Blackmores shares have plunged despite the vitamin maker's 20 per cent half year profit growth, as investors reacted to a warning of a soft second half due to supply issues and a weaker Australian market.
The company lifted its dividend after making a net profit of $34.2 million in the six months to December 31, as revenue increased by nine per cent.
But revenue in Australia and New Zealand was slightly lower than a year ago as the broader consumer market remained subdued and China-influenced sales moved to its direct China channels, Blackmores said.
Sales in China grew 27 per cent driven by record sales from online promotional events, including Singles Day.
Blackmores shares dropped $23.50, or 14.7 per cent, to a four-month low of $136.00 as it warned supply issues and a soft Australian retail market would impact its performance in the second half.
Continuity of supply was challenged in the second quarter as suppliers struggled to respond to the company's increased demand, it said.
But the company said it was confident it will continue to deliver good profit growth for the full year.
Despite the strong sales growth, first-half profit from China grew just four per cent, weighed down by investments in resourcing, and costs associated with expanding the company's presence in the region.
The result was also impacted by a $2.8 million provision for doubtful debts in China, Blackmores said.
"All appropriate avenues to recover these debts are being progressed," the company said.
CHINA SALES GIVE BLACKMORES A BOOST:
* Net profit up 20pct to $34.2m
* Revenue up 9pct to $287.3m
* Fully franked interim dividend up 20 cents to $1.50
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