Why the McPherson's (ASX:MCP) share price could charge higher on Tuesday

The McPherson's Ltd (ASX:MCP) share price will be one to watch on Tuesday following an after market update today…

| More on:

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

The McPherson's Ltd (ASX: MCP) share price will be on watch on Tuesday following the release of a trading update after the market close.

What did McPherson's announce?

This afternoon McPherson's confirmed that sales from its core brands in the Australian market continue to exceed last year's figures.

According to the release, year to date, the company's owned brands, excluding the Dr. LeWinn's brand, have recorded sales growth of 7%.

This has been driven by double digit sales growth from the Manicare, Lady Jayne, and A'kin brands. Furthermore, market share growth has been recorded from 4 out of 6 of its owned brands.

The Dr. LeWinn's brand continues to weigh on the company's performance, though. Like A2 Milk Company Ltd (ASX: A2M), this has been caused by weakness in the daigou channel.

However, unlike a2 Milk, the sales of these products inside China haven't been strong, with Chinese Singles' Day sales falling well short of expectations.

Global Therapeutics acquisition.

In addition to this, the company revealed that the Global Therapeutics acquisition from Blackmores Limited (ASX: BKL) completed successfully on 30 November and its integration is progressing smoothly.

Management believes that this reflects the professional, collaborative approach of Global Therapeutics, McPherson's, and Blackmores.

McPherson's new Chief Executive Officer and Managing Director, Grant Peck, commented: "McPherson's year to date domestic sales growth reflects the consumer appeal of our market leading brands and our focus on new product innovation. All of the early signs are positive as we integrate Global Therapeutics into McPherson's and realise the complementary capabilities of the combined teams. Domestically, we continue to drive cashflow to support our mature dividend profile and modest debt levels."

Mr Peck, who was appointed CEO earlier this month after the sudden departure of Laurie McAllister following a series of terrible updates, also provided the market with guidance for the first half of FY 2021.

He revealed that McPherson's is on track to achieve its previous first half underlying profit before tax guidance in the range of $6.5 million to $7.5 million. This represents an 11.8% to 23.5% decline on the prior corresponding period's profit before tax of $8.5 million.

In addition to this, the new chief executive revealed that shareholders should expect a dividend March. He advised that the company's dividend policy is to pay a minimum dividend of 60% of underlying profit after tax, subject to cash requirements.

In line with this policy and based on its forecast first half underlying earnings, an interim fully franked dividend of at least 3 cents per share is expected to be paid to shareholders in March.

Annualised, this represents a fully franked 4.5% dividend yield. This may be far better than many had expected after its recent updates and guidance withdrawal.

Should you invest $1,000 in Mcpherson's Limited right now?

Before you buy Mcpherson's Limited shares, consider this:

Motley Fool investing expert Scott Phillips just revealed what he believes are the 5 best stocks for investors to buy right now... and Mcpherson's Limited wasn't one of them.

The online investing service he’s run for over a decade, Motley Fool Share Advisor, has provided thousands of paying members with stock picks that have doubled, tripled or even more.*

And right now, Scott thinks there are 5 stocks that may be better buys...

See The 5 Stocks *Returns as of 30 April 2025

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.

More on Share Market News

Man holding a tray of burritos, symbolising the Guzman share price.
Share Market News

Wingstop mania hits Sydney — is Guzman y Gomez next in line to soar?

Can Guzman y Gomez be Australia’s next fast food success story on the ASX?

Read more »

A person sitting at a desk smiling and looking at a computer.
Share Market News

2 ASX small caps with serious market-beating potential

Here's two compelling ideas to add to your watchlist.

Read more »

A man holds his head in his hands, despairing at the bad result he's reading on his computer.
Share Market News

These are the 10 most shorted ASX shares

Let's see which shares short sellers are targeting this week.

Read more »

A young woman wearing a red and white striped t-shirt puts her hand to her chin and looks sideways as she wonders whether to buy NAB shares
Opinions

The pros and cons of buying Wesfarmers shares in May

Is this retail giant an appealing opportunity?

Read more »

A man looking at his laptop and thinking.
Share Market News

5 things to watch on the ASX 200 on Monday

Here's what to expect on the local market today.

Read more »

Five retirees do a conga line dance on the beach celebrating the special dividend announced by Grange Resources today
Broker Notes

Why Macquarie thinks the NZ retirement village sector could be an emerging opportunity for ASX investors

Oceania Healthcare and Summerset could quietly emerge as high-upside plays for patient ASX investors.

Read more »

Excited couple celebrating success while looking at smartphone.
Broker Notes

5 high-conviction ASX 200 shares to buy

Brokers are tipping these shares as buys. Here’s what they rate highly.

Read more »

A woman in a business suit sits at her desk with gold bars in each hand while she kisses one bar with her eyes closed. Her desk has another three gold bars stacked in front of her. symbolising the rising Northern Star share price
Gold

How this ASX All Ords gold stock turned $10,000 into $78,740 in just one year

The ASX All Ords gold miner has raced higher over the year. Let’s find out how.

Read more »