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Ansell Ltd. (ANN) warned it faces a fall in earnings in the coming year thanks largely to currency movements and an expected tax increase in Australia. That comes after a surge in net profit for the recently ended financial year, and despite a forecast of healthy demand in key markets.

 

Net profit jumped to US$187.5 million, or US$1.225 a share in the year through June, from US$41.8 million, or 29.3 cents, the year before, the Melbourne-based company said Monday. Year-ago earnings were held back by US$115 million in one-off restructuring charges.

 

Revenue for the recent year was 3.5% higher at US$1.65 billion, from US$1.59 billion the year before. For the coming year, the company said it expected earnings of between US$1.05 and US$1.20 a share.

 

Ansell, which traces its roots to a bicycle-tire factory in Melbourne more than a century ago, last year launched a restructuring effort aimed at accelerating growth that included ditching older brands and about 100 products, and exiting from U.S. military-glove manufacturing. It stepped up cost-cutting efforts in late June with plans to close underused offices and warehouses, shifting staff to lower-cost locations at a one-time cost of almost US$13 million after tax--in a bid to lift earnings by US$15 million a year.

 

Chief Executive Magnus Nicolin, who since January has been based at the company's office in Brussels rather than the New Jersey location, said the company continued to generate strong profit and cash flow despite an unexpectedly strong headwind from currency swings against the U.S. dollar and weak economic performance in many key developed and emerging markets.

 

The benefits of a currency-hedging program that largely sheltered the company in the last financial year will diminish in the year ahead, despite an expected overall improvement in demand in most major markets, he said.

 

During the recent financial year, Ansell said it had been hit by a weaker euro as well as declines against the dollar in the Australian and Canadian currencies. Currency rates are expected to result in a US$55 million hit to revenue in the current year, while an increase in the effective tax rate in Australia is expected to result in a charge against profit in the second half of financial 2016, it said.

 

Ansell, which produces a range of safety gear from surgical gloves to protective suits worn in commercial diving, said it would pay a final dividend of 23 cents a share for a full-year payout of 43 cents, a 10% increase on last year.

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a year later

Ansell Ltd. (ANN) has launched a review of its condoms producing division as it cautioned earnings in the year ahead will be moderated by a higher tax rate in Australia and the recent sale of a U.S. safety boots business.

 

The company has hired Goldman Sachs to help review options for its Sexual Wellness business, the Melbourne-based company said Monday. Ansell also was considering opportunities to boost its industrial and medical divisions with acquisitions, it said. The acquisitive company, which grew out of a bicycle-tire plant established in Australia in the late 19th century, reported a 15% drop in net profit to US$159.1 million, or US$1.051 a share, in the year through June from US$189.1 million, or US$1.225, the year before. The result was in line with revised guidance from the company released in February for earnings of up to US$1.10 a share.

 

It was challenged by a weak global economy and currency fluctuations over the year. Sales for the year were down 4.4% to US$1.57 billion from US$1.65 billion.

 

Chief Executive Magnus Nicolin said that although the overall result for the financial year was at the low end of the company's original guidance, progress was still made in the second half and growth brands in its industrial and Sexual Wellness operations continued to outperform the market. It sold its Onguard boots business in May as part of a move to focus resources on its recently acquired Microguard clothing businesses, which the company said has significant potential to expand globally and in markets where Ansell hasn't historically had a major presence.

 

The company forecast earnings of between US$0.98 and US$1.12 a share for the 2017 financial year.

 

Ansell, which produces a range of safety gear from surgical gloves to protective suits worn in commercial diving, said it would pay a final dividend of US$0.235 a share for a full-year payout of US$0.435 against the US$0.43 paid last year.

 

Ansell's Sexual Wellness manufactures and markets 18 brands of condoms and related products, including "Skyn," "Blowtex," and "Jissbon" and together accounts for about 14% of overall revenue. Sales in constant currency terms were up 8.2% for the last year and earnings before interest and tax were 41% higher, the company said.

