Branded home, hygiene and e-commerce product developer Pental Limited (“Pental” or the “Company”) is
pleased to update the market regarding its results for the Half Year ending 26th December 2021 (FY22 H1).
Key Highlights
• Pental has delivered strong performance across its diverse Company-owned branded product
portfolio, headlined by a 4-month revenue performance from online hamper and gifting specialist
Hampers with Bite (HWB) that was higher than HWB’s entire FY21 revenue performance, driving
underlying net profit after tax (NPAT) growth of 82.5% to $5.27 million
• FY22 H1 underlying EBIT1 better than forecast at $7.555 million – 78.3% up on the previous
comparative period (PCP)
• Pental lifts its full year FY22 underlying EBIT1 forecast to the range of $10.5 million to $11.0
million – an increase in the range of 28.9% to 35.0% compared to FY21 underlying EBIT of $8.1
million
• Acquisition in August 2021 of HWB has brought Pental an online channel customer base, improved
scale, e-commerce expertise, revenue synergies and new product capabilities. Robust seasonal
sales across both B2B and B2C channels drove HWB FY22 H1 revenue +70.8% on the PCP2
• Multiple growth drivers in 2022:
o Realisation of HWB synergies and cross-selling opportunities with Pental’s brands
o Implementation of new HWB non-seasonal growth strategies
o Stronger e-commerce sales following the successful launch of premium brand Bondi Soap
o Development of innovative new products with unique points of difference following the
recent launch of White King, Country Life and Velvet value packs
o Continued sales growth in the New Zealand market, building upon NZ revenue which grew
by 12.1% in FY22 H1 (excluding Duracell)
• Interim fully franked dividend of 1.3 cents per ordinary share, representing a 30% increase on the
FY21 H1 dividend
• Pental remains in a strong position to drive continued profitable growth with strong cash flow and
balance sheet – maintaining an effective net debt free position with $12.9m in cash and $4.7m in
acquisition-related borrowings as at 26 December 2021 – and a robust, complementary product
portfolio that benefits from strong and increasing brand recognition
3 Includes unaudited pre-acquisition figures for HWB.
Financial Performance
The Company is pleased to report strong financial performance for its first half of FY22 which has
exceeded the guidance provided via ASX announcement on 16 December 2021.
Underlying net profit after tax for the 26-week period ended 26 December 2021 was $5.272 million (27
December 2020: $2.889 million) which was more than 17% stronger than the guidance issued on 16
December 2021. Underlying EBIT (Earnings Before Interest and Tax) of $7.555 million was up 78.3% on
the previous corresponding period.
New E-Commerce Business
In line with Pental’s strategy consistently communicated in earlier periods, the Group announced and
entered an agreement to acquire the Hampers with Bite business on 20 August 2021. Following a
successful capital raise of $5.2 million through Tranche 1 of the placement announced on 20 August
2021, the Group completed the acquisition on 1 September 2021. The Group raised a further $5.233
million through Tranche 2 of the placement and a share purchase plan (SPP). In total, the Group raised
$10.046 million (net of costs) in order to facilitate its acquisition of HWB.
Hampers With Bite Pty Ltd (HWB) is a Melbourne-based online hamper and gifting specialist. Its range of
premium hampers and gifts are targeted at affordable prices towards gifts to friends & family and
corporate clients. HWB provides customers with the option of creating their own hamper or simply
purchasing one of HWB’s pre-designed hampers online. Prior to acquisition by the Group, HWB grew
from an approximately $10 million revenue3 with approximately $1 million EBIT3 business in
3 Includes unaudited pre-acquisition figures for HWB.
FY19 to an approximately $24 million revenue3 business in FY21 with an EBIT3 of approximately $5
million.
HWB has continued its strong growth trajectory into FY22, recording revenue of $31.552 million for the 6
months ending 26 December 20213 compared with $18.477 million during the PCP3, an increase of
70.76%. Under Pental’s ownership, from 1 September to 26 December 2021, HWB delivered strong
revenue of $24.987 million with an EBIT contribution of $6.290 million, underpinned by a strong
Christmas season across both B2B and B2C channels.
The Group continues to target key events outside the Christmas season in order to pursue growth in
other months of the year. The Group is also targeting a range of personal care products manufactured at
its Shepparton facilities to be included in new hamper offerings in 2022.
