Ansell impresses investors despite difficult trading environment

After a disappointing first half the company announced a full-year cash profit of US$139 million, sending the shares up over 5% in early trade today.

Tom Richardson

Tom is a holder of the CFA Society of the UK administered Investment Management Certificate (IMC) and has more than a decade's professional experience in the investment management industry in Australia and the UK. Tom now works as a writer and editor for TMF Australia and has two easy to remember rules of investing he likes to follow. Avoid overpaying for growth stocks and avoid paying at all for stocks that are cheap for a reason. Tom prefers growth investing over value investing and says it's not rocket science, just avoid overpaying for the best returns.

Published August 20, 2013 2:20 pm AEST

Ansell (ASX: ANN) reported total sales of $US 1.37 billion, up 9% on the prior year with earnings before income tax (EBIT) up 11%. The company said it expects EBIT growth in the high single digits to low teens for FY 2014.

The health device manufacturer and condom maker identified several external environment headwinds on its full-year results. Manufacturing costs, foreign exchange impacts, competitive pressures and lower government healthcare spends are creating tough operating conditions.

Ansell is a truly global business with less than 6% of sales coming from Australia and fast growing emerging markets now representing 27% of sales. More than 60% of institutional ownership is held outside Australia and the company will report and operate in US dollars from the current financial year onwards.

The business launched 48 new products in the year at a rate nearly seven times higher than 2010. It also completed four new acquisitions, including the largest deal since 1995. Leveraged to the global macro environment a return to growth in Europe would benefit it.

A final dividend of 22 cents was announced, taking the full year payout to 38 cents, up 7% on the prior year. Earnings per share and cash profit were both up 5% for the year.

Foolish takeaway

The group's balance sheet remains strong and given the necessity of its products and growth profile fundamentals the company's continued success comes as no surprise. The stock is heading towards all-time highs but this should not put off investors in for the long-term.

Interested in our #1 dividend-paying stock? Discover The Motley Fool's favourite income idea for 2013-2014 in our brand-new, FREE research report, including a full investment analysis! Simply click here for your FREE copy of "The Motley Fool's Top Dividend Stock for 2013-2014."

More reading

Motley Fool contributor Tom Richardson does not own shares in any of the companies mentioned in this article.

Automatic Renewal

By taking up this offer, you will also be enrolled in our auto-renewal program, which is our way of making your ongoing subscription easier by ensuring uninterrupted service. Don't worry, though – you're not locked in, and can cancel your auto-renewal at any time before each 'anniversary' date without question or penalty.