Pental posts booming half yearly results, up 80 per cent
Home and hygiene products business Pental Ltd has delivered a bumper $5.27 million net profit after tax driven in part by last year’s acquisition of online hamper and gifting specialist, Hampers with Bite. Revenue from Hampers in the four months since its August acquisition was higher than the unit’s entire FY21 sales, pushing the bottom line up 82.5 per cent.
Pental exceeded its forecast EBIT that clocked in at $7.5m, a 78 per cent increase from the previous half year.
The sales boost meant the company lifted its interim fully franked dividend to 1.3 cents per ordinary share, a 30 per cent increase on the FY21 first half dividend.
Hampers With Bite runs both a business-to-business and business-to-consumer model, supplying gift hampers and food and wine hampers to its client base through a mix of own brand and third-party products.
It has established direct-to-consumer distribution infrastructure including a strategically located delivery centre close to Melbourne’s CBD.
Pental either distributes or manufactures a host of big-name brands including Huggie, White King, Jiffy, Softly and Velvet. The company is aiming to expand its e-commerce sales channels and generate growth via the newly acquired Hampers With Bite channel – a plan that appears to be working.
The results show Pental has benefited from Hampers’ supply route by providing same day delivery options to its consumers, whilst also improving its delivery efficiency.
Pental Ltd Managing Director, Charlie McLeish, said: "The incredible growth of the HWB business in the last few years continued even more strongly in the four-month period under Pental Group ownership. This growth has increased our confidence that we have made a strategic move in the right direction.”
“We are delighted by the contribution that Hampers with Bite has made to the Pental group and look forward to driving further growth with new and existing HWB customers in the year ahead.”
The company said in the broader macro environment, e-commerce sales are growing at a much faster pace than traditional bricks and mortar retail stores.
On the back of the stellar set of half yearly numbers Pental has raised its full year FY22 underlying EBIT forecast to between $10.5m and $11m – a hike of around 30 per cent compared to FY21’s underlying EBIT of $8.1 million.
Despite the solid set of numbers Pental said there was a lag in its expansion into Asia due to COVID-driven disruptions to small distributors and an unpredictable and tense political environment between Australia and China. Sales in the region dropped from $700,000 to $485,000 as a result although offset by a 12 per cent increase in business into New Zealand.
Pental is setting itself up well to simply bolt on new acquisitions and even new product ranges and allow them to flourish in its logistical infrastructure and sales channels.
Most companies that look to grow by acquisition are only as good as their last one and if that is true then Pental could easily go again.
The company looks to have backed a winner with the Hampers With Bite deal and appears to be making good on its aim to fully exploit the synergies and savings that can be eked out by joining the two businesses together - shareholders are unlikely to disagree after seeing a dividend cheque arrive in their mailboxes.
Is your ASX-listed company doing something interesting? Contact: matt.birney@businessnews.com.au