In the Asia Pacific it strengthened the business by increasing accessibility to brands in-store and online, but sales in America and Europe were hit by retailer closures and stock and supply chain issues.
Underlying earnings before interest, taxes, depreciation, and amortisation inched up 1.4 per cent to $11.7 million, while net profit more than doubled to $9.86 million. This included a one off payment of $5.8 million as part of the final sale to the sellers of the Andalou Naturals business.
The $626 million company declared a fully franked interim dividend of 1¢ cent per share, payable on April 15.
Sukin is the largest brand making up about 44 per cent of its group sales, which increased by 12 per cent in the half, driven by more distribution and new products.
Sales at its Andalou Naturals brand tumbled 18 per cent in the half due to lower foot traffic caused by the pandemic. Sales of the Mineral Fusion line – the number one cosmetics brand in the natural channel in the US – fell 5 per cent but are expected to improve with the introduction of Virtual Try-On and a big ecommerce push.
Revenue for digital retailer business Nourished Life jumped 18 per cent with basket size growing 22 per cent. BWX is increasing its focus on e-commerce, particularly to reach new consumers overseas. Ecommerce sales rose 260 per cent in the first half, reaching 28 per cent of total sales.
Chief executive David Fenlon said the first half financial outcome does not dampen the outlook.
“We are very confident about unlocking the $50 billion supermarket skincare business (long term),” he told investors.
“The Woolworths partnership will allow us to connect with even more consumers. Sales performance is trending closer to expected levels which puts us on a solid growth trajectory for the full year.”
Canaccord Genuity analyst Cameron Bell said BWX’s guidance for growth of at least 10 per cent translates to EBITDA of over $34 million. The company’s target for a 42 per cent increase in distribution in financial year 2022 is also a plus.
Under the agreement with IPO candidate Chemist Warehouse, BWX will become a platinum supplier in exchange for an initial equity stake of 0.6 per cent in BWX. This holding can increase over the next 33 months to 2.4 per cent of the BWX share capital, based on agreement of performance targets.
Jack Gance, Chemist Warehouse chairman and co-founder, said being a strategic partner of BWX means it can work to unlock growth both in Australia and in its extensive online channels and overseas markets.
“As the biggest retailer in the Health and Beauty market on Alibaba we can work more closely to help grow our strategic partners business in China,” he said.
In November BWX also penned a new deal in Europe after teaming with British-based e-commerce company The Hut Group. Its subsidiary will take over the distribution of BWX’s Sukin and Andalou Natural’s Brands in supermarkets, hypermarkets, drugstores and online retailers.
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