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Cleaning products maestro Pental delivers strong earnings

Pental, the ASX-listed Melbourne-based manufacturer and distributor of well-known household cleaning products and chemicals, has delivered a strong set of figures for 2021-22 financial year, thanks in no small way to its acquisition last August of Hampers With Bite, or “HWB”.

Pental achieved underlying earnings before interest and tax, or “EBIT” of $10.8 million — up 32.3 per cent.

Net profit after tax of $6.4 million was up by more than 18 per cent and underlying EBIT and underlying net profit after tax were also up.

Pental is best known for household products such as Jiffy firelighters, Huggie fabric softener, Lux, Velvet, Country Life, Duracell and its number one brand, the White King range of cleaning products.

Melbourne-based HWB, however, has a hamper and gifting business in marked contrast to household staples bought in supermarkets and pharmacies.

It offers an online range of premium hampers and gifts at affordable prices targeted towards gifts to friends, family and corporate clients.

However, Pental management says the acquisition was consistent with the company’s policy of acquiring strategic assets and channel diversification.

HWB has brought to the table not only an online channel customer base and e-commerce expertise but also improved scale, revenue synergies and new product capabilities.

Robust seasonal sales across both business to business, or “B2B” and business to consumer, “B2C”, channels drove HWB’s revenue in the financial year up more than 59 per cent, year on year.

HWB has transformed Pental by boosting our financial scale and delivering new capabilities which are highly complementary to our existing business.

McLeish said while retaining reserves to accelerate the company’s growth through organic and inorganic initiatives, Pental was well positioned to pay a fully franked final dividend of 1.7 cents per share. This would take total dividends for the year to 3 cents, compared with last year’s total of 2.6 cents.

Besides HWB, other areas of Pental’s business enjoyed increased sales, despite what McLeish describes as a tough first half to the financial year that was impacted by “significant” inflationary pressures on raw materials.

Cost recovery programs in the second half of the year made for a rosier picture by year’s end and boosted revenue for the Owned Brands side of the business by more than 5 per cent to almost $55 million.

Pental’s White King cleaning products range led the way, with net sales up 11 per cent and the personal care brand Country Life also performed well.

Various new products were launched with retail partners such as Woolworths, Bunnings, Costco and Chemist Warehouse.

Overseas, sales in New Zealand were up almost 8 per cent and Pental developed products and pack sizes specifically for new markets in Asia – namely China, Vietnam and Thailand.

Pental also announced its strategic outlook for the future, including driving sale growth through White King, growing new sales channels, improving operational performance at Pental’s two operations sites at Shepparton and Maidstone in Victoria.

HWB’s online customers can look forward to an increased range of wellness and self-care products as Pental targets 4-6 per cent projected growth in the consumer and corporate wellness markets.

Is your ASX-listed company doing something interesting? Contact: matt.birney@wanews.com.au

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