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McPherson’s shares soar on soaring profits, dividends, EPS

McPherson’s Ltd (ASX: MCP) shares climbed 7% yesterday after it released its results for the financial year ending June 30, 2019. Below is a summary of the results with comparisons to the prior year. 

  • Statutory profit before tax $19m, up 165%
  • Adjusted net profit for continuing businesses $13.7, up 35%
  • Sales revenue from continuing ops $210.3m, up 7%
  • Underlying earnings per share 13c, up 33%
  • Final fully franked dividend of 6cps, full year dividends of 10cps
  • Net debt reduced to $7.2m on gearing of 7.2%
  • Forecast for 10% profit before tax growth in FY 2020

McPherson’s Managing Director, Mr. Laurence McAllister said: “We are particularly pleased with the performance of our owned brands, which helped drive total group sales revenue up 7% on previous year. Of note was the stellar result from Dr. LeWinn’s which delivered 125% growth in revenue.”

The group sells skincare, beauty and household goods products under a variety of different brands with the strong growth of its Dr LeWinn brand into China likely to excite investors. 

At $1.99 shares only trade on 15.3x FY 2019’s earnings whereas other consumer goods companies with any kind of sales into China like Blackmores Limited (ASX: BKL), Bellamy’s Ltd (ASX: BAL) or Treasury Wine Estates Ltd (ASX: TWE) trade on far higher multiples.

The group is also forecasting double-digit profit before tax growth in FY 2020 and sports a 5% trailing yield alongside a reasonable balance sheet. As such it could interest the value investors. 

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Motley Fool contributor Tom Richardson has no position in any of the stocks mentioned.

You can find Tom on Twitter @tommyr345

The Motley Fool Australia owns shares of and has recommended Blackmores Limited and Treasury Wine Estates Limited. The Motley Fool Australia has recommended Bellamy's Australia. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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