This morning natural beauty product business BWX Limited (ASX: BWX) reported a normalised EBITDA (operating income) of $26.4 million on revenue of $72.7 million for the full year ending June 30, 2017. The operating income and revenue are up 30.7% and 34% over the prior year.
BWX continues to grow sales of its core Sukin natural beauty products such as handwash, shampoo, soaps, moisturisers, scubs, and other skincare or cosmetic products that contain no chemicals and are never tested on animals.
Sales of Sukin were $62 million over FY 2017 up 53.9% on FY 2016 and for the six-month period June 30, 2017 Sukin sales were up an impressive 48.8% over the prior corresponding six-month period. In Australian, Sukin now has a larger market share in the natural beauty products space than powerful conglomerates such as L'Oreal, Nivea or Olay in part thanks to its affordable pricing.
Despite Sukin's competitive pricing the group's gross margin improved to 65.5% for the full year, which is up from 62.1% in the prior year. Margins have benefited from the decision to reduce the company's reliance on third-party manufacturing and may have potential to move higher.
Not only is it growing strongly in its core Australian market, but it is also investing heavily in growing sales in large overseas markets like the UK, China and Canada.
In total export sales more than doubled over the prior year to $14.2 million, with the UK an especially promising market thanks to the growing distribution deals the group has via the Boots and Holland & Barrett pharmacy chains.
The company expects to have news as to a possible increase in its distribution agreement with Boots by late 2017 after a review of 12 months of sales data. It also announced it is now selling expanded product ranges into more stores at Holland & Barrett due to the initial success of its deal with the healthcare retailer.
In July BWX announced the US$38.4 million acquisition of Mineral Fusion as a leading U.S. natural cosmetics brand, with distribution networks that BWX may be able to sell its existing Sukin brands through.
The company announced a final fully franked dividend of 4.2 cents per share to bring total annual dividends to 6.7 cents per share on 13.7 cents in diluted earnings per share.
The group guided to expect FY 2018 EBIDTA growth to exceed the 30.7% delivered this year thanks to a mix of organic sales growth and the impact of the Mineral Fusion acquisition.
