The earliest products binge-bought and hoarded by nervy consumers earlier this year as the first wave of coronavirus infections and lockdowns swept the country were sanitisers, personal hygiene products, tissues, toilet rolls, and the like.
Such was the pace of panic buying that supermarkets and other outlets ran short and were forced to ration purchases.
There were uncomfortable stories and pictures of people fighting in the isles of supermarkets for packs of tissues or toilet rolls – some of these brawls ended up in charges and court.
As the first wave eased, production caught up, so when the Victorian lockdowns emerged in late July and August and COVID19 cases rose in NSW, wary retailers were not caught napping, imposing limits straight away.
But unlike February and March, stocks this time have been plentiful.
And as we saw yesterday Coles, the country’s second-biggest retailer was a big beneficiary of this.
Another to benefit was Asaleo Care’ which said profit more than doubled in the six months to June.
The company on Tuesday said net profit for the half was $18.8 million, more than double the $7.8 million for the first half of 2019, thanks to solid revenue growth triggered by the consumer stampede.
The maker of Libra, Sorbent, Handee, and Purex products said on Tuesday lockdown measures have since hurt sales into hospitality, office cleaning and education sectors – though have been partly offset by strong performance in healthcare and food-processing sectors due to increased hygiene requirements.
“(The initial surge was from) customers ensuring they had adequate stock levels of critical products including soaps, sanitisers, towel and wiping and cleaning products, as well as incontinence products into the aged care sector,” Asaleo said in a release to the ASX on Tuesday.
CEO Sid Takla said in Tuesday’s ASX release: “the Company’s strong brands, diverse business model and our local manufacturing footprint combined to deliver strong revenue and earnings growth during this challenging period. Solid cash generation during the period also enabled further strengthening of the balance sheet through net debt reduction.”
“Our priority has been to ensure all our staff remain safe and healthy during the COVID-19 pandemic. Strict measures have been put in place to ensure all manufacturing sites and distribution centres remain in operation.
“No closures or downtime have been experienced. We remain vigilant to ensure we can continue to supply our essential goods and have contingency plans in place to deal with issues if they were to arise.
“Our office-based staff have and continue to, successfully work remotely.”
“Pleasingly, our strategy to drive growth with investment in our brands and putting the needs of our customers and consumers first is gaining traction. We have delivered market share growth in all our key categories, he said in the release.”
But there’s a downside (as there always is in a short term boom). Asaleo expects demand tos low over the second six months of the year, but still thinks underlying earnings for the year should be at the upper end of its previously stated $84 million to $87 million range.
No reward for shareholders though as the company withheld an interim dividend, citing conservative cash management and “these uncertain times”.
Shares in the company rose 7% to $1.03 on Tuesday.
