Financial Analysis Report Of Blackmores: Contingent Liabilities

About Blackmores Industry

Discuss about the Report for Financial Analysis of Blackmores of Contingent Liabilities.

Blackmore’s industry was formed 80 years ago in Queensland by Maurice Blackmore. Mr. Maurice Blackmore was very much passionate about the natural healthcare and that passion or interest is continued in today’s world also by his son Marcus Blackmore under his chairmanship. Vitamin supplements, minerals, herb and nutrients are offers to customers and the customers consumes it which is turned into natural remedies in order to take care of their health and wellbeing. This industry has been extent at a large scale in Australia, New Zealand and Asia. This industry provides a job to 600 people or even more than that. The Blackmore’s industry had been listed publicly in 1985.

The strategy for the growth of the company is to create the channels for business, business acquisition and additional extension in the Asia and New Zealand and now the target in order to enlarge the industry is China. China is expected to brought a major changes in the business at a large level.

Blackmore’s ltd. has been honoured by its values and for quality range products. The values which have been adopted by Blackmore’s ltd. are:

The Blackmore’s inspired from the natural and holistic approach and believe in that approaches which forward their work in this field about everything they do in their business.

The Blackmore’s industry is honest about the products they create for the customers and promised about the standard quality and have the professionalism about their work.

In the Blackmore’s industry all are treated with the dignity and have pride and honoured by each other with the excellance of their work performed within the industry.

In Blackmore’s industry, the persons working in the team or perform as an individual, the company motivate each and every persons to do their best performance in the industry according to their skills and knowledge they have acquired.

They actually offers that product or create that product which is beneficial to the customers and the environment without harming the surroundings. They actually concern about the environment and that the reason for their sustainability in the market.

The natural health and wellbeing industry are growing in a global industry and the demands are going upwards.

Blackmore’s are working with the heart research institute from 1993. At the time of this period, Blackmore’s increases the extraordinary about $1million and in the history of HRI; it has played the most important role.

Blackmores and Blackmores Institute

The chairman of the board of governors of HRI was Marcus Blackmore from 2004 till 2006. His vision was to make a big change in the business and carry forward at a international level. Marcus Blackmore had been prestige by the extraordinary contribution to HRI and the talented researcher has been brought from Europe to work with the company.

Blackmore’s sponsored the annual illuminate gala dinner, in which the company celebrate the achievement which they have acquired from the researchers and show that research to their supporters.

The Blackmore’s and the HRI both are supported by each other and both have the same promises in order to help people so that they can stay healthy. They actually courage people to take care of themselves and invest for their health and understand the main reason for the cardiovascular disease.

Blackmore’s has been honored from Australian packaging covenant awards for medium pharmacy and personal care category. Blackmore’s has been prestige for the achievement of the reduction of affect on environment for the packaging. The company focuses on day-to-day improvements. Richard Henfrey, the chief operating officer of the company has appreciated the work of the suppliers of the natural health company and for the support of the retailers for the reduction of the affect of packaging of the product and also for taking the innovative solution. Their biggest achievement for the year was starting the ‘closed loop ‘process for the delivery of the packaging facility.

The sales of the Blackmore’s has been increased by 22% and came to $206.4million from the previous year.
The company also earns more profit and has been increased profit by 54% and become $18.6million.
Interim dividend also increased by 55% and came to 68 cents per share which is fully franked.
Dividend reinvestment plan has been removed by the directors.
The working capital also increased by 118% as compared to previous year and become $29million and cash conversion has also increased by 118%.

For this record which company has achieved, in that achievement the chief executive officer of the Blackmore’s company had said that the achievement is possible with the help of all brands and products which actually made that achievement possible and make them even stronger. Moreover they delivered products with the avoidance of their stategies which they have adopted like to focus on consumer and their taste and develop the business of Australia and the investment is done for the growth of Asia’a business and have the knowledge about the leverage which is acquired from Blackmore’s institute and develop the changes which is required in the products of Blackmore’s in order to create new things and innovations to attract the customers and also do operations in a effective way.

Earnings before interest and tax has been rises by 50% and become $28.2million as compared to the previous year. With the help of greater sales and company has the concentration on the cash management net debt has been decreased from $54.4million and become $36.7 million which helps to prepared the strong balance sheet of the company.

Event Sponsorship

The sales of the Bioceuticals has been increased by the 17% and the earnings before interest and tax of the bioceuticals has rised by 40% as compared to corresponding prior year, which described about the importance of the quality of products and maintain that at a high level and depend on the evidence for the practitioners. The bioceuticals has performed so well from acquisition in June 2012 that the company encouraged itself for the further growth and development of the business.

