Blackmores Corporate Financial Analysis

6089 Words Mar 15th, 2015 25 Pages
1. Executive Summary
Blackmores Ltd is one of the leading contenders in the Health Care sector. The company specialises in a range of products including herbal and vitamin supplements. The company has a major share in the Australian and New Zeeland’s market generating almost 85% of the revenue from this region. Blackmore’s capital structure has been analysed as requested by the Board of directors to assist them in optimizing the company’s current capital structure.
Firstly, the report analyses and compares Blackmores Ltd. financial data with two comparable competitors in the industry: Pharm-a-Care laboratories Pty Ltd and Swisse Wellness Pty Limited. Secondly, a detailed financial analysis was performed to analyse the capital structure of
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(ibis world)
The market share concentration is considerably high. The top four players dominate the market with almost 70% of the market share. Blackmores currently has 25.5% of the market share putting it in the second position when it comes to market share, first being Swisse Wellness Pty Ltd at 28.5%.
The industry is marked by Low revenue volatility and medium regulation level. Although industry globalisation is a critical stage and poses a major threat. However over the last five year the industry has boomed due to increase in consumer expenditure , after the recovery of Australian economy in 2010 the industry has started to positive upturn. The industry is expected to grow at annualized 3.3% to a total of $771.3 million.
3. Capital Structure Analyses
3.1 Historical Company Leverage Financing & Peer Industry Leverage Analysis
The financial information used for this report was obtained from the company’s annual reports to shareholders and data downloaded from DatAnalysis premium and IBISWorld. The last four years of data was use in the report to analyse Blackmores’s capital structure and leverage policy.
The financials information and annual reports to shareholders suggest that Blackmores manages its capital. Management expects to maintain a net debt to equity ratio between 30% and 45% to ensure that units in the group will be able to continue as a going concern while maximising the return to stakeholders (Blackmores 2014