Pental Managing Director, Charlie McLeish, said:
“The incredible growth of the HWB business in the last few years continued even more strongly in the 4-
month period under Pental Group ownership. This growth has increased our confidence that we have
made a strategic move in the right direction. In the macro environment, e-commerce sales are growing
at a much faster pace than traditional brick and mortar store retail. The high calibre team at HWB not
only empowers us to achieve growth through the hampers business, but also equips us to gain scale
outside of our traditional markets with our iconic brands. We are delighted by the contribution that
Hampers with Bite has made to the Pental group and look forward to driving further growth with new
and existing HWB customers in the year ahead.”
Pental consumer products business
As disclosed in the ASX announcement made on 16 December 2021, Pental has experienced more
stable demand in the FMCG segment following the initial wave of COVID-19 outbreaks during late FY20
and early FY21. Non-Grocery channels were negatively impacted in FY22 H1 due to multiple outbreaks
and lockdowns across Victoria and New South Wales. As a result of these factors, Pental’s sales in
Australia for owned brands (excluding HWB) were impacted by 14.9% in the first quarter of FY22. The
revenue trend recovered in the second quarter and sales were up on the PCP by 4.4%. Pental retains a
positive outlook for sales performance of its consumer products business in FY22 H2, to be supported by
its recently launched e-commerce channel and commencement of product supply into a major hardware
channel which was delayed due to multiple lockdowns.
New Zealand net sales revenue increased by 12.1% compared to the PCP (measured in AUD) as
Pental’s key brands continue to perform strongly in the New Zealand market in key categories i.e. bleach,
cleaners and manual dishwash. Expansion into Asia continues to lag due to COVID-driven disruptions to
small distributors and an unpredictable and tense political environment between Australia and China.
Owned brand sales into Asia were $0.485 million in FY22 H1 compared to $0.703 million in H1 FY21.
Pental has been impacted by rising input costs of approximately $1.5 million in FY22 H1 due to a sharp
and significant rise in the price of commodities used in its manufacturing. Tallow and vegetable noodles,
which are used in Pental’s soap products, have been most severely impacted by increasing prices further
escalated by paraffin (used in firelighters), international freight and a weaker Australian dollar. Pental is in
the process of implementing a price recovery strategy which includes appropriate substitution of raw
materials where possible as well as strategic price increases through which the Company expects to
recover these higher costs of production with effect from early FY22 H2.
During the period the Company successfully invested in upgrading fire protection systems at its
Shepparton manufacturing and warehouse facility, leading to significant annualised savings of
approximately $0.5 million in insurance premiums effective 1 December 2021.
Marketing: The first half of the year saw a committed focus on promoting Pental’s core brands across
multiple digital platforms, utilising static, animated and video creative. Since July 2020, the Group has
garnered more than 25 million impressions while reaching more than 14 million highly targeted Australian
consumers via paid advertising, programmatic displays and consumer promotions. Traditional outdoor
advertising also complemented the digital activity with White King and Country Life featuring on billboards
and FM radio nationally.
The Hampers with Bite FY22 H1 marketing initiatives continued under Pental’s ownership, resulting in
sales exceeding all expectations. HWB performed without disruptions despite the challenges posed by
COVID-19. Strategic advertising ensured both the B2B and B2C channels both achieved significant sales
growth.
Outlook
Pental is pleased to report better than expected FY22 H1 profitability and now expects that FY22 full year
EBIT will be in the range of $10.5 million to $11.0 million – an uplift in the range of 28.9% to 35%
compared to FY21.
The Group will continue to focus on the following key strategic objectives in the second half:
1. Ensure full price recovery on all commodity and freight costs increases incurred in the first half
2. Driving sales growth through key brands in both the e-commerce and traditional sales channels
3. Developing new products for both the Hamper and traditional sales channels
4. Developing a full year calendar of events in the e-commerce sales channels
5. Continue to explore additional acquisition opportunities
6. Develop and grow the Bunnings and other partnerships
7. Continuous manufacturing improvement at the Shepparton operations
Dividend
In respect of the half year (26 weeks) ended 26 December 2021, the Company will pay an interim fully
franked dividend of 1.3 cents per ordinary share, payable to shareholders on 23 March 2022, with a
record date of 28 February 2022.
For more information, please contact:
Investor queries: Oliver Carton, Company Secretary, Pental Limited, tel: +61 3 9251 2311
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DYOR
i hold PTL ( my average SP is 30.3 cents )
will probably do OK while the virus phobia persists
nothing exciting but a handy ‘bottom drawer’ stock
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