Why the McPherson’s (ASX:MCP) share price was crushed today

The McPherson’s Ltd (ASX:MCP) share price crashed 11% lower and is now down 60% over the last 12 months. Here’s why…
The post Why the McPherson’s (ASX:MCP) share price was crushed today appeared first on The Motley Fool Australia. –

The McPherson’s Ltd (ASX: MCP) share price continued its disappointing run and sank lower again on Wednesday.

The beauty products company’s shares dropped 11% to $1.21.

This means the McPherson’s share price is now down 60% over the last 12 months and trading within touching distance of a two-year low.

Why did the McPherson’s share price crash lower today?

Investors were selling McPherson’s shares today following the release of a disappointing half year result.

Management blamed the same weakness in the daigou channel that has been impacting A2 Milk Company Ltd (ASX: A2M) and Blackmores Limited (ASX: BKL) for its poor performance.

For the six months ended 31 December, the company reported a 4.1% decline in sales revenue to $101.7 million.

Management advised that it achieved domestic sales growth of 6% during the first half. This was thanks to market share gains from four of its products. However, a 65% decline in export sales more than offset this.

On the bottom line, the company reported a 19.2% decline in underlying net profit after tax to $4.6 million. Though, it is worth noting that this underlying result does not include a $4.3 million provision for excess hand sanitiser inventory.

Despite its weak result, the McPherson’s board has declared a fully franked interim dividend of 3.5 cents per share. This is down from 4 cents per share in the prior corresponding period.

Management commentary

McPherson’s Managing Director, Grant Peck, commented: “McPherson’s 6% revenue growth in the Australian market over the six months to 31 December 2020 illustrates the strength of our brand portfolio and our ability to deliver new product innovations to market. McPherson’s is the second largest Australian supplier of beauty products to the Australian Pharmacy channel.”

“Our existing brand portfolio, with its predominance in the beauty category, is now complemented by the recent acquisition of the Fusion Health and Oriental Botanicals brands and the establishment of McPherson’s Health category. This acquisition, effective 1 December 2020, provides the Group with strong go to market capabilities and product innovation credentials in the Natural Health & Vitamins and Dietary Supplements category, which in Australia is part of the $5.63 billion Health & Wellness retail sales market.”


Management warned that there remains an elevated level of uncertainty due to the difficulty of forecasting demand in China.

Furthermore, it notes that consumer behaviour will be difficult to gauge in the short term following an unexpected slowdown in the market in the last quarter of last year.

As a result, it is unable to provide guidance at this stage. However, it suspects that its underlying profits will be materially below what it achieved in FY 2020.

Where to invest $1,000 right now

When investing expert Scott Phillips has a stock tip, it can pay to listen. After all, the flagship Motley Fool Share Advisor newsletter he has run for more than eight years has provided thousands of paying members with stock picks that have doubled, tripled or even more.*

Scott just revealed what he believes are the five best ASX stocks for investors to buy right now. These stocks are trading at dirt-cheap prices and Scott thinks they are great buys right now.

See The 5 Stocks

*Returns as of February 15th 2021

More reading

Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of and has recommended A2 Milk and Blackmores Limited. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

The post Why the McPherson’s (ASX:MCP) share price was crushed today appeared first on The Motley Fool Australia.

Trade The World Anywhere & Anytime!

Mobile app platform with over 50,000 global listed securities across 12 markets (over 70% global market capitalisation), right from your Android or iOS device.

Integrated with exclusive trading idea and investment analysis tools to help you find actionable insight on virtually every financial instrument across our 12 global markets, to help you optimise your trading strategies.

Refer Your Friends

Tell your friends about Monex and gift them FREE access to our trading tools.

We respect your privacy and will only send this one email notification to your friends. 

Share With Your Friends

Share on facebook
Share on twitter
Share on linkedin

Monex Trading Tools Access and Usage Terms

The Monex Trading Tools (referred to as ‘tools’ hereafter) are available to you inside your client portal;

To activate access to the tools, you must have a verified and approved trading account and have made a deposit of at least AUD $1000.

An active and funded account with a positive trading balance is required to continue to have access to the tools;

Although the tools are available to you indefinitely, Monex Securities may at it’s discretion disable access to the tools in the future;

Monex securities reserves the right to change these terms and conditions from time to time, as it sees fit, without notice.

Important Notice
iOS & Android App - 12 International Markets & Over 70% Global Market Cap. $0 Brokerage On US Trades. Click Here!