The share price of healthcare giant Ansell Limited (ASX: ANN) finished 1.49% lower today after the group revealed a flat result for the six-month period ending December 31 2016. Below is a summary of the result.
- Reported sales of US$775.8m, down 1.1% following divestment of Onguard business
- Constant currency sales growth of 1.4%
- EBIT up 5.3% to US$104.6m, or up 6.3% on a constant currency basis
- Earnings per share of US47.4 cents, up 4.4% on a constant currency basis
- Operating cash flow of US$43.6 million
- Interim dividend lifted to US20.25 cents, up 1.25%
Ansell has posted another solid result of growth and is a business that offers Australian investors global exposure and some defensive earnings streams.
The company also offers some good leverage to the world's emerging markets where consumers have increasing spending power and it reported 9.8% organic sales growth across its emerging markets division to mean these fast-growing regions now represents 26% of total sales.
Ansell's condom and protective clothing businesses also generate high levels of repeat sales and its global scale and brand power give it certain competitive advantages over rivals looking to steal market share.
Assuming it's well managed than it's an almost unique investment opportunity on the ASX as the kind of classic fast-moving consumer goods business with scale advantages that should offer investors dependable long-term total returns. Others around the world like Unilever, GlaxoSmithKline and Procter & Gamble are famous for delivering investors consistent returns with growth potential thanks to their footprints in emerging markets.
Foolish takeway
If you annualise FX-adjusted earnings per share you can estimate that Ansell might earn in the region of A$1.22 over the full year, which means it trades on around 18x an estimate of forward earnings at today's share price. It should also offer an FX-adjusted yield in the region of 2.5% at current share prices.
In my opinion the shares look fully valued for now, although this remains one of the better investment options for defensive investors on the ASX who would do well to keep it on their watch list.