The sales of the Blackmore’s for Australian business was increased by 29% with the help of highest sales of pharmacy and the increasing rate of demand of the products of Blackmore’s from the chinese consumers. This encouraged the Blackmore’s industry for the further growth and development of the Asian’s business. With the growth of the Blackmore’s industry and the importance of the delivery of operational benefits, the business of the Australia has increases the earnings before tax and interest by 61% as compared to previous year.

The business of Blackmore’s in Asia has increases the sales by 5% and decreses the earnings before tax and interest by 15% has been delivered in order to describe the challenges of retail in Thailand. But the business in Malaysia has increases the sales of the Blackmore’s by 17% and create a new record for the industry. The Blackmore’s has the best plan about the sales and marketing for the Thailand business of the year which encouraged the company in that market at the medium level.

The china business of Blackmore’s industry is the fully-owned enterprises which supports the current growth of that region. The china business has opened the free trade zone in November at the previous year which will help to grow the Blackmore’s industry at a large extent and the Blackmore’s have the license which is fully safe and secured in order to trade in that zone.

Blackmore’s has create the site as a name Blackmores.com.au which is the opportunity for the customers and offer them the huge range of products and to buy that product online easily. Blackmore’s has developed in the market and improved their operation for the customer and also prestige by the worldstar packaging award which is the most important for global packaging industry. The innovations which had been created by the Blackmore’s for the design, for this innovations Blackmore’s has also honoured by the gold, silver and bronz medals at the Australian packaging design awards in three categories.

Core Business Alignment

The significance of the complementary medicines has determined by the Australian Parliament to the international health landscape and recognised the achievements of the National Institute of the complementary medicines with the name of Australia’s premier research facility in the complementary medicines. This is very important for the NICM to identify the Blackmore’s institute as the key collaborator.

Blackmore’s has faces the challenge to fulfill their commitment about the quality and to fulfill the demand of the customers. So now they start making new and more products with the best quality with the help of the suppliers. The Blackmore’s had prestige their partners of the business with the annual supplier awards. The company also appreciate that persons also which have their contribution for the growth and development of the business by offer them the premiun product. The blackmore’s also honoured by the sustainability award by their control on the operation which affect the environment. They have also honoured by the outstanding focus on quality by maintaining their level of quality at high level. The Blackmore’s have no limit in order to improve the product and offers the advantages to the retailers and the customers.

In the year 2016, Blackmore’s has been honoured by the best employers of the Australia awarded by the Aon best employers awards. Blackmore’s also achieved the global therapeutics which is the chinese herbal medicines which leads to Australia and involves fusion health and oriental botanicals. Blackmore’s take part in the activities which has the large range which is done in the china at the Australia week. Blackmore’s had finance the Australian open and running it successfully. Blackmore’s launch the infant nutrition when the company has the partnership along with the chief executive officer Christein Holgate and the executive chairman of the Bega Barry Irvin and the trade minister Hon Andrew Robb AO and the tennis star of the china and the global ambasseder Li Na.

In 2015, Blackmore’s had been recognised with the name ‘the readers digest most trusted brand’ in the field of vitamins and supplements category offered to the company was awarded in the Australia. Blackmore’s also prestige by the National Export Award and also for the Australian packaging convenant high performer award.

Blackmore’s has innovate the first Australian flagship store which brought life in the human being and it is that platform which motivates the human to live the healthy life in a normal way. The chief executive officer of the Blackmore’s Christine Holgate has been honoured with the name ‘CEO of the year’. Christine Holgate is the first women who actually achieve this award from her deligence and smart working. She was also named in the top 100 women which influence the market of the Australia.

Highlights

Blackmore’s was the first company which adapt the Australian recycling label in gthe planet Ark. 4000 people and even more than that reach the Blackmore’s warriewood campus which were in the Sydney in order to do the activities like discussion about the health and go through the green living workshops in order to support the 25 local community organizations.

