Decoding Elements that Drove Pental Limited’s FY20 Impressive Results

  • Sep 16, 2020 AEST
  • Team Kalkine
Decoding Elements that Drove Pental Limited’s FY20 Impressive Results

Summary

  • Consumer powerhouse Pental Limited had a very successful FY20, focussing on core brands, launching new products, driving further efficiencies in manufacturing and growing business significantly.
  • Underlying NPAT was up 45.4% on last year while statutory profit was up 161.3%.
  • Robust results were primarily catalysed by strong demand of products, Pental’s ability to ramp up production and launch new products to the market.
  • Pental expects to maintain momentum in FY21 and continues to explore opportunities, evaluate potential acquisitions, expand its portfolio, and focus on export growth.

“I am pleased to present Pental’s Annual Report for the year ended 28 June 2020”, expressed Chairman Mark Hardgrave, recently.

The consumer powerhouse of Australia and New Zealand, Pental Limited (ASX:PTL) was one of the handful companies that has truly shone, in what one may call, a dismal year for business. Pental’s statutory net profit after tax, net sales revenue, reported EBIT- all soared in FY20. Subsequently, as Pental enters FY21, there remains a strong demand for its trusted brands from both retail partners and consumers.

To read Pental’s FY20 results, CLICK HERE- Impressive! Pental’s Strong FY20 Performance May Maintain Momentum in FY21

Source: (Pental’s Investor Presentation, 27 Aug 2020)

Source: (Pental’s Investor Presentation, 27 Aug 2020)

Pental had an extremely successful year with a focus on core brands, the launch of new products, further efficiencies in manufacturing and overall growth in its business significantly. Interestingly, the Company had indicated that its performance for the year would be a good one while announcing a one-off special dividend of 0.7 cents per share.

For insights on the special dividend declaration, READ HERE: Don’t Miss! Pental Limited Indicates Strong Performance: Declares Special Dividend

In this backdrop, let us decode the reasons that seem to have led these impressive results-

Elements Propelling Pental Limited’s FY20 Performance

Kalkine image (Source: Pental’s ASX Reports, 27 Aug 2020)

Kalkine image (Source: Pental’s ASX Reports, 27 Aug 2020)

COVID-19 & Pental’s Elevated Product Demand

Whilst it appears  the biggest driver of Pental’s FY20’s sales and revenue was the pandemic that continues to wreak havoc globally and in Australia and New Zealand, , the demand for its household and personal care products is expected to be strong in the long term . Maintaining good personal and surrounding hygiene is a requisite to keep coronavirus away. Pental, offering “Trusted brands since 1856” in the domain was the go-to measure for citizens. In April 2020, the Company reported that there had been a significant increase in demand for its products.

ALSO READ: Pental Limited Experiences Elevated Product Demand, Sales Likely to Soar Amid COVID 19

Local Products At Competitive Price

Pental products are ‘Australian Made, Australian and New Zealand owned’. Besides, producing quality products remains to be the Company’s core focus. An impressive add-on to quality is the greater emphasis on the locally made products at a competitive price.

Robust Production Capabilities

During the challenging times created by COVID-19, Pental was vigilant and cautious about making the workplace safe. It adhered to all government guidelines. Besides, the Company was successful in ramping up production at the same time to address the surge in demand for its strong germ and virus killing products.

ALSO READ: Pental Limited Onboards New Managing Director, Stock in Green Zone

Social Media And Outdoor Advertising

Another element that helped Pental delivered its strong FY20 results was social media and outdoor advertising. Notably, the Company invested heavily in supporting its two big brands White King and Country Life through both these mediums. Consequently, sales grew even though the competition continued with heavy price discounting to influence consumer purchasing.

Focus On Cost Reduction

Pental’s focus was to hunt for ways to reduce production costs and remain competitive, especially with private label growth in most categories. The agility to be responsive to target changing market conditions resulted in strong growth, especially in the second half of the financial year.

Competitive Streak

In this highly competitive market, Pental brands remained (and continue to be so) well-placed. The Company achieved growth in all sales channels such as Metcash, Coles, Woolworths, and Pharmacy. Growth was also achieved in categories like toilet, household cleaning and dish wash in New Zealand. In Australia, White King bleach and White King Lemon toilet gel retain their #1 position in grocery. Jiffy and Softly brands ruled in their segments.

GOOD READ: Australian Favorite Pental’s Robust Outlook for 2020 Amid Challenging Retail Environment

Product Innovation

One of Pental’s core values, innovation has been instrumental in driving Pental’s success story. The Company’s continued its strength and ability to adapt and innovate in FY20 too; product innovation remained vital with the R&D and marketing teams. The Company knows its customers and consumers and has developed the right products for the purpose.

Besides, Pental expanded its trusted legacy brands into new segments like disinfectants and anti-bacterial handwash. New products of the year were White King’s disinfectant range and Country Life’s antibacterial range.

PTL is trading at $0.425 per share (AEST: 03:55pm) on 16 September 2020.

MUST READ: Unveiling Consumer Powerhouse Pental Limited's Recent Accomplishments

(Note: All currency in AUD unless otherwise specified)

 


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