Pental Ltd (ASX:PTL) has released its annual results for the financial year 2022.
The developer and supplier of branded home, personal care and e-commerce products delivered strong performance across its diverse product portfolio, helped by a “significant increase” in group profitability and a contribution welcome from online gift and basket specialist Hampers with Bite (HWB).
The company’s underlying earnings before interest and taxes (EBIT) were in the upper range of guidance at $10.783 million, 32.3% higher than the prior comparative period.
Acquisition Drives Growth
The acquisition of HWB in August 2021 provided Pental with online channel customer base, enhanced scale, e-commerce expertise, revenue synergies and new product capabilities.
Strong seasonal sales across B2B and B2B channels drove HWB’s FY22 revenue up 59.1% year-over-year.
The purchase of HWB replaced Duracell’s reduced distribution profitability entirely with a high-profit-margin business wholly owned by the group.
Multiple growth drivers
The company saw several other growth drivers in FY23, including:
- the continued realization of HWB synergies and cross-selling opportunities with Pental’s manufacturing capabilities;
- stronger e-commerce sales following the implementation of new non-seasonal growth strategies by HWB;
- development of new innovative products with unique points of difference;
- private label revenue growth in Australia of 5.9%, driven by multiple strong distribution partnerships; and
- the continued growth of sales in the New Zealand market, where sales increased by 7.8% during the year.
There was a fully franked final dividend of 1.7 cents per common share, bringing total dividends for the year to 3.0 cents per share, representing a 15.4% increase in 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 a low leverage ratio of 5% at the end of FY22 – and a strong and complementary product portfolio that should enjoy strong and growing brand recognition.
True Australian Heritage
Charlie McLeish, Chief Executive Officer of Pental, said, “Amid tougher economic conditions, it is very pleasing to deliver strong FY22 results that demonstrate the resilience of our business and the power of our brands in a difficult operating environment.
“We are proud to have achieved a successful fourth year of earnings growth for our shareholders while remaining true to our Australian heritage, investing for jobs and growth through our manufacturing facility 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 increasing our financial size and delivering new capabilities that are highly complementary to our existing business.
“Our strong financial and operational performance, coupled with a strong balance sheet, has positioned Pental well to return profits to shareholders through fully franked dividend growth, while maintaining sufficient balance sheet flexibility to accelerate our growth through organic initiatives. and inorganic.
“I thank our shareholders, staff, suppliers and customers for their continued loyalty and support.”