Pental Ltd (ASX:PTL) has had a very busy half year, completing the acquisition of Hampers With Bite (HWB), successfully integrating the business under the Pental e-commerce umbrella, and growing sales 12.1% in the New Zealand market.
The company also increased its visibility drastically, with email subscribers increasing to over 190,000, up 280% and website hits growing 128% to over 1.5 million as of December 20, 2021.
Pental has had a keen focus on e-commerce over this period, introducing premium online brands like Bondi soap and novel bundled value packs of White King, Country Life and Velvet brands.
Overall, the company’s local procurement strategy and recovery plan appear to have stood it in good stead, allowing a noteworthy increase of 46.7% to $4.23 million in reported profits after tax despite growing commodity and freight prices.
Hampers With Bite integration
The HWB integration was the first step in Pental’s e-commerce strategy, allowing the company to enter the new market sector with an established customer base, baked-in e-commerce expertise, good revenue synergies, and new product capabilities.
The HWB-Pental integration both notably improved underlying earnings before interest, tax, depreciation, and amortisation (EBITDA) – gaining an impressive 55.6% over the half-year – and grew the HWB business significantly, increasing net sales to $24.98 million, up 56.3% from the same four-month period last year.
"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,” Pental managing director Charlie McLeish said.
“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 remains effectively debt-free as of writing, holding some $10.55 million in cash after raising over $10 million in a placement and share purchase plan to facilitate the acquisition of HWB, leaving the company with plenty of funds to action its forward growth plan.
Watch: Pental's acquisition of Hampers with Bite contributes to strong half-year financials
Forward outlook
Pental has big plans for its e-commerce channels, already planning an expansion for its HWB offerings to include Wellness Gifting, hampers with a wellness range that may include sweet treats like chocolate and premium fruit and nuts, scented candles, botanica collections, bath salts and other luxury gifts.
These hampers are marketed toward employee recognition Wellness Gifting, which Pental claims can increase corporate growth by 6% and reduce turnover by 31%, based on research from ibis Worldwide and Forbes in 2022.
Overall, the second half of the financial year will include focus on:
➢ Ensuring full price recovery on all commodity and freight costs increases incurred in the first half;
➢ Driving sales growth through key brands in both the e-commerce and traditional sales channels;
➢ Developing new products for both the Hamper and traditional sales channels;
➢ Developing a full year calendar of events in the e-commerce sales channels;
➢ Continuing to explore additional acquisition opportunities;
➢ Developing and growing the Bunnings and other partnerships; and
➢ Continuous manufacturing improvement at the Shepparton operations.
About Pental
Pental is a provider of household chemical and cleaning products among many other things, with a brand portfolio including iconic Australian names like White King, Janola, Sunlight, Softly, Country Life, Velvet, Martha’s, Huggie, Natural Selections, LUX, Little Lucifer and Jiffy.
On September 1, 2021, Pental announced that it had completed its acquisition of Hampers with Bite Pty Ltd (HWB), a leading Australian e-commerce hamper and gifting business.
Pental also launched its own e-commerce website and marketing, capitalising on the acquisition of luxury soap brand Bondi, the release of two new Jiffy firelighter products and multiple other new offerings.