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Blackmores shares hit fresh 4-year low

Blackmores has slashed its final dividend after full-year profit fell 23.6 per cent

Blackmores has slashed its final dividend by 55 per cent in another blow to shareholders who have seen the stock fall by half in the past 18 months.

Shares in the vitamin and supplements maker closed 14.85 per cent lower at $70.90, having hit their lowest level since March 2015.

Shares in the company, once a stock market darling, peaked at $220.90 in January 2016.

Blackmores said on Thursday its profit in the 12 months to June 30 was down 23.6 per cent to $53.5 million and was likely to fall further in the six months to December 31.

The drop came despite an increase in sales as expenses grew faster than revenue.

Blackmores said that while sales to China fell 15 per cent to $122 million because of a new e-commerce law, overall revenue for the 12 months to June 30 was up one per cent to a record $610 million.

"Despite this, there's no shying away from the fact that net profit for the full year does not reflect the level of top line sales that was achieved," chairman Brent Wallace said.

"This is due to our operating expenses growing at a faster rate."

Blackmores said it had eliminated about 40 roles as it tried to save $60 million over three years and management was exploring ways to accelerate the cost-cutting program.

The vitamin and supplement maker said profit should rebound in the second half of fiscal 2020 as a result of the streamlining.

Blackmores said sales to Asian countries other than China were up 30 per cent and Australia sales posted modest gains but key export accounts to China fell because of the country's crackdown on personal shoppers known as daigou.

The new e-commerce laws, which took effect January 1, has cut into the daigou trade because it requires resellers get business licenses and pay taxes.

It has caused Chinese customers to shift to direct purchasing from local e-commerce platforms.

Blackmores said it was trying to adapt by building relationships with the cross-border e-commerce platforms but expected the challenging trading conditions in its channels to China to continue through the first half of FY20.

The company is considering entering the Indian market as well as bringing a cannabis product to market.

New chief executive Alastair Symington, a former Nestle, Gillette and Procter & Gamble executive, joins the company in September.

BLACKMORES

* Full-year profit down 23.6pct to $53.5m

* Revenue up 1pct to $610m

* Dividend down 85 cents to 70 cents, fully franked.