‘Ongoing uncertainty’: Blackmores (ASX:BKL) share price falls 6% on cloudy future

Uncertain times overshadow Blackmores half year of growth…

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Key points

  • The Blackmores share price is down 6.2% today after releasing its half-year results for FY22 
  • Revenue, earnings, and dividends have improved year on year 
  • A lack of guidance might have shareholders unsettled 

The Blackmores Ltd (ASX: BKL) share price is failing to attract buyers following the release of its first-half results for FY22.

At the time of writing, shares in the health supplement company are swapping hands for $86.93 apiece, down 6.2%.

Blackmores share price uninspired by positive performance

  • Group revenue up 14.3% on prior corresponding period to $346 million
  • Gross profit up 19.4% to $187.6 million with a margin improvement of 2.3 points
  • Underlying EBIT of $38.3 million, reflecting an increase of 21.2%
  • Underlying net profit after tax (NPAT) of $20.8 million, up 9.6% year on year
  • Fully franked interim dividend of 63 cents per share, up 117% year on year

What else happened during the first half?

The Blackmores share price is firmly in the red on Thursday despite its improving figures for the six-month period. During the first half of FY22, the company achieved revenue growth when viewed at a group level. However, the results were more mixed when looking at the granular details.

For example, the international segment of the business — including Indonesia, Thailand, and India — delivered a 49.8% increase in revenue, hitting $116.2 million. In contrast, revenue across the Australia and New Zealand (ANZ) segment suffered a 1.2% fall to $145.9 million.

Although, the company’s China operations experienced an 8.5% lift in revenue. This was driven by growth in Blackmore’s direct cross-border e-commerce channel, which now accounts for 70% of sales in the China segment.

Inflation worries could also be playing into the Blackmores share price. During the half, the company managed to implement price increases across its various segments.

In China, an average increase of 3% was applied, while the international segment experienced greater increases. Meanwhile, only a 0.5% increase was successfully implemented for ANZ, reflecting the more competitive market.

What did management say?

Discussing how the company is positioning for the next half, Blackmores chief executive officer, Alastair Symington said:

While the first half results are pleasing, we continue to face significant challenges linked to global supply chain disruption and uncertainty due to COVID-19 outbreaks which has affected traditional retail channels and impacted consumer behaviour across all our markets.

Adding:


For the remainder of the financial year, we continue to be focused on delivering against our strategic game plan while maintaining a disciplined risk and capital management approach. In doing so, we are positioned to navigate through the challenges and capitalise on the opportunities that will arise.

What’s next?

Conveying a cloudy outlook, ASX-listed Blackmores did not provide any earnings guidance for the second half. Though, it does expect operations to continue slowly recovering in Australia. Accompanying this slow growth will be a ‘step up’ in brand advertising across the region.

Nonetheless, the company cites ‘ungoing uncertainty’ caused by COVID-19 as the reason for its inability to provide guidance.

On a positive note, shareholders can expect to receive a dividend payment on 12 April 2022.

Blackmores share price snapshot

The past year has had its ups and downs for the Blackmores share price — swaying from as low as $63 to as high as $104. But for those investors willing to hold on through it all, they have been rewarded with a return of 12.3%. For context, the S&P/ASX 200 Index (ASX: XJO) is only up 3.5% during this time.

Motley Fool contributor Mitchell Lawler has no position in any of the stocks mentioned. The Motley Fool Australia's parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has recommended 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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