Shares in Ansell have fallen to a six-month low after the gloves and protective clothing maker’s annual financial results missed market expectations
Ansell’s net profit for the year to June 30 fell 7.2 per cent to $US147.7 million ($A186.8 million), with the prior year’s result partly boosted by a gain on the company’s sale of its Onguard footwear-protection business.
Excluding the impact of acquisitions, divestments and exits, sales grew by 3.6 per cent in constant currency terms.
Citi Global Markets said Ansell missed analysts’ consensus estimates on sales, earnings, net profit, total annual dividend, and guidance on earnings per share.
While Ansell’s sales were okay, Citi said costs were up and the is likely to incur higher costs during a transformation program to improve its manufacturing capabilities and supply chain, invest in more acquisitions, and simplify its organisational structure.
Ansell said it was considering options on how to redeploy sales proceeds from the $US600 million divestment of its condoms business to a Chinese consortium, which was announced in May.
It anticipates the sale, which is expected to generate a gain of $US365 million, will be completed by the end of September.
“Acquisition opportunities remain a focus for enhanced growth if they can meet our demanding strategic and financial criteria,” Ansell said in a statement on Monday.
“We also see the opportunity to increase investment in our existing business as outlined in the transformation program.”
Ansell also expects to redeploy some of the sale proceeds to its current $US265 million share buyback.
The company expects basic earnings per share from its continuing businesses of 91 US cents to $US1.01 in 2017/18.
The guidance excludes an expected one-to-two US cents contribution from the condoms business; the benefits from the share buyback; the gain on the sale of the condoms business; and $30 million in transformation costs.
Shares in Ansell were 67 cents, or 3.1 per cent, lower at $20.75 at 1200 AEST.
ANSELL RESULTS MISS EXPECTATIONS
* Annual profit down 7.2pct to $US147.7m
* Revenue up 1.7 per cent higher at $US1.6b
* Final dividend up 0.25 US cents to 23.75 US cents, unfranked