Pental Ltd (ASX:PTL) has looked to the future at its annual general meeting, signalling to investors it expects to deliver on five key priorities through FY22.
The consumer staples stock, which operates a portfolio of household cleaning products, is coming off the back of a strengthened dividend and net profit after tax as COVID-19 drove demand for germ-busting chemicals.
And Pental expects to keep pace in FY22 as it ramps up its marketing strategy and introduces new products to its brick-and-mortar and eCommerce markets.
With the current financial year in full swing, Pental’s message to shareholders today was that it would continue to build on last year's momentum with new partnerships and a focus on sustainability.
Pental’s strategy in FY22 is built on five key pillars.
Building on Australian presence
Speaking at the company’s AGM, chairman Mark Hardgrave said: “Pental is a proud Australian company manufacturing a wide range of iconic brands, with products that are household staples in Australia, New Zealand and Asia.
“We remain one of the very few vertically integrated major supplier of trusted personal, household and commercial cleaning brands with Australian manufacturing and Australasian distribution.
“We also now own, a meaningful eCommerce presence with the latest acquisition of Hampers with Bite.
“Our vision is to be a leading supplier of shelf-stable products to our chosen markets, built around a reputation of delivering quality, innovation and sustainability to the satisfaction of our customers.
“At the same time, we recognise and prioritise the importance of growing our shareholder value.”
The year that was
Recapping the company’s performance in fiscal 2021, Pental’s chairman highlighted a series of financial tailwinds.
Hardgrave told investors: “FY21 was a successful year for Pental, driven by our focus on our core brands, delivering product innovation, driving efficiencies in manufacturing and continuing to grasp opportunities to grow our business.
“Pental maintained healthy momentum throughout FY21 after experiencing a surge in demand for our strong germ-killing products during the first wave of the COVID-19 pandemic."
The cleaning goods business tabled $125 million in net sales for the financial year — a result Hardgrave describes as matching “an extraordinarily strong FY20”.
Pental’s underlying net profit after tax spiked almost 12% in the financial year that was, jumping to $5.6 million.
Hardgrave explained: “We achieved this result based on strong margin contribution performance from firelighters and cleaners along with tight controls on costs, as we focused on growing our key brands both before and after the changes to our Duracell distributorship agreement in May 2021.”
The company’s strong financial performance underpinned a fully-franked 1.6-cent final dividend, bringing the sharehold payouts for the year up to 2.6 cents per share.
Hardgrave noted: “Excluding a special dividend paid in FY20, this represents an 18% increase in our ordinary dividends paid during the year, with a payout ratio of 63.2% of net profit after tax.
“We are pleased to deliver this to our shareholders, especially given the uncertain market conditions faced by many businesses as COVID’s impacts have continued throughout the year.”
Recent developments and key wins
Pental also called to mind a series of milestone achievements that continue to accelerate momentum in fiscal 2022.
First and foremost, the company has inked an exclusive bleach distribution agreement with a major hardware retailer.
Pental’s White King bleach range was rolled out onto the store’s shelves in September 2021, marking one of the first big achievements in the new financial year.
Prior to that, two new firelighter variants from the ASX-lister’s Jiffy range hit grocery giants in July this year, cementing Pental’s reign as the number one firelighter supplier across major retailers.
The company has also polished up its White King toilet gel range and plans to drum up momentum with half-price promotions throughout the financial year.
Pental’s Softly washing detergent line is also expanding — two new variants are being rolled out with major retailers, while three new options will be presented for ranging in FY22.
Speaking to the developments, Hardgrave stated: “This continues the company's long-running strength of developing a pipeline of products with unique points of difference.
“Leveraging our production strength, we are also continuing to explore and expand Pental's offering of contractually manufactured products, including private label products for leading retailers.”
What’s to come?
Over FY22, Pental will focus on marketing its growing range of cleaning and home chemicals, as well as developing its eCommerce arm.
New value packs and product packs are poised to hit physical and digital shelves throughout the financial year
The company also completed a key eCommerce acquisition in September, bringing gifting specialist Hampers With Bite into the fold.
Thanks to the buy, Pental anticipates it can bolster its scale and eCommerce expertise through fiscal 2022.
Pental expects to maintain strong momentum over the next seven months as it delivers on five strategic priorities:
- Driving sales growth through key brands;
- Developing new products and sales channels;
- New projects and acquisitions;
- Expanding export markets; and
- Continuous manufacturing improvements.
Hardgrave concluded: “I would like to thank our employees, customers and suppliers for their dedication to Pental and support of our strong brands.
“I would also like to thank my fellow directors for their collective efforts during the year and thank you our shareholders for your ongoing commitment and loyalty.
“Our business remains strongly positioned to drive continued profitable growth with a healthy balance sheet, strong and increasing brand recognition and an export and eCommerce strategy that provides significant upside.
“We are looking forward to exploring and executing on new opportunities to accelerate our growth in the year ahead and beyond …”