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Blackmores shares plunge as sales slow

AAP logoAAP 24/08/2016 Stuart Condie

Blackmores shares have taken their biggest ever one day fall after the vitamin and health product supplier gave the first hint that its astronomical growth of the past two years is slowing.

Annual profit more than doubled to $100 million and Blackmores boosted its final dividend to $2.10, but the company said the first quarter of the 2016/17 year will be weaker than the prior corresponding period.

"The Australian wholesale market is volatile and has softened in recent weeks impacted by retailers de-stocking and some exporters changing the channels through which they acquire products," chief executive Christine Holgate said.

"We expect sales will improve as the year progresses."

Blackmores shares dropped $31.35, or 19.5 per cent, to $129.50.

That's a 41 per cent drop from the all-time high of $220.90 the stock hit in January, and a bigger one-day decline than its previous record of 13.2 per cent, on April 11.

Even so, the stock is still worth more than four times what it was two years ago.

Blackmores doubled its production capacity in the 12 months to June 30 as in-country sales to China rose more than sixfold from $7.55 million in 2014/15 to $48 million.

The brand's popularity with Chinese consumers is even greater than those figures suggest, with Blackmores estimating that more than $200 million of its total $717 million sales came from the so-called Daigou trade of people sending or carrying products back home to China.

That appetite helped lift sales from Blackmores' Australian business 56 per cent to $495 million.

Ms Holgate's reward for Blackmores' improved performance was a 60 per cent increase in total pay to $1.95 million, largely due to a near doubling of her short-term incentives and profit share to $1.04 million.

TOURISTS BOLSTER BLACKMORES

* Net profit of $100m v $46.6m

* Sales revenue up 52pct to $717m

* Final dividend up 75 cents to $2.10, fully franked

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