Shares in vitamin and supplement maker, Blackmores, have jumped more than seven per cent after the company announced a record annual profit.
Blackmores’ net profit surged 83 per cent to $46.6 million on the back of frenzied development of its Asian division, where sales increased 26 per cent.
The result pleased investors, with the company’s shares surging by $6.04, or 7.2 per cent, to $90.44.
Sales to China, where the brand is endorsed by retired tennis champion Li Na, skyrocketed to $75 million in the year to June 30 from just $2 million the previous year.
The opening of free trade zones in China last year allowed Blackmores to sell its products to Chinese consumers, although only via an e-commerce platform.
“It really opens up the opportunity for the Chinese consumer to buy a whole range of Blackmores products and for us to offer them,” Blackmores CEO, Christine Holgate told AAP.
Sales in its Australian-based operations were up 43 per cent, a result Holgate attributed to increased demand for vitamins from Chinese tourists in Australia, the nation’s ageing population and more investment in branding and research.
“A lot of retailers have clearly got some challenges at the moment, so we’re very pleased with that result,” Holgate said.
But the company’s record growth has a downside as it struggles to source enough raw materials to keep up with demand for its products.
“Our growth has put constraints on the availability of raw materials because Blackmores has very high quality standards,” Holgate said.
“We’ve been working very closely with suppliers, investing in capacities and finding new sources which meet our quality standards.”
Holgate is expecting more profit increases in the year ahead on the back of further growth locally and in Asia, as well as in its non-core asset BioCeuticals.
“There’s really strong demand for Australian products in Asia and I think the government is supportive of helping businesses build trade overseas, so I’m quite optimistic about that,” she said.