Blackmore’s also have the joint ventures with the Kalpe Pharma which is the biggest companies of the healthcare in South East Asia in order to provide facilities in the Indonesia market. The Blackmore’s also have the event of ‘translating research into practice’ which is sold for the general practice of pharmacy. The Blackmore’s also organize marathan for people among society and across 30000 people participate in that marathan. For this marathan, Blackmore’s make the bridge so that the people can run 9km and medibank family run 3.5km and earn $1.2 million which is going to charity. Blackmore’s also provide the animal health care to take care about the animal and provide them their parent which can give the trusted advice for their health. Blackmore’s also started the work in the night shift which is permanent with the help of production facility at the warriewood campus in order to meet the requirement of the stock demand at ahigh level.

statement of profit or loss and other comprehensive income
for the half year ended 31 December 2015
	2015	2014	2013
	$0	$0	$0
sales	341433	206361	169566
other income	567	369	956
revenue and other income	342000	206730	170522
promotional and other rebates	58038	37264	27675
raw material and consumables used	102123	63388	55607
employee benefit expenses	63229	44856	34833
selling and marketing expenses	23581	13971	15162
depreciation and amortization expenses	3471	3081	3110
operating lease rental expenses	2069	1652	1821
professional and consulting expenses	3583	3718	2125
repair and maintenance expenses	1804	1441	1425
freight expenses	5158	2925	2922
bank charges	1077	550	402
other expenses	8784	5676	6933
total expenses	272917	178522	151545
earnings before interest and tax	69083	28208	18977
interest revenue	182	212	138
interest expense	-979	-2410	-2623
net interest expense	-797	-2198	-2485
profit before tax	68286	26010	16492
income tax expense	-19982	-7395	-4380
profit for the period	48304	18615	12112
other comprehensive income
items that may be reclassified subsequently to profit or loss
exchange differences arising on translation of foreign controlled entities	-1082	3717	-234
net gain on hedging instruments entered into for cash flow hedges	746	166	376
income tax relating to components of other comprehensive income	-224	-50	-113
other comprehensive income for the period, net of tax	-560	3833	29
total comprehensive income for the period	47744	22448	12141
profit attributable to :
owners of the parent	48300	18615
non-controlling interests	4
	48304	18615
total comprehensive income attributable to
owners of the parent	47791	22448
non-controlling interests	-47
	47744	22448
Earnings per share
basic earnings per share (cents)	280.4	108.4	71.2
diluted earnings per share (cents)	278.2	107.9	71.2

statement of financial position
as at 31 December 2015
	2015	2014	2013
	$0	$0	$0
Assets
current assets
cash and cash equivalent	42861	26279	10746
receivables	114980	81772	66909
inventories	57039	38125	39577
other assets	3475	3663	4000
total current assets	218355	149839	121232
Non-current assets
property, plant and equipment	65124	61862	64449
investment property	2160	2160	2160
other intangible assets	18340	18775	18486
Goodwill	18863	16863	16863
deferred tax assets	5847	3589	3201
other financial assets	581	498	439
total non-current assets	108915	103747	105598
total assets	327270	253586	226830
liabilities
current liabilities
trade and other payable	125789	62981	40722
current tax liabilities	11105	4195
provisions	6979	5733	5197
other financial liabilities	7	587	744
total current liabilities	143880	73433	46663
Non-current liabilities
interest-bearing liabilities	20000	63000	81000
provisions	784	691	696
other financial liabilities	1052		235
other liabilities	108	221	232
total non-current liabilities	21944	63912	82163
total liabilities	165824	137345	128826
net assets	161446	116241	98004
Equity
issued capital	37753	37753	32896
reserves	9294	7581	4423
retained earnings	112145	70907	60685
Equity attributable to shareholders of Blackmore’s ltd	159192
attributable to non-controlling interests	2254
total equity	161446	116241	98004

statement of cash flow
for the half-year ended 31 December 2015
	2015	2014	2013
	$0	$0	$0
cash flow from operating activities
receipts from customers	366938	217043	183722
payments to suppliers and employees	-285497	-179986	-163995
cash generated from operations	81441	37057	19727
interest and other costs of finance paid	-979	-2410	-2623
income tax paid	20508	-5855	-3899
net cash flow from operating activities	59954	28792	13206
cash flow from investing activities
interest received	182	212	138
payments for property, plant and equipments and other intangible assets	-8046	-1780	-1728
proceeds from disposal of property, plant and equipment	22	89	27
dividend received	25		7
payments for acquisition of investment			-713
net cash used in investing activities	-7817	-1479	-2269
cash flow from financing activities
net repayment of borrowings	-24000	-10000	-6006
dividend paid	-23254	-10954	-12188
proceeds from issue of share capital to non-controlling interests	2301
net cash used in financing activities	44953	-20954	-18194
net increase in cash and cash equivalents	7184	6359	-7258
cash and cash equivalents at the beginning of the half year	36931	18599	17963
effects of exchange rate changes on the balance of cash held in foreign currencies	-1254	1321	41
cash and cash equivalents at the end of the half-year	42861	26279	10746

	2015	2014	2013
ROA	14.59%	8.85%	5.35%
net profit margin	14.15%	9.02%	7.14%
current ratio	1.51761885	2.040486	2.598033
quick ratio	218354.604	149838.5	121231.2

debt to equity ratio	1.02711743	1.181554	1.314497
equity ratio	0.49331133	0.458389	0.432059
EPS	280.4	108.4	71.2

General information

Blackmore’s is the public company which is listed in the Australian securities exchange which is included in Australia, Asia and New Zealand. They do activities like sales and marketing of health products for all the common people and animals also.

