Blackmores invests in ‘much needed’ technology

Blackmores has outlined plans to uplift its digital capabilities with further investment to enhance its supply technology and key processes. 

The Australian health supplements company will invest around $20-25 million across the coming year with about half to be put towards improving its systems and tools.

In its 2022 full-year results, Blackmores reported roughly $10 million will be put towards ‘much needed’ technology improvements including e-commerce platforms and customer relationship management solutions.

Blackmores Group CEO and managing director Alastair Symington told investors on Thursday the business has made “solid progress as part of our strategy to be a more efficient organisation”.

“Digital commerce represents a significant opportunity for us to connect with customers and e-commerce now represents 29 percent of our group sales.

“It is also a vital component of our strategy to become a more digitally connected organisation for the future.”

Symington also added Blackmores has now completed the implementation of “its new cloud-based ERP in Asia and put into place a new global content and digital management system.”

Chief financial officer Patrick Gibson added most of Blackmores technology and development expenses are now part of its operating expenditure, including its cloud computing costs.

“This will also include supply chain investments to further enhance our efficiency and unlock capacity for more growth and IT investments in key processes, including demand and supply planning solutions.

“We will enhance our digital capabilities including e-commerce platforms, and customer relationship management solutions,” Gibson said.

The company’s overall capital expenditure for FY22 was $10.7 million which was made up of “maintenance and efficiency capex across IT, upgrades to facilities and equipment and other costs.”

While Blackmores capital expenditure was down 42 percent compared to the prior year, this was down to its cloud computing expense of $9.3 million now part of its operating expenses.

Speaking on the change Symington noted its cloud-based solutions are “classified as operating expense under the accounting standards, rather than capex”.

Blackmores reported group revenue of $649.5 million, up 12.8 percent from the prior year.

Its underlying gross profit reached $346.6 million, up 15.1 percent while group underlying earnings before interest and taxes (EBIT) hit $56.6 million, up 19.0 percent.

The company reported a group underlying net profit after tax (NPAT) of $31.1 million up 22.6 percent and a statutory NPAT of $30.6 million, up 7.0 percent from the prior year.