Blackmores has slashed its final dividend by 55 per cent in another blow to shareholders who have seen the stock fall by half in the past 18 months.
Shares in the vitamin and supplements maker were trading down 8.0 per cent at $76.39 at 1240 AEST, their lowest level since 2015 and down 54 per cent since the start of 2018.
Blackmores said on Thursday its profit in the 12 months to June 30 was down 23.6 per cent to $53.5 million and was likely to fall further in the six months to December 31.
The drop came despite an increase in sales as expenses grew faster than revenue.
Blackmores said that while sales to China fell 15 per cent to $122 million because of a new e-commerce law, overall revenue for the 12 months to June 30 was up one per cent to a record $610 million.
“Despite this, there’s no shying away from the fact that net profit for the full year does not reflect the level of top line sales that was achieved,” chairman Brent Wallace said.
“This is due to our operating expenses growing at a faster rate.”
Blackmores said it had eliminated about 40 roles as it tried to save $60 million over three years and management was exploring ways to accelerate the cost-cutting program.
The vitamin and supplement maker said profit should rebound in the second half of fiscal 2020 as a result of the streamlining.
Blackmores said sales to Asian countries other than China were up 30 per cent and Australia sales posted modest gains but key export accounts to China fell because of the country’s crackdown on personal shoppers known as daigou.
The new e-commerce laws, which took effect January 1, has cut into the daigou trade because it requires resellers get business licenses and pay taxes.
It has caused Chinese customers to shift to direct purchasing from local e-commerce platforms.
Blackmores said it was trying to adapt by building relationships with the cross-border e-commerce platforms but expected the challenging trading conditions in its channels to China to continue through the first half of FY20.
The company is considering entering the Indian market as well as bringing a cannabis product to market.
New chief executive Alastair Symington, a former Nestle, Gillette and Procter & Gamble executive, joins the company in September.