Blackmores Limited (ASX: BKL) shares closed down 1.63% on Friday at $75.40.
With those losses factored in, Blackmores shares are now down 18.6% since the closing bell on 23 February. That was the day before the company released its half-year financial results for the six months ending 31 December.
That fall has come despite Blackmores reporting a 14.3% year-on-year lift in revenue, to $346 million, and upping its interim dividend by 117% to 63 cents per share.
ASX investors may have been selling Blackmores shares after the company declined to provide earnings guidance for the six months ahead, citing “ongoing uncertainty” caused by COVID-19.
But that’s not holding the company back from its ambitious growth plans.
How to reach out to a billion consumers
Blackmores is aiming to expand its reach to one billion unique consumers within five years. That’s up from 500 million today.
This doesn’t mean it’s expecting a billion customers, mind you. But rather a billion people who recognise it as a leading Aussie health product provider.
“If 1% of that billion converts into a sale for Blackmores, then that enables us to achieve our financial goals. If we can reach a billion consumers, we can be one of the biggest health natural health companies in Asia Pacific,” Blackmores CEO Alastair Symington said quoted by The Australian Financial Review.
So, how is the company planning to double its reach?
First, it’s targeting expansion in China, a core existing market, as well as its other high-growth international markets in Southeast Asia, including Indonesia and India.
While Chinese sanctions have hampered some Australian exporters, like those involved in the wine or coal industries, Symington doesn’t believe his company will become a target:
We don’t expect that there’ll be any of these tougher sanctions that would come on international health products that the Chinese people would be looking for. I think the only time that that could come is if there was a legitimate alternative locally that the consumers were as comfortable with, and we don’t see that yet.
Another growth pillar that could help propel Blackmores shares higher is pet health supplements, sold under the company’s Paw brand.
As COVID-19 restrictions are rolled back people are returning to onsite work, often for the first time in two years. That may come as a relief to some workers. But many of their pets, now accustomed to fulltime stay-at-home carers, won’t agree.
Enter Blackmores’ Complete Calm, intended, as the name implies, to calm your anxious dog down.
According to Symington (quoted by the AFR):
Just in the last month or so, everybody’s changed their habits and are moving back into commuting. These pet parents have been looking after their animals for two years. The new pets have not had a situation where the pet owners have been separated from them.
Symington said online inquiries regarding anxious pets have increased by 50% since the end of January.
Blackmores shares have struggled in 2022, down 17.5% since the opening bell on 4 January.
By comparison the S&P/ASX 200 Index (ASX: XJO) is down by around 4% year-to-date.
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