.
In a separate announcement, Blackmores has revealed an agreement to sell its Global Therapeutics business to McPherson's Ltd (ASX: MCP) for $27 million.
Chief Executive Officer, Alastair Symington, commented: "Fusion Health and Oriental Botanicals are wonderful brands which play an important role in the health and wellness routine of many Australians. While we have decided that Global Therapeutics is no longer part of of our strategic priorities, I want to acknowledge the unique value of these brands and believe Global Therapeutics will now have an opportunity to reach its true potential with McPherson's."
The transaction is scheduled for completion on 30 November. It remains subject to conditions in relation to the transfer of a minimum number of employees and material contracts and there being no material adverse change to the business.
