Blackmores has pruned its final dividend after reporting a sharp drop in earnings for the year to June.
The company revealed on Tuesday a 41% fall in net profit $59 million in the year ended June 30, 2017, a slide which saw a sharp cutback in dividend.
The final was slashed back to $1.40 a share from $2.10 a year earlier.
That saw the full year payout cut 34% to $2.70 a share from $4.10 in 2015-16.
The shares ended at $97.99, up 7.4%, but a long away from the $220 all time high hit in January 2016.
The big dip in profits means that new chief executive Richard Henfrey faces a much harder road as he takes over from long-serving boss Christine Holgate who is off to run Australia Post.
Sales revenue slipped by 3% to $692.8 million, indicating that profit margins were crimped in the year.
The reason for the downturn is easy to see – the ending of the hordes pf Chinese tourists and entrepreneurs buying up vitamins in Australia instead of in China and shipping them back to China. That slashes sales and margins.
The Blackmores Australasian business bore the brunt of this pullback by Chinese tourists and entrepreneurs, with sales down 23% to $372 million.
Ms Holgate said in yesterday’s statement
"We finished the year in a stronger position than we entered it. We have changed our expense structure to reflect a different trading environment and maintained investments in core future growth platforms; we have made appropriate provisions to protect us in future years and, with tight management of our inventory and cash, we exited the year with a strong balance sheet.”
“The demand for Blackmores products in China remained strong throughout the year although the route to serve it has changed significantly," she said.
Direct sales to China for fiscal 2017 rose 71% to $132 million. When sales via Australian retailers are included, Blackmores estimates that China accounted for about $250 million of total sales of $692 million in 2016-17.
