Vitamin company Blackmores has scrapped its interim dividend and slashed its full-year profit guidance, blaming it on adverse costs and the coronavirus outbreak.
Blackmores has told shareholders it now expects a full-year net profit to be between $17 million and $21 million.
The company reported full-year net profit of $53 million, down 24 per cent on prior year, for the fiscal year ending June 30, 2019.
They expect at least two to three months of challenges to its China sales and supply due to the coronavirus outbreak, the company says in an update to the market.
But the result will also be affected by its transition to manufacturing in the second half, with about $13 million in adverse costs expected.
In light of the significant deterioration in the outlook for the second half, the board has decided not to pay an interim dividend to conserve cash for operations, Blackmores says.
Chairman Brent Wallace says the board understands shareholders will be “bitterly disappointed” with the unsatisfactory results.
Chief executive Alastair Symington says that despite the challenges in the second half, the board and new management team are very confident and optimistic about the company’s future.
Blackmores’ brand metrics are the strongest they have been for many years, he says.
“We have the number one market position in Australia and a number of Asian markets, and we are quickly building a much stronger team in China,” Mr Symington said in the update.
The company’s shares went into a trading halt on Monday ahead of Wednesday’s update to the market. That has now lifted.
The shares last traded at $89.44.