Blackmores’ Shares Tumbled on ASX after Announcing the Resignation of its CEO

Australia’s leading natural health company, Blackmores Limited (ASX:BKL) has announced the resignation of its Chief Executive Officer (CEO), Mr. Richard Henfrey. Following this news, the share price of the company decreased by 3.918% as on 26 February 2019.

Mr. Richard has Joined the Company in April 2009, and he was appointed Chief Executive Officer (CEO) on 17 August 2017.

While commenting on the resignation of Mr. Richard Henfrey, the company’s Chairman Brent Wallace thanked Richard Henfrey for his service and leadership of the Group over the last 18 months. He also thanked him for his strong commitment to Blackmores, the industry and the company’s stakeholders over his decade long tenure.

The company recently released its half-year results for FY19. For the half-year period, the company reported revenue of $319 million, up 11% compared to the prior corresponding period (pcp), delivering a profit of $34 million and in line with the prior corresponding period.

The company’s revenue in Australia and New Zealand increased by 19% to $144 million in 1H FY19, driven by domestic growth and continued increased levels of sales through Australian retailers who are focused on servicing China export channels.

During the half year period, the company completed the acquisition of Impromy – an evidence-based weight management program developed in collaboration with the CSIRO.

The company’s balance sheet remained in a strong position at the end of the first half, with cash generated from operations of $34m representing a 22% increase compared to pcp. The company's cash conversion ratio also improved to 60%, up from 52% in pcp. The company reported a Net debt of $71 million in 1H FY19, representing increases in the period to fund the acquisition of Impromy and higher working capital.

The company’s Board has declared an interim dividend of 150 cents per share, fully franked with a record date of 5 March 2019 and Payment Date of 20 March 2019.

While providing the outlook, the company informed that its China sales in Q3 FY19 are getting impacted due to the changes to the way consumers purchase the company’s products. Further, the sales are also getting impacted due to higher inventory in the trade and a general softening of consumer sentiment, as a result, the company does not expect the second half profit performance to be ahead of the first half result.

Now, let’s have a glance at the company’s stock performance and the return it has posted over the last few months. The stock last traded at a price of $91.470, down by 3.918% during the day’s trade with a market capitalization of ~$1.65 Bn. The counter opened the day at $94.500, reached the day’s high of $94.5 and touched the day’s low of $90.560 with a daily volume of ~195,607. The stock has provided a year till date return of -24.00% & also posted returns of -34.46%, -24.91% & -27.34% over the past six months, three & one-months period respectively. It had a 52-week high price of $166.760 and touched 52 weeks low of $80.450, with an average volume of 65,199 approximately.

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