What to expect from the Blackmores (ASX:BKL) half year result

The Blackmores Limited (ASX:BKL) share price will be on watch this month when it releases its half year results. Here’s what to expect…

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Earlier today I had a look at what the market was expecting from the A2 Milk Company Ltd (ASX: A2M) half year result later this month. You can read about that here.

On this occasion, I’m going to turn by attention to fellow consumer staples stock, Blackmores Limited (ASX: BKL).

What is the market expecting from the Blackmores half year result?

According to a note out of Goldman Sachs, its analysts are expecting Blackmores to reveal an improvement in its performance compared to the prior corresponding period.

The broker is expecting the health supplements company to report revenue of $318.2 million. This will be a 7.9% increase on the same period last year. It is also 2.3% ahead of the market consensus estimate.

This is expected to be driven by sales growth in China, the International segment, and its BioCeuticals business. Goldman is forecasting a 10% increase in constant currency China sales to $66.7 million, a 23% lift in International sales to $84.2 million, and a 10% improvement in BioCeuticals sales to $54.1 million.

It expects this to offset a weaker performance in the ANZ segment. Goldman is forecasting the company’s largest segment to post a 2% decline in sales to $113.2 million.

Due to margin compression in the ANZ and China segment, the broker anticipates Blackmores reporting flat half year earnings before interest and tax of $27.8 million.

However, thanks partly to lower interest expense, it is forecasting a 2.3% improvement in its underlying net profit after tax to $18.1 million.

Pleasingly, with the broker expecting Blackmores operating cash flow to come in at $33.8 million, it believes it will be in a position to resume dividend payments. The broker has forecast an interim dividend of 46.8 cents per share.

Is the Blackmores share price in the buy zone?

As with A2 Milk shares, Goldman is sitting on the fence with this one.

The note reveals that its analysts have a neutral rating and $77.30 price target on the company’s shares. This compares to the latest Blackmores share price of $76.30.

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Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of and has recommended A2 Milk and Blackmores Limited. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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