AUS
NZ
UK
CA
USA
IND
Summary
- Pental Limited reported a very successful FY20 focussing on core brands, launching new products, driving further efficiencies in manufacturing, and growing its business significantly.
- In a highly competitive market, there is strong demand for Pental’s ‘Australian Made, Australian and New Zealand owned’ trusted brands, from retail partners and consumers.
- The Company expects to maintain momentum in FY21. It is exploring additional partnership opportunities while backing own trusted brands through investment.
- Pental’s five core values remain intact: #1 priority of safety, maintaining trust and development of its people, innovation, quality control and customers.
Pental Limited (ASX:PTL) is a trusted manufacturer and distributor of personal, household and commercial products across Australia, New Zealand and Asia. The Company is a branded market leader and the largest local manufacturer of bar soaps, liquid bleach and firelighter cubes in Australia and New Zealand. It also provides distributorship services and has grown through dedication to customer service, efficiency, and quality.
Pental manages a portfolio of leading brands which are household names in Australia and New Zealand. So much so, wherever one goes in an Australian home, it would be odd not to find at least one Pental product.
On 27 August 2020, the Company’s stock marked a significant uptick on the ASX. It was trading up 10.5% and has delivered YTD returns of 31.04%. The most probable driver of this stock surge was Pental’s impressive FY20 results demonstrating how the strong brands, strong demand, and strong team drove Pental’s profit. PTL is trading at $0.48, up by 3.226% (AEST: 01:26 pm) on 1 September 2020.
Pental’s FY20 Financial Accomplishments
The Company’s earnings growth was catalysed by the strong demand of products and the ability to ramp up production and launch new products to the market amid volatility. More specifically speaking, the agility to be responsive to target changing market conditions owing to COVID-19 resulted in strong growth in the second half of FY20.
GOOD READ: Pental Limited Experiences Elevated Product Demand, Sales Likely to Soar Amid COVID 19
Let us screen through some highlights-
- Statutory NPAT was A$5.019 million, relative to A$1.921 million in FY19.
- Net sales revenue was A$126.460 million, up 25.90% (FY19: A$100.446 million).
- Net sales revenue in Australia was up 26.98% or A$23.280 million on last year.
- Net sales revenue in New Zealand was up NZ$2.341 million on last year.
- Reported EBIT increased to A$7.396 million relative to A$2.829 million in FY19, up a staggering 161.3%.
- Closing net cash position was A$3.668 million, and Pental remains debt-free.
- Capital investment of A$2.079 million supported initiatives undertaken during FY20.
- Pental paid a fully franked special dividend of 0.7 cps on 7th August 2020 and has declared a fully franked final dividend of 1.50 cents per ordinary share. This takes the total dividend for FY20 to 2.9 cents versus 2.0 cents in FY19.
For more insight on the special dividend, PLEASE READ: Don’t Miss! Pental Limited Indicates Strong Performance: Declares Special Dividend
FY20 Financial Highlights (Source: PTL’s FY20 Results Presentation, 27 August 2020)
Pental’s FY20 Brand Accomplishments
Pental was able to capitalise on the surge of demand for strong germ-killing products by introducing new products under its White King and Country Life brands. So much so, Aldi ranged Pental’s branded products for the first time. Three new White King disinfectant products were developed and released via various retailers amid the pandemic, each offering strong germ-killing efficacy to help families stay protected. Besides, two new hand wash products were developed under the Country Life brand.
Pental invested in supporting its core brands White King and Country Life through various platforms including social media, sponsorship of Western Bulldogs football club and multimedia advertisements such as pay-per-click, Influencer, etc. This was done to ensure that the Company’s high quality Australian manufactured brands remain relevant to the consumers. Consequently, marketing expenses were A$0.721 million above the prior period.
Besides, Pental proved its stance as an efficient and proven strategic brand development partner in the Australian consumer market. The strategic partnership with Berkshire Hathaway worked successfully with a 44.26% increase in revenue for Duracell & Procell branded products relative to FY19.
Pental’s strategy made more progress in entering new sales channels with the arrangement to supply Pental’s flagship brand White King into Bunnings for the first time in May 2020.
Other Significant Accomplishments
Impressively, exports to Asia were up by A$0.392 million or 20.59% compared to the prior year. As a step further to increase export growth, the Company is currently in the early stages of supply with a large distributor in China that can provide more scale into the market where high quality Australian brands are well regarded. The Company will continue to investigate opportunities to supply other markets.
During FY20, Pental focussed on efficiency improvement and driving production costs down. Labour utilisation factor improved by 1.5% compared to prior year.
Besides, energy and utility costs largely remained in line with last year as a percentage of production costs. The number of cartons produced was up 9.8% compared to the prior year.
GOOD READ: Unveiling Consumer Powerhouse Pental Limited's Recent Accomplishments
Way Forward
The Company expects to maintain momentum in FY21. The strategic distribution partnership with Duracell is likely to support sustainable profitability. The Company is also working with key customers to expand its portfolio of Private Label products
Meanwhile, Pental is exploring additional partnership opportunities.
It is also supporting its own trusted brands such as White King, Janola, Country Life and Softly with strong above the line investment. The Company continues to explore opportunities to introduce new products, similar to the successful launch of the White King disinfectants and Country Life antibacterial handwash.
