No final payout for shareholders from vitamins and health supplements company Blackmores which is looking to cut about 10% of its workforce after revealing a forecast slump in net profit for the year to June.
The Sydney based company said on Tuesday that statutory net profit fell 66% to $18.1 million for the 2019-20 financial year.
That will see the company not paying a final dividend to shareholders after omitting an interim payout. Last year, it paid a fully franked final dividend of 70 cents a share after an interim of $1.50 a share.
That will be a big hit to shareholders wallets as they miss out on a repeat of a payout of at least $2.20 a share for the year to June.
Directors said in Tuesday’s release “While our cash position and balance sheet is strong, the continued uncertainty in the current global climate underpins this decision.”
That helps explain why job cuts are in the offing.
Blackmores said on Tuesday that it started talks last week with staff in Australia and New Zealand about the changes. The cuts are part of the company’s organisational redesign as it seeks to streamline its operations, simplify its business and return to profitable growth (and of course, cut costs).
Excluding one-off costs, the company reported an underlying net profit of $18.7 million, which was in line with guidance.
CEO Alastair Symington said the company had made improvements during the year and had gained much greater visibility and control of fixed costs.
“We have finished the year with some very good results in our international markets with revenue up 30 percent on the prior year, BioCeuticals revenue up 7 percent, while Blackmores strengthened its leadership position in Australia with 16.4 percent share of the vitamin and dietary supplement market,” he said.
“This is despite the unprecedented disruption due to COVID-19 and highlights the strength of our brands in meeting consumer health needs,” he said.
Blackmores confirmed that the impact of COVID-19 increased sea and air freight and other costs by $7 million in the June half.
Despite the failure to pay dividends, the company though looks optimistic about the outlook, but still reluctant to provide any actual guidance.
Directors said the company expects “full-year profit growth in FY21.”
“This profit growth will come predominantly from the second half of the fiscal year, but given the many uncertainties associated with COVID-19 we are not providing full-year profit outlook for FY21.
“There is great confidence from the Board and Management that by implementing our strategic priorities, simplifying our operating model and delivering consumer-led innovation consistently it will put the company back on the path to sustainable, profitable growth and restore future dividends,” directors said.
The market wasn’t as confident and the shares 5.6% to $71.58.
