Transcription of Finance News Network interview with Blackmores (ASX:BKL) chief executive officer, Christine HolgateClive Tompkins: Hello Clive Tompkins reporting for the Finance News Network. Joining me from Blackmores
(ASX:BKL) for its First Quarter 2012 results is CEO, Christine Holgate. Christine welcome back. Sales were a record 66.6 million up 10 per cent on the same time last year. What was net profit after tax?
Christine Holgate: Net profit was 7.8 million, that’s in line with last year which was actually one of our record quarters for profit. So we’re really pleased with that because this has been a period of quite significant investment in marketing for us. It was a record quarter for us in sales; it was up actually from our previous record quarter, up seven per cent from that. So it’s got really good momentum and I think it’s a really solid start for the year. We did just under seven per cent growth here in Australia in the Quarter. I think that’s a very good result when you consider many retailers are coming out this week with negative growth in the Quarter. And in Asia we did 20 per cent growth, 37 per cent in constant currencies.
Clive Tompkins: So Christine the record sales can be attributed to an increase in marketing and promotion and new product launches. Is there anything else you attribute it to?
Christine Holgate: No. Our growth really has come from an investment in marketing, both here and in Asia. We’ve clearly done some strong
promotional activity here in Australia too, with Woolworths one of our bigger grocery customers, but we’ve also launched a lot of new products.
One of the most exciting products is our first registered product and that’s a purely natural alternative to Voltaren. It’s a therapeutic cream called Flexagil. A new multivitamin which has got a whole food ingredient like a spirulina, it’s called a nutrimulti and a really exciting new weight range with a combination of powders and shakes. Weight loss tablets, detox programs and all us girls at the office are getting quite excited about it.
For Asia it’s a continuing of the momentum, new products, improved marketing and we’re really looking forward to this winter season.
Clive Tompkins: Now Christine we’ve all seen footage of Bangkok underwater over the last couple of weeks. Given the importance of Thailand, what impact will the disruption have on sales?
Christine Holgate: Well we’ve had the Thai floods for a few weeks now and so far sales have really held up. The Thai people are enormously resilient and you will recall, probably 18 months ago now, that we had the riots in Thailand and sales held up through those. At this moment in time you’re probably also aware that the Government’s called an extended public holiday over the weekends. Actually many of my staff are still working, my sales director wrote to me last night. So at this moment, we haven’t really seen that impact come through, but we are watching the situation very carefully. We do have some of our staff members who have lost their homes, we’re helping those staff members but all our staff are safe and at this moment in time, our sales are safe too.
Clive Tompkins: And perversely do you think the threat to public health might actually see an increase in sales of supplements and vitamins?
Christine Holgate: It may do because clearly after flooding there’s often a lot of spread of disease. But at Blackmores at the moment, what we’re trying to do is actually look at making some generous donations to Thailand, to charities to help those people offer important vitamins and supplements such as probiotic stress tablets and immunity products. And I think that’s very important too at this moment of real stress for people in Thailand, is actually to help and payback into that community that’s supported Blackmores for a long period of time.
Clive Tompkins: And Christine last time you were here you mentioned the tremendous success that you had in Korea. Can you give us an update on that market?
Christine Holgate: Look I was in Korea, Clive, just two weeks ago and we launched our third product, which is called Super Joint Omega. And that product is only available in Korea and I’m very pleased to say first share went very well and we over achieved target. We now have really launched a number of products with CJO, we’re now also moving also into department stores and into pharmacy and independent stores in Korea. So apart from our original approach which is the television shopping network, we are now moving into stores as well. And I think that’s important for the longevity of our business in Korea, but it’s going very well at the moment. We’re really looking forward to a winter season, that’s where people take their fish oil, so keep your fingers crossed but Super Joint Omega, here we come.
Clive Tompkins: Christine this first quarter’s been a record. How do you see the next quarter shaping up?
Christine Holgate: I don’t know so much about quarter two, but if we look out for the whole nine months of the rest of the year, because really as a CEO you should run your business slightly longer time pattern. Look I’m very cognisant, we’ve had this awesome start, we’ve got great products, a really strong team and you know, we would have Korea for a whole year this year. But on the back of that I am worried about the Australian retail environment. I am worried that a lot of retailers are actually forecasting negative growth for the year here in Australia. So that does keep me awake at night because I can’t influence that decision and clearly, we’re watching the situation in Thailand very closely with the floods. But at this moment in time, it’s a really strong start to the year and it’s a solid performance. And you know we’re still working hard Clive, to give you that 10th year of profit and sales growth for you.
Clive Tompkins: Christine Holgate thanks again for the update.
Christine Holgate: Thank you.
ENDS
