Acquisition boost: McPherson’s reports strong growth for former Blackmores brand Fusion

29-Aug-2022 - Last updated on 29-Aug-2022 at 01:16 GMT

Fusion's Immunity & Stress capsule product. ©Fusion Health Facebook

ASX-listed Australian firm McPherson’s has reported almost 90 per cent annual growth in its health business in FY22, with the herbals brand Fusion – previously owned by Blackmores’ Global Therapeutics – performing particularly well.

Sales of Fusion was said to have increased 26 per cent in the second half of FY22, which pulled up the total revenue of health products for McPherson’s.

McPherson’s, which specialises in beauty and health products, said total sales revenue was up 6.7 per cent to A$214m (US$148m) in FY22.

The bulk of which, A$187.7m (US$130m), came from its beauty business, while A$18.4m (US$12.8m) came from its health business which encompasses the Australian and New Zealand markets.

FY22 was also McPherson’s first full year ownership of Fusion and Oriental Botanicals brands – two brands that were previously owned by Blackmores’ Global Therapeutics.

The firm bought over Global Therapeutics from Blackmores in November 2020 for AUD$27m (US$19.3m).

Following the acquisition, McPherson’s began selling Fusion and Oriental Botanicals products for seven months in the second half of FY21, which amounted to A$9.7m. This figure jumped by almost 90 per cent when McPherson’s began selling the products for the whole of FY22.

Comparing the second half of FY21 and that of FY22, sales revenue of Fusion and Oriental Botanicals was up 19 per cent yoy, and this was mainly driven by a 26 per cent growth in the sales of Fusion products.

Fusion focuses on products that combine traditional herbal ingredients with vitamins and minerals, while Oriental Botanicals specialises in supplements developed based on traditional herbal ingredients.

“McPherson’s is well placed to continue to grow in a consistent manner into the future. We operate in the growing Health, Wellness, and Beauty sectors, with a portfolio of well recognised and respected brands.

“We remain confident in our ability to drive continued growth through customer, channel, and category expansion, enabled by targeted investment in innovation, and an enhanced and capable leadership team,” said McPherson’s CEO and MD Grant Peck.

Pharmacy expansion

A factor for Fusion’s sales growth was driven by its increased presence in pharmacies, in particular, Chemist Warehouse.

Having signed a strategic alliance with Chemist Warehouse in March, McPherson’s has managed to increase its product ranging in the pharmacy chain and one of the brands that has benefited from this arrangement was Fusion.

This was a crucial deal several health stores which are selling Fusion had closed down in the first half of FY22 due to challenges caused by COVID-19.

At the same time, the brand remains a leading player in health food channels, with an estimated 95 per cent distribution.

Aside from Fusion, McPherson’s also said that its skincare and beauty-from-within brand Dr. LeWinn’s had soared in sales due to the launch of collagen powders and liquid shots.

In FY22, the two products are said to consist 10 per cent of the brand’s total sales.

Under the deal with Chemist Warehouse, McPherson’s was also appointed as the pharmacy’s exclusive long-term distributor of several Chemist Warehouse-owned or controlled health and beauty brands outside of the Chemist Warehouse network in Australia and New Zealand.

This will cover brands such as Wagner Vitamins, Wagner Body Science, Bondi Protein, Foster Grant, INC, and Microgenics.

Chemist Warehouse also became a substantial shareholder of McPherson’s, owning 9.9 per cent of MCP shares since July 1 this year.