Financial Analysis of Blackmores Contingent Liabilities

Question: Discuss about the Report for Financial Analysis of Blackmores of Contingent Liabilities. Answer: Blackmores industry Blackmores 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 todays 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 Blackmores 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. Blackmores ltd. has been honoured by its values and for quality range products. The values which have been adopted by Blackmores ltd. are: Passionate about natural health The Blackmores 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. Integrity The Blackmores industry is honest about the products they create for the customers and promised about the standard quality and have the professionalism about their work. Respect In the Blackmores 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. Leadership In Blackmores 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. Social responsibility 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. Blackmores and Blackmores institute Blackmores are working with the heart research institute from 1993. At the time of this period, Blackmores increases the extraordinary about $1million and in the history of HRI; it has played the most important role. 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. Event sponsorship Blackmores 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. Core business alignment The Blackmores 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. Blackmores has been honored from Australian packaging covenant awards for medium pharmacy and personal care category. Blackmores 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. Highlights The sales of the Blackmores 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 Blackmores 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 Asiaa business and have the knowledge about the leverage which is acquired from Blackmores institute and develop the changes which is required in the products of Blackmores 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. 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 Blackmores 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 Blackmores from the chinese consumers. This encouraged the Blackmores industry for the further growth and development of the Asians business. With the growth of the Blackmores 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 Blackmores 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 Blackmores by 17% and create a new record for the industry. The Blackmores 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 Blackmores 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 Blackmores industry at a large extent and the Blackmores have the license which is fully safe and secured in order to trade in that zone. Blackmores 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. Blackmores 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 Blackmores for the design, for this innovations Blackmores has also honoured by the gold, silver and bronz medals at the Australian packaging design awards in three categories. 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 Australias premier research facility in the complementary medicines. This is very important for the NICM to identify the Blackmores institute as the key collaborator. Blackmores 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 Blackmores 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 blackmores 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 Blackmores have no limit in order to improve the product and offers the advantages to the retailers and the customers. In the year 2016, Blackmores has been honoured by the best employers of the Australia awarded by the Aon best employers awards. Blackmores also achieved the global therapeutics which is the chinese herbal medicines which leads to Australia and involves fusion health and oriental botanicals. Blackmores take part in the activities which has the large range which is done in the china at the Australia week. Blackmores had finance the Australian open and running it successfully. Blackmores 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, Blackmores 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. Blackmores also prestige by the National Export Award and also for the Australian packaging convenant high performer award. Blackmores 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 Blackmores 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. Blackmores was the first company which adapt the Australian recycling label in gthe planet Ark. 4000 people and even more than that reach the Blackmores 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. Blackmores 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 Blackmores also have the event of translating research into practice which is sold for the general practice of pharmacy. The Blackmores also organize marathan for people among society and across 30000 people participate in that marathan. For this marathan, Blackmores 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. Blackmores 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. Blackmores 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 Blackmores 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 Notes to the financial statements General information Blackmores 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. Significant accounting policies Reporting entity Blackmores ltd is the residence company of Australia. The financial statements of the company for the year 2013-14-15, consists of Blackmores 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 groups chief operating decision maker in order to allocate the resources and the segment is made on the performance which focuses on geographical regions. Financial instruments Fair value of financial instruments The amount of financial assets and financial liabilities is carried forward at depreciated cost from the fair value. Measurement of fair value by applying the techniques and assumptions 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. Joint ventures 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 Blackmores nutrition. Contingent liabilities The directors believe that there are no contingent liabilities at the end of the year 2015. Conclusion The Blackmores 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).Blackmores and Blackmores institute. Retrieved on 24 august 2016 from https://www.hri.org.au/get-involved/become-a-corporate-partner/blackmores Blackmores.ltd (2014).Blackmores export success. Retrieved on 24 august 2016 from https://medianet.com.au/releases/release-details?id=799631 Porter, s. (2016) Blackmores case study Blackmores.(2016).business and management. Retrieved on 24 august 2016 from https://www.termpaperwarehouse.com/essay-on/Blackmores/406239 Blackmores. (2015).financial reports .Retrieved on 24 august 2016 from file:///C:/Users/Guest/Downloads/Financial%20Report%20Half%20Year%20%202015%20(1).pdf Blackmores.(2014).financial reports. Retrieved on 24 august 2016 from file:///C:/Users/Guest/Downloads/Financial%20Report%20Half%20Year%20%202014%20(2).pdf Blackmores.(2014).Blackmores 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 Blackmores.(2014).over 80years of Blackmores.Retrieved on 24 august 2016 from https://www.blackmores.com.au/about-us/company-information/heritage-and-timeline Blackmores.(2016).Blackmores 2016 supplier of the year awards.retrieved on 24 august 2016 from https://www.blackmores.com.au/supplier-of-the-year-awards Blackmores.(2014).Blackmores campus.Retrieved on 24 august 2016 from https://www.blackmores.com.au/about-us/company-information/blackmores-campus Appendixes 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