Blackmores gives staff six weeks' extra pay after profits rise

Blackmores CEO Christine Holgate says the profit-sharing scheme was a great motivator. Photo / AAP

Shares in vitamin and supplement maker Blackmores have jumped more than seven per cent after the company announced a record annual profit.

Blackmores' net profit surged 83 per cent to $46.6 million on the back of frenzied development of its Asian division, where sales increased 26 per cent.

The result pleased investors, with the company's shares surging by $6.04, or 7.2 per cent, to $90.44.

And that's good news for staff.

The company's chief executive, Christine Holgate, said most of her 900 employees had been given an extra six weeks' pay on the back of the surge.

The bonus is part of a profit-sharing scheme. Ms Holgate told the Fairfax Media 10 per cent of the profit was paid out to staffand said the scheme was a great motivator.

"It really aligns everyone, from the lady on the factory floor to the chief executive."

Sales to China, where the brand is endorsed by retired tennis champion Li Na, skyrocketed to $75 million in the year to June 30 from just $2 million the previous year.

The opening of free trade zones in China last year allowed Blackmores to sell its products to Chinese consumers, although only via an e-commerce platform.
"It really opens up the opportunity for the Chinese consumer to buy a whole range of Blackmores products and for us to offer them," Ms Holgate said.

Sales in its Australian-based operations were up 43 per cent, a result Ms Holgate attributed to increased demand for vitamins from Chinese tourists in Australia, the nation's ageing population and more investment in branding and research.

"A lot of retailers have clearly got some challenges at the moment, so we're very pleased with that result," Ms Holgate said.

But the company's record growth has a downside as it struggles to source enough raw materials to keep up with demand for its products.

"Our growth has put constraints on the availability of raw materials because Blackmores has very high quality standards," Ms Holgate said.

"We've been working very closely with suppliers, investing in capacities and finding new sources which meet our quality standards."

Ms Holgate is expecting more profit increases in the year ahead on the back of further growth locally and in Asia, as well as in its non-core asset BioCeuticals.

"There's really strong demand for Australian products in Asia and I think the government is supportive of helping businesses build trade overseas, so I'm quite optimistic about that," she said.