Condom and rubber glove maker Ansell Limited (ASX: ANN) this morning posted an underlying net profit of US$157 million on US$1.59 billion of revenues for financial year 2014.
However, the underlying profit result excludes the impact of a US$115 million writedown related to the restructuring of Ansell's global business units. The writedowns saw statutory profit come in at US$42 million, down 70% on the prior year, although total sales were up a promising 16%.
Ansell's main business is in the sale of multi-use hand, body and foot protection products to company workers involved in the general manufacturing, oil, gas, chemical and construction industries worldwide. This division contributes almost half of total revenues and saw sales grow 10.2% on the prior year.
The sexual wellness division which contributes around 15% of sales saw a revenue slide with the company blaming adverse foreign currency headwinds, increased competition and a revision in global distribution agreements. The other global business units of Medical and Single Use products both saw strong sales and profit growth.
The company has christened FY 2014 as a transformative (rather than write-down soaked) year with the platform laid for a strong FY 2015. Ansell stated that it expects earnings per share to increase 7% – 15% on an underlying basis in FY 2015 with further acquisition synergy and restructuring benefits to kick in come FY 2016.
A final dividend of US22 cents per share was declared taking the full year total to US39 cents up 6% on the prior year. Ansell reports earnings in U.S. dollars so is sensitive to the varied strength of the greenback. Australian investors' dividend payments are also FX-adjusted and would rise if the Aussie dollar weakens further against its U.S. counterpart.
Ansell shares were up 4.32% to $19.81 on today's news as investors reacted to the company's prediction of underlying earnings growth in the "mid-to-high 20s(%)" in the coming financial year.