Reporting entity

Blackmore’s ltd is the residence company of Australia. The financial statements of the company for the year 2013-14-15, consists of Blackmore’s ltd and its subsidiaries.

Statement of compliance

The preparation of financial report has been made according to the corporation act 2001 and AASB 134 ‘interim financial report’ to make sure that the international financial reporting standards IAS 34 ‘interim financial reporting’ has been compliance.

Basis of preparation

The preparation of half-year financial report has been made which is based on the historical cost except those non-current assets and financial instrument which are taken at fair values. In the given exchange for assets the historical cost is depend on the fair value of the consideration. All the amounts are sown in Australian dollars.

Estimates

The requirement for preparing the half year financial report is about the management which can take actions and determine the impact of accounting policies and amount of assets and liabilities and income and expenses.

Segment information

The information is given to the group’s chief operating decision maker in order to allocate the resources and the segment is made on the performance which focuses on geographical regions.

Fair value of financial instruments

The amount of financial assets and financial liabilities is carried forward at depreciated cost from the fair value.

In order to determine the fair value of financial assets and financial liabilities with the applied terms and condition is based on the quoted market price.

The calculation of fair value of derivative instruments is done by using quoted price. If the quoted price is not given than the discounted cash flow analysis is done.

To estimate the fair value of financial assets and financial liabilities is also done according to the pricing model which is depend on the discounted cash flow analysis.

At the end of the year 2015, the company has the joint venture with Kalbe Formain order to have the entry in Indonesia market. This joint venture is actually about the result and is known as Kalbe Blackmore’s nutrition.

The directors believe that there are no contingent liabilities at the end of the year 2015.

Conclusion

The Blackmore’s ltd has a good position in the market. This company is financially strong. As it has been shown in the report that the profit is increasing from 2013 till 2015 which means that company has also earnings profits and maintain all the debts which means it has the reputation in the market as they are concerned about the people health and their wellbeing. The sales also increasing by 22% and up to $206.4 million from previous year. This offered a net profit after tax of the year for the prior six months is about $18.6million which is also increased from previous year.

References

HRI.(2016).Blackmore’s and Blackmore’s institute. Retrieved on 24 august 2016 from https://www.hri.org.au/get-involved/become-a-corporate-partner/blackmores

Blackmore’s.ltd (2014).Blackmore’s export success. Retrieved on 24 august 2016 from https://medianet.com.au/releases/release-details?id=799631

Porter, s. (2016) Blackmore’s case study

Blackmore’s.(2016).business and management. Retrieved on 24 august 2016 from https://www.termpaperwarehouse.com/essay-on/Blackmores/406239

Blackmore’s. (2015).financial reports .Retrieved on 24 august 2016 from file:///C:/Users/Guest/Downloads/Financial%20Report%20Half%20Year%20%202015%20(1).pdf

Blackmore’s.(2014).financial reports. Retrieved on 24 august 2016 from file:///C:/Users/Guest/Downloads/Financial%20Report%20Half%20Year%20%202014%20(2).pdf

Blackmore’s.(2014).Blackmore’s recognized for performance in packaging sustainability. Retrieved on 24 august 2016 from

https://www.blackmores.com.au/about-us/media-centre-old/media-releases/blackmores-recognised-for-performance-in-packaging-sustainability

Blackmore’s.(2014).over 80years of Blackmore’s.Retrieved on 24 august 2016 from https://www.blackmores.com.au/about-us/company-information/heritage-and-timeline

Blackmore’s.(2016).Blackmore’s 2016 supplier of the year awards.retrieved on 24 august 2016 from

https://www.blackmores.com.au/supplier-of-the-year-awards

Blackmore’s.(2014).Blackmore’s campus.Retrieved on 24 august 2016 from https://www.blackmores.com.au/about-us/company-information/blackmores-campus

Return on assets=net income/total assets

Net profit margin=net profit/total sale or revenue

Quick ratio = current assets- stock/current liabilities

Debt to equity ratio=total liabilities/total equity

Equity ratio=total equity/total assets

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