Shares to Buy Blackmores (BKL)

Blackmores BKL ASXBlackmores (BKL) is Australia’s leading natural health brand, providing natural health products such as men’s and women’s multivitamins.

BKL boasts the number one brand in Australia and Thailand, outperforming the market in all of its major territories. BKL’s products span Australia, Malaysia, Thailand, Singapore and Hong Kong.

BKL’s products are supported by the backing of healthcare professionals and key opinion leaders – making BKL the top brand used by GPs in Australia.

A strong year

For FY10, BKL delivered impressive results. Revenue increased 7% on the prior year to $215 million, whilst underlying earnings grew by 25%.

Net profit after tax (NPAT) of $24 million represented a 17% on-year increase, whilst EPS was up 15% on FY09.

BKL declared a final dividend of 70 cents, up 23% on FY09.

BKL noted that its underlying earnings increased significantly in a “year of investment”. The results were supported by the group growing its Asian business, leveraging operational efficiencies from a new facility, and driving innovation.

New products, higher profits

BKL excels in bringing new natural health products to the market that find immediate success amongst consumers and support amongst healthcare professionals, including GPs.

New products such as Everyday Stress Formula and Odourless Fish Oil + Vitamin D3 have proven popular in Australia over FY10 and coming into the new FY.

In Asia, the Omega range of concentrated fish oils in Hong Kong have become a success, as has Joint Formula in Singapore.

BKL released more than 80 new products in FY10, including a range of heart health products, Blackmores Sleep Sound, and Cold & Flu Day/Night.

BKL will be one of the stocks to watch in FY11, with its healthy pipeline including Everyday Stress in 1Q11 and two innovative probiotic products in 2Q11.

Earlier this month, BKL confirmed it was expanding its international presence further via a partnership with CJO Shopping, a major Korean home shopping network, incorporating TV, online and catalogue sales direct to consumers.

Continued strength

BKL’s most recent results – for 1Q11 – indicate the group’s ability to continue to grow revenue and profit, as well as capitalise on the company’s leading brand name.

Total sales for the quarter were $60.6 million, up 11% from the prior year’s first quarter.

Net profit after tax was $7.8 million, a 13% increase on 1Q10.


BKL is a unique healthcare sector player which offers natural alternatives to traditional medicine, capitalising on society’s trend towards more ‘natural’ health treatments.

The group anticipates modest profit growth in FY11, which should be easy to achieve given BKL’s expanded product range and growing footprint in Asia.

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