 

The industrial division saw a 3.3% increase in revenue and 10% rise in ebit, the medical division's revenue fell 8.3% and ebit was 18% lower, and the Single Use division recorded 15% ebit growth on a 1.1% dip in sales due to price reductions as lower raw-material prices were passed on to consumers, Ansell said.

up more than 15% after being oversold; a high of $30+ in April 2015, then sliding to sub $20, now $22.60
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Ansell Chief executive Magnus Nicolin said the company was ''experiencing very strong demand'' for its AlphaTec hand and body protection products, which provide protection against infective agents.

 

The group's single-use examination gloves sold under the Microflex and TouchNTuff brands, used by medical professionals, have also had ''very high demand.

 

- & maintained guidance

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  • 10 months later...

Ansell shares jumped to the highest since November 2020 after half-year profit surged thanks to demand for personal protective equipment (PPE), such as rubber gloves, because of the coronavirus pandemic.

 

The company said sales for the last half of 2020 surged by nearly a quarter helped by the increased demand.

 

After tax profit for the half rose by almost two-thirds to $106.5 million.

 

Ansell expects strong demand for PPE to continue for the next year and it also sees elevated demand for many other products as well.

 

 

 

 

Got above $40 during the day.

 

 

 

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Ansell has declared a record final dividend after a strong increase in profit, earnings and sales on the back of demand for its products as part of the response to COVID19.

 

Company sales rose 25.6 per cent to $US2.02 billion while EBIT climbed 56 per cent to $US338 million and profit firmed 57.5 per cent to $US246.7 million.

 

Ansell said its strong earnings were driven by higher production volumes, pricing/mix benefit and SG&A operating leverage. This was partly offset by elevated labour and freight costs combined with an increase in inventory provisions.

 

The COVID19 pandemic has continued to be the dominant influence on the global economy this year as countries recover or succumb to new waves. As a result, the Ansell mission to provide innovative safety solutions in a responsible and reliable manner has never been clearer, said Ansell chairman John Bevan.

 

This partly contributed to the company upgrading EPS guidance three times throughout 2021 financial year and achieving EPS of US192.2¢. To meet higher demand for some of our products, we increased our capital expenditure to $US82.7 million, a 36.5 per cent increase on the prior year. We plan on maintaining the spend at elevated levels for financial year 2022 and are confident that we can deliver the desired returns from these investments.

 

The company declared a final dividend of US43.6¢, its highest dividend payment on record.

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yep.... and then it all came unstuck.. Was $44 in July and now around $31. Steady selling. Which implies institutions getting out.

Ally Selby: Hello, and welcome to Livewire Markets and Buy Hold Sell. I am Ally Selby, and today we will be filtering the ASX for the top paid CEOs in the country [CSL, MQG, WOW and ANN]. As you would probably expect, these CEOs were handsomely rewarded in FY20, but were their shareholders too?

Well, to find out and to get the future prospects of these companies, we are joined by Rhett Kessler from Pengana and Stuart Welch from Alphinity.

Ally Selby: And last but not least, we have Ansell. Its former CEO, Magnus Nicolin took home $7.47 million in FY20. The company also has a new CEO, Neil Salmon, which is also a great name. Stuart, staying with you. Is it a buy, hold or sell?

Stuart Welch: Ansell is doing a lot of things well, but I would say it is a sell, unfortunately. It has been one of those key COVID beneficiaries that had a huge run up in profits over the last 12, 18 months, as they sell protective clothing, gloves for both industrial and medical uses. And there was a mad scramble for their product.

But that demand profile is now normalising, and probably a bit quicker than people expected. So, we are seeing volumes come out of that single use exam glove space, as prices are coming back rapidly, too. For that reason, we are starting to see earnings expectations filtered down. And I think that is probably going to make it a challenging environment for Ansell over the not too distant future.

Ally Selby: As Stuart said there, it has not had the best 12 months. Its share price has fallen around 25 per cent, probably because it was a COVID winner. Could its future turn around? Is it a buy, hold or sell?

Rhett Kessler: No, that is interesting. The spikes due to COVID have certainly outlined which companies have massive operating leverage on the way up and down. And the reason it fell 25 per cent is that it went up so much. I certainly think that people were factoring in way too high through the cycle earnings, and I think it has got more downside. It has got the double whammy of falling revenues, high operational leverage, and then very high input costs. And you have got to be quite brave to be there. So sell, sorry.

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