Pental Ltd (ASX:PTL) has released its full-year results for the 2022 financial year.
The branded home, hygiene and e-commerce product developer and supplier recorded strong performance across its diverse product portfolio, aided by a “significant uplift” in group profitability and a welcome contribution from online hamper and gifting specialist Hampers with Bite (HWB).
The company’s underlying earning before interest and taxes (EBIT) was towards the high end of guidance at $10.783 million – 32.3% up on the previous comparative period.
Acquisition promoted growth
The August 2021 acquisition of HWB delivered Pental an online channel customer base, improved scale, e-commerce expertise, revenue synergies and new product capabilities.
Robust seasonal sales across both business-to-business and business-to-customer channels drove HWB’s FY22 revenue up 59.1% year-on-year.
The purchase of HWB fully replaced the profitability from reduced Duracell distribution with a high profit margin business fully owned by the group.
Multiple growth drivers
The company saw multiple other growth drivers in FY23, including:
- continued realisation of HWB synergies and cross-selling opportunities with Pental's manufacturing capabilities;
- stronger e-commerce sales following implementation of new HWB non-seasonal growth strategies;
- development of innovative new products with unique points of difference;
- growth of retail brand revenue in Australia by 5.9%, driven by multiple strong distribution partnerships; and
- continued sales growth through the New Zealand market, where revenue grew by 7.8% in the financial year.
There was a final fully franked dividend of 1.7 cents per ordinary share, which took total dividends for the year to 3.0 cents per share, representing a 15.4% increase on the dividends paid compared to the previous year.
Pental maintains a strong position to drive continued profitable growth with healthy cash flow and a strong balance sheet – with low gearing at 5% as at end of FY22 – and a robust, complementary product portfolio that stands to benefit from strong and increasing brand recognition.
True Australian heritage
Pental managing director Charlie McLeish said: "Against the backdrop of tougher economic conditions, it is very pleasing to deliver strong FY22 results which demonstrate the resilience of our business and the power of our brands in a challenging operating environment.
“We are proud to have delivered a fourth successful year of profit growth for our shareholders while remaining true to our Australian heritage, investing for jobs and growth through our manufacturing plant in Shepparton, Victoria.
"I am delighted to report that our acquisition of Hampers with Bite has proven to be a successful addition to our Group. HWB has transformed Pental by boosting our financial scale and delivering new capabilities which are highly complementary to our existing business.
"Our strong financial and operating performance, coupled with a robust balance sheet, has positioned Pental well to return profit to shareholders through growth in fully franked dividends, while retaining sufficient balance sheet flexibility to accelerate our growth through organic and inorganic initiatives.
“I thank our shareholders, staff, suppliers and customers for their ongoing loyalty and support."